Out of many memorable quotes from my Knight Ridder days, one keeps bouncing back to me. It came of the company's mess in Detroit. Knight Ridder had long run the Detroit Free Press, one of the country's liveliest, most readable papers. But it fell afoul of Detroit's tough economy, and Knight Ridder ended up falling into a minority position, joining in a JOA (don't joint operating agreements seem like relics from another age today?) with Gannett, owner of the rival Detroit News.
Jerry Tilis, a longtime KR ad exec, had been part of those negotiations, the reckoning of the paper and its future. For KR, that reckoning was hard to stomach. I recall Jerry talking frankly about what happened in Detroit. What happened, really, those of us in other Knight Ridder cities asked?
"We believed our own b.s.," he told us. Many more words followed, but those stuck. Knight Ridder people had told the public story of how things would get better, how they'd weather the storm, etc., while they knew the problems were deep and seemingly intractable. Jerry's point: Know the difference between what you had to say for public consumption and the truth.
Today, it is worth looking back on what newspaper people have told the world about their own fortunes. I think of it in three phases:
- Phase I, maybe 1995-2004: “The Internet Won’t Hurt Our Business, and We’re Making Prudent Investments in the Internet.”
- Phase 2, about 2005-mid-2007: “The Internet is Changing Our Business, but We Believe our New Internet Revenues Will Make Up for Print Losses.”
- Phase 3, mid-2007 on: “We Can’t See the Future”.
Each public phase lagged internal reality.
Here's how it played out.
Inside the newspaper company, you look at the mounting set of bad numbers. You hope that what may be a structural change in the market -- craigslist taking classified listings, for instance -- will be cyclical. Experience tells you otherwise. You modulate your tone, parse your words. You have charts drawn up that focus on that amazing up arrow of digital revenue (though on a relatively tiny base) and downplay the down arrow as temporary. You don't offer the public the private arithmetic you know that those two lines together will never -- in the foreseeable future -- equal what overall revenues totaled in the good, old days.
Instead of acting on that truth, and making major moves to restructure the business while you've still got a reasonable cash flow and more ability to get from here to there, you believe too much of your own, uh, wished reality and wait too long. When the bottom drops out, you follow the trend of the industry and frightsize.