Friday, January 30, 2009

The great depression

There's a bumper sticker on a copy editor's desk at work that states simply: Funeral.

Kind of describes the mood in the industry. Over in Dallas, publisher A.H. Belo, a former employer of mine, said today it would lay off 500 workers - about 14 percent of its work force - and take other cost-saving measures. "The decline in advertising revenues for the newspaper industry and all media persists," Chief Executive Robert Decherd said in a memo. "The key for all companies, and certainly for A.H. Belo, is to generate and preserve cash."

Good luck. In the third quarter of last year, the company reported a loss of $17.4 million. Shares in the company yesterday fell nearly 4 percent to close at $2. When I worked for the Belo-owned Press-Enterprise less than 10 years ago, shares were selling in excess of $30.

It was about as bad closer to home, where the Tribune Co.-owned Los Angeles Times said it would cut about 300 positions, including 70 - roughly 11 percent - in editorial. "The same challenges that face the companies we report about also are affecting us," Publisher Eddy Hartenstein said in his memo. Oh, by the way, the local section will be eliminated, merged into a reconfigured front section.

What about those companies the Times and other news organizations are writing about? Let's see. Nearly 200,000 jobs have been shed in January alone. Home Depot, Pfizer, Sprint and Caterpillar announced earlier this week that they were laying off 60,000 workers. Yesterday, the government reported the gross domestic product saw its greatest decline in 26 years during the fourth quarter of 2008. Eastman Kodak said it was cutting up to 4,500 jobs - up to 18 percent of its work force. Ford reported today it lost $14.6 billion last year. And Sears Holdings Co. laid off 300 corporate employees.

It's bad, and it's getting worse. I'm not optimistic about this economy, and I'm hardly alone. Meanwhile, folks at The San Diego Union-Tribune came to work today fully expecting to lose their jobs, but the layoffs we've been told are so imminent have yet to materialize.

There's always Monday.

Wednesday, January 28, 2009

Are we stupid or what?

Imagine John Steinbeck spending years researching and writing an American classic. When he completes his tome, the book is offered not for sale, but for free. On the Internet. Steinbeck gets nothing for his work.

Imagine the Ford motor company spending countless years and millions of dollars developing a prototype automobile of the future. When it completes its work, the company offers the car not for sale, but for free, on AutoTrader.com.

Imagine Eli Lilly & Co. employing the world's most renown scientists developing a cancer-fighting drug. When it comes time to put the product on the market, Lilly switches gears and offers the elixir for free. No charge. To anyone who wants it.

Pretty damn crazy, huh?

Maybe not so much. Because everyday, newspapers employ thousands of well-paid, and not-so-well-paid reporters, researchers, editors photographers and layout artists to document what has been called the rough draft of history. And what happens to the fruits of this investment? It is offered free, on the Internet.

Are we stupid or what?

No wonder journalism is a dying breed. We're idiots. Would a plumber come to your house on Chistmas morning, unclog your kitchen sink, then walk away without demanding to be compensated? Then what in heaven's sake are we doing offering, for free, everything we've worked so hard to create?

Why not charge for online content, especially content that is proprietary? Why not offer free access to our Web sites, and perhaps the first few graphs of a wire story, but charge a monthly access fee to anyone who wants to read a story researched, developed and produced by a newspaper staff? Why not charge an access fee to the many yahoos who feel like they need to comment on every story they read online?

If 100,000 people regularly access a newspaper Web site daily, and that newspaper were to charge $5 per month for full access of that site, you're talking about an additional $6 million annually in revenue. That would help make up for a few lost Robinson-May ads.

Sound simplistic? Perhaps. But that's how we need to start thinking. Because the system we have now isn't working. And we're digging our own grave.

Tuesday, January 27, 2009

Not the water cooler!!!

My oldest son, much to my horror, has shown a strong attraction to journalism and a possible career in the newspaper industry. And why not? He's a gifted writer, way more intelligent than I and has become quite the leader in his 19-plus years. These days, he's studying political science and economics at UC Davis, where he also serves on the staff of the California Aggie as city editor.

Today, it was announced that the school newspaper would make the type of mid-year budget cuts common throughout the industry. Here's what Richard Proctor, editor in chief, had to say to his readers:

Dear Aggie Readers,

Due to mounting budget losses, The California Aggie has found it necessary to make several mid-year cuts. The most visible of these is our decision to cease having a print edition of the newspaper on Fridays. Articles that would have run in the Friday issue of the newspaper will be posted online at theaggie.org.


