Wednesday, July 20, 2011

A media deal from hell - and then some

THE PEOPLE WHO BRING us the news are now making much of the news.

There is, of course, Rupert Murdock's News Corp. hacking scandal that has spread from London to New York as investigators continue to turn over rocks that were disguised by moss over the past decade. The last issue of The Economist magazine, taking stock of a badly wounded media industry, arrived at my mailbox with a 14-page special report on the"future of the news" in a cyberworld that has created a Disney World for newspapers as they engage in a roller coaster effort to survive. For American newspapers, the magazine observes, the U.S. is the "worst case" crises of the malady that is occurring in various degrees of helplessness on other continents.

Not that there is much new in such news. For years a rash of books and trade publications has been taking up the topic without any clear conclusions of where we go from here as advertising and readership continue to shrink. The decline has ripped at news room staffs, cutting tens of thousands on their rosters out of jobs. Meantime, the worriers in the front office have discovered - at least for public consumption - there is nothing to be gained by twisting their handkerchiefs in their hunt-and-peck guesswork about solutions to counter the Internet, particularly Google. Just as well perhaps. There are many instances where their solutions were worse than the problems. More about that later.

I have just read a compelling account of the troubled media world with two once-great newspapers as the victims. It is James O' Shea's book, "The Deal from Hell'', subtitled "How Moguls and Wall Street Plundered Great American Newspapers." It represents the back-room dealings of greedy wealthy investors who might have been conditioned by working in a sausage factory. O'Shea is an insider. He served as an editor at both media giants - the Tribune Company, publisher of the Chicago Tribune, and the Times Mirror Company, publisher of the Los Angeles Times. When the Chandler family, owners of the Los Angeles Times, clandestinely decided it was time to cash in on their estate in 2000, the Tribune Company bought it for $8.3 billion in a deal largely orchestrated by Wall Street bankers. The so-called merger was supposed to have guaranteed a healthy future for both papers (read: stockholders) while the new guys were counting their pocketed millions with little attention or concern about the quality of their product.

It didn't quite work out that way and by 2007 the papers were back on the market. More trouble. That opened the door to Sam Zell, a mega-rich real estate man who was described in a book review in Columbia Journalism Review as "arguably, America's most ill-suited media mogul." That was being kind.

The stories that have emerged from his ownership should be shielded from any young journalist with stars in his or her eyes. He and his front office operated as a goon squad with expatriates from radio - favored as folks who were so hip that their conversion of the Tribune evolved into a print version of the culture advanced by modern shock jocks. Into the hallowed halls of the Tribune's late owner, the storied Col. Robert Rutherford McCormick, came jukeboxes and pinball machines and other edgy cultural upgrades. There were soon staff complaints about crude jokes, "boorish" behavior and sexual harassment. Back in Los Angeles, frustration was expressed by a a three-story banner at the Times Building that asserted; ZELL's HELL.

All the while, thousands of jobs were being abolished at both papers (Where else do you cynically go these days to look for cost cutting?). The Tribune has been in bankruptcy for three years and Zell is said to have lost $316 million in the deal. So much for the well- nourished Wall Street experts.The arbitrary corporate grafting never charmed the staffs at either paper. It deteriorated into what A.J.Liebling once called the merger of the Columbus Dispatch and Columbus Citizen: Two hermit crabs living out of the same shell.

This is not a fanciful Hollywood tale of space aliens taking over the media.. Rather, it's about real people, sort of, that O'Shea sees as "monumental egos, fallible souls, larger than life characters and cultural clashes' in the collapse of newspapers.. Nor is he convinced that the decline was inevitable. Rather, he says the new owners were totally unprepared to deal in serious journalism - a word foreign to their interests - but chose to be servants of the Wall Streeters who advanced their own ways of gaining profits. As O'Shea writes:
"By joining the ranks of stockholder-owned companies [by going public] Tribune executives and newspaper owners across America fell under the thumb of Wall Street. In the process, they agreed to be measured by different yardsticks, not just journalism prizes and civic pride but also profit, efficiency, shareholder value, cash flow, and the price of a share of stock. From 1983 on [when the Tribune went public] the industry would answer not just to readers but also to shareholders with their eyes fixed on the bottom line and Wall Street analysts....The quality of newspapers degraded and part of that is due to going public."

