Fighting "...irrational negativity"

This has been an interesting week.

The Denver Post’s parent company has filed for Chapter 11 bankruptcy. The New York Times is positioned to start charging for its on-line content. And the Rapid City Journal’s owner – Lee Enterprises – reports revenues for 2009 dropped by 18.2 percent.

In fact, Lee indicated that its yearend report was actually encouraging news. Fourth Quarter revenues were down by 14%. Lee owns the Rapid City Journal, the Bismarck (ND) Tribune, the Casper Star-Tribune, and several Montana papers among its stable of some 53 dailies. They also operate more than 300 “specialty” publications in 23 states.

Lee CEO Mary Junck, in a letter to stockholders, ticked off a wide range of Lee accomplishments, including the refinancing of $1.3 billion of debt and streamlined operations.

“Through intense collaboration, our editors redesigned our pages to a reduced width of 11 inches, gaining approval from readers and advertisers,” Junck wrote. That move helped Lee shave newsprint usage by 31 percent.

Interestingly, Lee has launched a public relations campaign to combat what Junck called the continuing, “irrational negativity” about the future of newspapers. One of the PR steps was producing the "business card" similar to the one shown here for the Rapid City Journal, touting the audience and performance of Lee. Click on the card to see how the Journal and other Lee papers are attacking that negativity. Similar cards were done for all of Lee’s 53 daily newspapers.

Meanwhile, over in Colorado, Denver Post CEO Dean Singleton is promising no layoffs as a result of imminent Chapter 11 bankruptcy for MediaNews Group, a Denver-based organization that owns the Post, Boulder Camera, and 52 other daily newspapers. The Wall Street Journal reported this week that MediaNews has been “teetering for months.” The bankruptcy will reportedly reduce MediaNews debt from $930 million to $165 million, and Singleton suggested employees play up the positive aspects of the Chapter 11 filing.

Perhaps Singleton and Junck – and many newspaper executives have been talking with one another about how to paint a rosier picture.

To be sure, we’re hopeful that newspapers can re-invent themselves into a sustainable product that endures for years to come. Perhaps I’m old fashioned (perhaps??!!) but thumbing through and reading the morning paper is a joy I don’t want to give up.

On-line news just isn’t quite as cathartic. Especially if you have to pay for it, after having enjoyed free access to the New York Times for such a long time. One of the last holdouts offering free access to its on-line version, the Times will likely announce within the next few weeks exactly how it expects to monetize its on-line services.

We support charging for these services. But exactly how such fees are assessed and at what level will be a challenge. We like the “tease” approach being used by the Black Hills Pioneer (a Seaton publication), whereby you can read a paragraph or two – and possibly enjoy a photo – before being prompted to click a link to “…read more.” That’s when readers can subscribe to the full-meal deal and read the entire paper on-line.

On-line journalism is likely to continue to grow. We trust it will also get significantly better. If newspapers can survive and then thrive in a modified form, that would be a good thing, giving us some choices.

For now, we’re entrenched with one foot in the print world and one in the on-line world. We can live with that.

More bad news for Lee

This has not been a good year for Lee Enterprises. That’s the company that owns the Rapid City Journal, Chadron (NE) Record, and the Hot Springs (SD) Star, among many others. Their most visible property is the St. Louis Post-Dispatch.

Lee this week (7/30/09) reported a loss of $24.5 million during the last fiscal quarter. Its advertising is off more than 24% from last year, and circulation is down by more than six percent.

The company is based in Davenport, Iowa.

In earlier postings about Lee, we noted that they were going through many of the same kinds of problems being encountered by virtually all of the newspaper industry. There were layoffs at many of their properties in Wyoming, South Dakota and Montana.

We paid $2.00 for a Wall Street Journal yesterday and observed that USA Today, the Gannett property started by South Dakotan Al Neuharth, now goes for $1.00 a copy. These hefty newsstand prices do little to offset the record losses being endured by papers across the country.

Leveraging new acquisitions on the backs of papers that are doing well has been a common woe among several big newspaper chains – including Lee Enterprises. It’s something of a “local” chain, and we’re sorry they’ve fallen victim to this trend.