But wait. There's more.....

Other less visible cuts that we've had to make include closing the front office on Fridays, removing stipends for staff writers and staff photographers, cutting manager pay and slightly reducing the circulation of the Monday, Tuesday and Wednesday issues. We have also made an effort to remove anything not absolutely necessary from The Aggie's budget, including money for staff retreats, special training, certain office supplies and the water cooler.

Historically, The Aggie's expenses have been fairly even with advertising revenue. For the past several years, however, ad sales, The Aggie's only source of revenue, have been in sharp decline. This year marks a new low. The primary reasons behind this are two-fold.

First, for approximately the past five years, newspapers everywhere have been finding it increasingly hard to make ends meet due to the increasing popularity of online publishing. Readers can get the same news for free whenever they want, usually at a faster pace. By-the-second updates have made print media less than optimal as a primary news source. By and large, even the best newspapers have struggled to adapt to this new environment. The New York Times, for example, recently started to run front-page advertisements and is facing $1.1 billion in debt. The recent $250 million investment by Mexico based telecommunications mogul Carlos Slim has put off the worst of their troubles for the time being, but their problems are still indicative of the industry as a whole.

The Aggie, along with other college newspapers, has a largely captive audience. As a result, industry ills are often delayed in affecting this newspaper. Those problems, however, have finally come to the fore and are the reason for our increased work on our website as well as our budget cuts.

Second, the abysmal state of the national economy has made advertisers wary of purchasing any ad space, let alone space in a college newspaper. Until the economy improves, it is unlikely that advertising for The Aggie will see any significant increase from what it is right now. Because The Aggie's budget needs to be based on solid data and expectations instead of hopeful forecasts, it was deemed necessary to make drastic cuts right now in order to address the deficit The Aggie will face at the end of the year.

These cuts, while unfortunate, are not without precedent. The Daily Californian, for example, no longer produces a Wednesday print edition.

These are likely the extent of the publicly visible budget slashes, though The Aggie's management continues to meet with both the Campus Media Board and a special subcommittee of the media board devoted to the discussion of Aggie finances. The ultimate goal is to keep The Aggie printing for as many days a week as possible for as long as possible. We take our duty to provide the UC Davis campus and surrounding community with news and information very seriously.

We strongly encourage you to continue reading The Aggie's Friday articles online at our website (theaggie.org); our reporters and editors are still working their very hardest to bring you up to date information about the community you live in.

We thank you for your continued readership and support.

Sincerely,

Richard Procter
Editor in Chief


My son's pay was cut 10 percent - a tad more than my pay was cut last week. Alas, he's facing another 10 percent cut in pay soon.


...Meanwhile, I'm doing what I can to save our circulation, one reader at a time.

While checking my voicemail Monday, I came across a well-reasoned critique of the paper by a longtime reader who was wondering why he should pay for the product any longer. This gentleman, who has been a customer of The San Diego Union-Tribune (more precisely, The San Diego Union, and then The San Diego Union-Tribune) since he was a kid more than 40 years ago, said the paper had become so thin, it was no longer worth it. He counted only a few A-section stories worth reading. The local section was even more lacking. Why should he pay, he asked, when he could get what we were offering for free?

He left his number, so I called him back, fully expecting to get an earful. Instead, we had a cordial conversation in which I detailed the challenges we were facing and argued, as I have in previous postings here, that online journalism should not replace the printed version of the news, but complement it. As he articulated his concerns, it became clear to me that he was speaking not only as a reader, but as a citizen of San Diego who is vested in the paper. He wanted the paper to thrive. He wanted it to be better.

It was a great talk, and I was glad I returned the call. And it concluded with one final pitch. Please, please, please, don't cancel the subscription. If he did, I pointed out in jest, we would have only 37 readers left, and two of those are in my house.

He kept my number. I hope he calls back.


...One last note
Folks who insist on speculating about how many people will get laid off and when the ax will fall should find another hobby. No one except a small circle of executives who earn a much higher salary than I knows what might be going on. And they aren't talking.

