Upside-Down Priorities At the ProJo’s Parent
Friday, September 27, 2013
Thanks to Ted Nesi’s excellent coverage over at WPRI, we learn in reverse chronological order:
Now, stay with me for a second. During roughly the same period, we also learn:
“Projo company’s CEO will make $300,000 – after he retires,” June 19, 2013
“Projo parent AH Belo’s board awards big raises to top bosses,” March 2012
The math tells all
Now, again: Not a math major. But if you’re wondering, the answer is, in fact, yes, executive bonuses in just two of the years mentioned above amount to more than double the amount of concessions extracted from an already desiccated news and sales operation.
How can this be justified? I put that question to the company’s CFO, Alison K. Engel, listed as the company’s investor-relations contact, and will let you know if I hear back.
But, John Hill, president of the Providence Newspaper Guild, has an answer: It can’t! Says Hill on the phone the other day:
It is extremely disheartening to have sat across the table from them – multiple times -- to hear them say what dire condition the business is in, and that we have to make sacrifices, including to our membership, and then to see the top executives in Dallas literally three months later take as bonuses the money we gave them as savings. It makes it really hard to sell austerity.
Let’s just call that the understatement of the year.
Wrong and more wrong
In fact, though, bonuses in this environment are worse than inappropriate, irresponsible, and bad optics, although they are all three. They are a strategic mistake.
Editorial and advertising personnel who are members of the Guild, Hill says, have been reduced since 1980’s peaks by more than two thirds – from more than 500 to around 160 – before the newspaper crisis of the last decade or so really started to unravel industry finances. That number typically is made up 60 percent on the editorial side, so, rough body-count in the newsroom, runs well over 100 reporters and editors over the years.
The damage to the product is incalculable. The paper once had nine bureaus covering that tiny state: Woonsocket, Pawtucket, Attleboro (just over the border in Massachusetts), West Warwick, Warwick, East Bay, Newport, South County, and Westerly.
Think about that: a Warwick bureau, and a West Warwick bureau.
It is obviously not possible to do that now. That’s not the point. The point is: in this day of disaggregation in the media, when local newspapers don’t have a monopoly on local advertising, the newsroom is a newspaper’s primary asset.
It’s about the content. That’s all there is left. The news. Reporting. Writing. Photos. Graphics. The product.
What Belo gave away
Think about the intimacy created by having had those nine bureaus. I was there. It was pretty intimate. It didn’t mean everyone loved the Projo. It just meant they were connected to it, emotionally as well as intellectually. It was the hub of the community: it wasn’t interactive, like Facebook. True. But everybody knows today – even if we didn’t think about it then -- that kind of engagement creates value. You need boots on the ground to create it. But that engagement is what you are now selling.
Oh, and the number of Journal state bureaus today? Zero.
If Belo management has a strategy for rebuilding the newsroom – its main asset -- I would love to hear it, and if it worked, I would fly to Dallas to deliver poster-sized bonus checks myself, like they do when you win the lottery.
But whatever the strategy for the paper is, these have been the results during the period under discussion:
Daily circulation did this:
Revenues have done this:
Yes, the rest of the industry is in bad shape. But the fact is the Projo has actually lost subscribers at a faster pace than the rest of the industry. From 1999, newspapers’ heyday, to 2012, newspaper circulation nationally was off 20 percent. The ProJo’s meanwhile is off a stunning 45 percent, from about 165,000 to 89,000.
What does management say? In a recent conference call, CEO Robert Decherd placed the blame on Rhode Island state and local government, including how many cities and towns the state has. Seriously!
Well, as Jeff Bezos, a successful business executive, will tell you: “Complaining isn’t a strategy.”
And while Rhode Island’s economy is, indeed, in very tough shape, the economy of Worcester – all of 40 miles away -- isn’t that much better, and yet the Projo has lost circulation at a far faster rate than the Telegram & Gazette, which is off “only” 30 percent and is now not so much smaller than the once mighty Projo itself.
Yes, Belo manages two other newspapers, but nothing in their numbers comes close to justifying executive bonuses, which divert valuable resources from critical investments in the product, and the future. And that’s the real shame of it. Rhode Island is in the dumps now, but that won’t always be true. When the state does come back, Belo will have squandered its main asset and the loyalty – hard-won, over many years, believe me – of its customers.
This does not have to be. There are models being tried at other newspapers – ones roughly the size of the Projo – that have actually begun to inspire hope. The strategy involves – get this – involves reinvesting heavily in the newsroom, aka, “the product.” But you actually have to be committed to succeeding over the long term.
I’ll explore that in a future post.
Changing Newspaper Industry
In a column entitled, The smartest guys in media give up on print, Alan Mutter, the former editor of San Francisco Chronicle, writes "For all the corporate-speak accompanying the dramatic restructurings of Twenty-First Century Fox, Time Warner and Tribune Co., the simple reason these diversified media giants are jettisoning their publishing assets is that their leaders fear for the future of print."
Throughout New England and across the country there is a dramatic decline in the print newspaper business.
The New York Times Company sells the Boston Globe for just $70 million - a loss of more than of more than $1 billion dollars over 20 years.
The new ownership - John Henry - a majority owner in the Boston Red Sox may have purchased the Globe for the value of the real estate. Estimated to be $40 million to $50 million.
New Bedford's newspaper is now is flux as its parent group, which was own by Ruppert Murdock's Dow Jones Local Media Group (a subsidiary of News Corp) has been sold off and is being merged into the same company as Fall River's Herald News.
The newco will be merging both the spinoff Dow Jones Local Media and the bankrupt Gatehouse into one media company.
Circulation is now just above 20,000 during the week.
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