We love newspapers and hope Lee is able to fend off its own demise. But the prognosis is not good.

Lee stock in the tank

Tough times continue for Lee Enterprises, the media company that owns the Rapid City Journal, which includes a number of associated weeklies like the Lawrence County Star, the Hot Springs Journal, the Belle Fourche Post & Bee, and the Chadron (Nebr) Record.

One year ago, the Davenport, Iowa, publisher saw its stock trading at $14.91 per share. Just before the 2008 holidays, a Lee share went for just 30 cents per share, and it’s been over a month since its stock has seen anything above one dollar.

Lee owns 49 daily newspapers, and its poor financial showing means that it has fallen below standards necessary to be listed on the New York Stock Exchange. Business Week reports that Lee plans to announce a strategy within the next 10 days that would allow them to keep their NYSE listing. Being forced to trade over-the-counter would be a severe black-eye for the firm, which continues to struggle with lower advertising revenues and declining circulation numbers.

Nonetheless, Lee officials say their circulation numbers are not as bad as the rest of the industry, which has seen a decline of some 20% over the past year.

Despite my arm-chair criticism of some practices at the Rapid City Journal – and the fact that I’ve become a habitual user of internet services – I’m hoping that Lee Enterprises and the Rapid City Journal will get through these difficult times.

Call me old fashioned, but I believe there’ll always be a place for print journalism products. While it’s hard for me to imagine a world without my morning newspaper, it’s clear that the industry will have to become more creative in finding ways to retain its relevancy in this glitzo-techno era.

Put on a happy face

In their September 24th edition, the Lawrence County News announced that it’s going to “provide a stronger local newspaper and web site for its valued readers.”

Under a headline stating “Weeklies change course,” the paper said it would cut its Saturday editions beginning October 25. While the story talked about “consolidating its resources in an effort to reduce expenses,” they didn’t mention layoffs.

The move should certainly save expenses, but I’m not certain how it’ll provide a “stronger local newspaper.” And they weren’t particularly forthcoming about what other kinds of “consolidations” will take place. They did concede that the Belle Fourche Post & Bee will soon be renamed the Butte County Post, but I’m not certain of its implications on service.

That these are difficult times in the newspaper business, there is no doubt. A week or two before the Lawrence County Journal fessed up to its plans, Lee Enterprises – which owns the Journal and several other weeklies, as well as the daily Rapid City Journal – said they were laying off people at three of their papers in Montana, including the Billings Gazette.

In August, news giant Gannett Company announced that they’re cutting 1,000 jobs nationwide, despite cost-cutting measures they’ve instituted over the past year or so. The decline in ad revenue has apparently been just too much for them.

I suspect we’ve not heard the end of the local newspaper woes.

Emerging figure in U.S. media

In a sharp contrast to media mogul Rupert Murdoch, a little-know but wealthy Mexican billionaire named Carlos Slim has become a significant stakeholder in the New York Times Company. Unlike Murdoch, who likes a “hands on” approach to his media holdings (New York Post, Dow Jones Company, Wall Street Journal, etc.), Slim indicates that he has no plans to become involved in day-to-day dealings at the struggling newspaper.

The 68-year-old Slim made his fortune by buying inexpensive properties and then turning them into valuable investments. He’s best-known as owner of TelMex, the largest phone company in Mexico. He has begun turning over operation of TelMex to his sons, apparently in a move to begin easing out of decision-making roles. This is consistent with his approach to his 6.4 percent stake in the Times. He has reportedly become quite a philanthropist, too. With holdings near $60 billion, that's not surprising -- but good to hear.

Interestingly, Slim lists Warren Buffett, “the sage of Omaha,” as someone he admires. With New York Times ad revenue down by 14 percent during the first half of this year, perhaps Slim -- like Murdoch at the Wall Street Journal -- will be tempted to offer advice, although it would have to resonate strongly in the ears of the Ochs-Sulzberger families, which apparently still control 70% of the Times.

Newspapers across the country continue their struggles to survive. Gannett Company said last month that they’re cutting some 1,000 newspaper jobs, and closer to home, Lee Enterprises is paring jobs in Montana, Wyoming and South Dakota.