Wednesday, January 21, 2009

The growing legion

The anxiety that comes with knowing that layoffs are coming, and that layoffs are coming soon, but you don't know if you'll be one of those who will be laid off, is hard to describe. `Unsettling' doesn't quite encompass the breadth of emotions. `Concerned' isn't quite descriptive enough. `Uneasy' moves closer to a more accurate portrayal, but even that isn't quite there.

You get the picture. It's messed up. It's been almost a week since I was told that layoffs are coming and that layoffs are coming sooner, rather than later. How many? I wasn't told that. When? I wasn't told that, either. The factors that go into who will go and who will stay? Nope.

The result are myriad unanswered questions. Do you spend a few hundred bucks replacing a dingy old couch that could put a healthy man in traction, or do you sock it away for next month's mortgage? Do you resolve never to go out to dinner again until the future is clearer, or do you splurge in an effort at releasing some tension? Do you take that planned vacation, or do you keep it in the bank, knowing that the paid time off will come in handy when the steady paychecks stop.

It is an usettled, disconcerting, uneasy time not only where I work, but at workplaces across the country. Layoffs are on everyone's mind. It has become so paramount, I sometimes forget the pay reductions and increased health insurance premiums.

The people I know have trooped on marvelously. Today's paper detailing the historic inauguration of a black man inheriting a White House built by slaves was a masterpiece. Beat reporters are commited as ever. Every day, jewels are published by people living under such stress that recent editions now, more than ever, embody the meaning of the so-called `daily miracle.' People who don't know if their careers will suddenly end tomorrow are busting their ass, refusing to go quietly into that dying of the light.

Meanwhile, the speculation continues. Reporters at other publications are wondering how bad the bloodletting will be, trying to confirm rumors that WARN letters - required in California when more a good chunk of a company's workforce will be axed - are being prepared.

Who knows? But it's a bit disquieting knowing that my next blog entry could be written by the newest member of the country's growing legion of the unemployed.

Monday, January 19, 2009

Smell the glove

One of the more fascinating stories in the 24-hour news cycle today had nothing to do with the plummeting stock market, the NFC and AFC championship games or the cessation of hostilities in the Middle East. Nope. It was an Associated Press story on the cover of the Union-Tribune's business section: a 22-incher discussing how newspapers are planning to sell millions of additional copies detailing Barack Obama's historic inauguration.

I thought newspapers were dead.

Then why is the Washington Post planning an "extra" afternoon print edition while boosting single-copy prices from 75 cents to $2 a pop? Why is the San Diego Union-Tribune planning to print an additional 80,000 copies of Wednesday's paper? Why did customers of The New York Times line up to buy editions of that paper outside its headquarters the day after Obama trounced John McCain in November?

According to the AP, sales of the Nov. 5 edition and related merchandise, including a framed front page of The Times that sold for $299, has brought that company a cool $2.3 million.

I wonder if any Web sites are cashing in like that?

Dying industry my ass.

Friday, January 16, 2009

Glug, glug, glug

"...Glug, glug, glug," said the last man standing on the deck of the Titanic as the once-proud ship listed more quickly than ever into the icy waters of the North Atlantic.

Or at least that's what it felt like after the latest bombshell at The San Diego Union-Tribune today: a suspension of the company's matching 401(k) contributions; a mandatory unpaid furlough program for non-salaried employees; a freeze on merit pay; a near doubling in the employee share of health-care premiums; and a big hefty pay cut - 9.25 percent - for me.

But the worst is yet to come: more layoffs that I'm guessing will come next week.

It could be worse. Gannett Co. told its employees today that the Tucson Citizen will cease publication on March 21 if a buyer can't be found. The Minneapolis Star-Tribune filed for Chapter 11 bankruptcy. And the Detroit papers are pushing ahead with plans to cease publication of a real paper most of the week.

Meanwhile, the calvary is nowhere to be found. Circuit City announced today it's liquidating its U.S. stores, and Macy's is cutting back sharply on its newspaper advertising.

The reaction has been one of stunned silence. I saw many tears shed today, though you never know if that had something to do with an uncermonious end to a relationship. I, and everyone I know, is keeping busy, doing more with less, refusing to succumb to the temptation of just giving up and walking out the door.

One thing is for certain. It's going to get worse. Blogs are reporting the Union-Tribune has lost more than 40 percent of our advertising revenue since 2006, and the recession has yet to hit its stride. In fact, I'm beginning to wonder if we're halfway to a depression. (Think of it: If you use the same government criteria we were using back in 1931, unemployment is soaring past 14 percent).

Still, I have no regrets. My only other dream was to play centerfield for the Los Angeles Dodgers, a dream I easily could have reached had it not been for my lack of youth and talent. So this is what I do. This is who I am. This is what I believe in. And this industry will thrive once this economy rights itself.

Of course, I may be dead by then.

Wednesday, January 14, 2009

keep hangin' on

No announcements have been made, but several folks I know outside the business have been worried about me nonetheless, wondering if I've been laid off. Nope. But in the latest cutbacks, 20 people (or 23, depending on who you listen to) have been axed from the pressroom.

Monday, January 12, 2009

When you gotta go...

When I woke up after a fitful sleep in the middle of the night not long ago, I did what I always do when I have too much on my mind for an uninterrupted slumber. I headed to the kitchen and gobbled up some Cheerios.

And read the paper.

And why not? I didn't have time to read the whole thing the morning prior, so I found myself catching up on the stories I had missed. Sure, the news was "old," but I wasn't looking for the box scores from the Lakers game that ended just a few hours earlier. I was perusing through the so-called think pieces. I read a couple movie reviews. But most important, the paper was convenient. It was right there. I didn't have to turn on a computer. I didn't have to wait for it to boot up. I didn't have to log in. And I didn't have to deal with any popup ads.

Why do I bring this up? Because everywhere I go, everything I read, the message is the same: Newspapers are a dying breed. the Internet is infinitely more convenient. Only dinasaurs read print. The brain surgeons who run the industry seem intent on running from what people want and destroying the quality of print in a stampede to reign supreme over an online medium that can't even pay for itself.

It's madness.

Yes, there is an audience online. And if you want to succeed in the 21st century newsgathering business, you'd better excel in that medium. But online isn't the cure-all. Everytime someone in my family goes to the crapper, they take a paper, not a computer. Everytime I see someone catching up on the news while riding a bus or trolley, they're reading a paper, not a computer. Everytime I sit in a doctor's office waiting for my appointment, folks are reading the paper, not a computer.

Fact is, we have hundreds of thousands of newspaper readers in every large city, yet you could hardly tell by the strategy some in the industry are following.

Look. I use the computer as much as anyone to communicate, as evidenced by this blog. And when I want to see who won the latest basketball or baseball game, I eschew the sports ticker on ESPN and log on to a computer instead. By the time the paper comes out in the morning, I know everything I need to know about what's written about the Dodgers or Lakers in the LA Time sports page. I've even read the latest New York Times headlines on my cell phone while riding the train home from work.

But I'm also a newspaper reader. As are well more than a million other people in San Diego County. And there are stories in the paper that I would rather read in the paper. There are conveniences with print that you cannot get online.

So why are we losing so many newspaper readers? I suppose more than a handful are dying. And even more are cutting back because of the economic collapse. But our refusal to even acknowledge that newspapers are the medium of choice for tens of millions of Americans, and our failure to strategically market what has long been a cash cow is shortsighted. And pretty damn stupid.

As for me, I'm logging off for now. There's a story or two I didn't get to read about the Chargers this morning, and I have to go to the bathroom.

Monday, January 5, 2009

Shining star

Several years ago I interviewed a young, talented, energetic reporter from New Mexico who was applying for a job at The San Diego Union-Tribune. It didn't take long to hire him. He started his tenure here working in a bureau covering cops. It didn't take long for him to complete an investigation detailing how El Cajon police were getting into more collisions than a drunk at a demolition derby.

Ultimately, he moved over to the government team, where it didn't take long for him to latch onto an investigation detailing how administrators had no records for almost $1 million in grants given to community groups from special funds set up for each of the five county supervisors.

He was good. He loved his job. He loved the profession. But he wanted to move closer to his family, so - despite my urgings not to - he took a post with the Rocky Mountain News. His track record in Denver was similar to that in San Diego. Relentless, determined, passionate and talented, he went after the same sort of wrongdoing in the Rocky Mountains that he found in San Diego County.

He sent me an email today asking for a reference. The Rocky Mountain News is on the market. If it doesn't sell, it will probably shut down. My friend will be out of a job. And our profession might lose yet another rising star.