As one who lived through some of the same conditions at the Akron Beacon Journal before leaving in 1991, there is little for me to dispute in O'Shea's brutal look at the industry. The great house that John S. Knight built began to crumble in the custody of the board in Miami as he grew older and less in command of the newer generation in control. Knight Newspapers was essentially in the hands of Ridder ( the latter group of much less distinction but with essential control over the entire hyphenated operation.) Knight was not pleased with the new landlords and once told me that he considered the merger the worst thing that could have happened to his papers.

In the new regime, editors arrived in Akron from far-flung towns and cities with little or no understanding of the area's unique culture. And none of them seemed to have any intention of hanging around that long, even though such ambitions were occasionally thwarted by the big brother in Florida (and later San Jose). Unfortunately, each brought his own idiosyncratic style of management to the paper's mission of improving its profit margin. Some of those fixes amounted to little more than tweaking.

One executive editor who arrived from Philadelphia imediately banned italicized headlines in the paper (too hard to read!) as well as eliminating occasional artist sketches to dress up a light-hearted story. Focus groups were in; columns by beat reporters were out. Favorites were chosen; many others were left out of the loop. Most of the preferred treatment went to the new arrivals from the corporate computers, while those who had been around before the hurricane struck were left to fend by their own survival instincts. The size of color photos grew while text dwindled at the same pace. The daily paper was supposed to be pretty, if not read. (Department editors debated the width of a thin black border that framed a photo. as if it really mattered to the reader.) Meetings overlapped. The blurry direction even drove out one intelligent department head, who said she simply didn't know what her boss wanted anymore. There was tension among the top editors and eye-rolling when the "old man" in the corner office, Jack Knight, was mentioned.

One example of how the ill-considered response to shrinking circulation occurred when the managers decided to open up a bureau in Canton to challenge the Canton Repository. It couldn't be successful because the BJ didn't offer two of a newspaper's precious assets to the Canton area readers - movie times and obituaries. The bureau was short-lived as a costly bad experiment. The Plain Dealer repeated an ill-considered expansion by opening, with much ballyhoo, a big bureau in Montrose (where I landed as a part-timer) to capture more Akron- area readers. The expensive commitment slowly eroded and the bureau staff was moved to Medina, and eventually closed altogether. A single reporter was assigned by the PD to cover Akron, an idea that had a short life span, too.

The man at the top of the heap as the Knight Ridder CEO was Tony Ridder, who had a hankering to spend as much time as possible with his advisors on Wall Street. And when the time came to unload (remember the Chandler family?) KNR was sold to the McClatchy Co. in 2006 for $4.5 billion, with the gentleman's agreement that McClatchy would sell off only a handful of the KNR 's 32 newspapers. What a ruse that turned out to be - but business is business. Within a month or so, McClatchy sold off at least a dozen of the papers , the Beacon Journal to the Black Press of British Columbia. Ridder said he was "disappointed" that it had come to that. Oh?

With new editors and new owners at the BJ in a relatively short time, it was not easy to remember names and owners and places. Still isn't.

With the BJ's staff now reduced to a skeleton of what it once was. it's safe to assume that the paper is still making a profit. There is no Columbus bureau or Washington bureau, and reporters are given assignments from a daily pool. A couple of floors in the proud BJ building are being rented out. It is what it is because that's how the owners want it to be. As for the readers and remaining cadre of older reporters, there is little for them to cheer about. It's gloomy, to be sure, and it will remain that way as the industry's dynamics are controlled by Wall Street. Or as O' Shea acidly writes:
"The lack of investment, the greed, incompetence, corruption, hypocrisy, and downright arrogance of people who put their interests ahead of the public's are responsible for the state of the newspaper industry today."


Anonymous said...

Had you spelled Murdoch correctly in the lead, I might have kept reading.

Grumpy Abe said...

Gee, don't I get any credit for all of the other words that were spelled correctly?

David Hess said...

A sad but discouragingly accurate post-mortem of the decline of American newspapers, the crumbling ramparts of an industry that was granted perhaps the most vital role in the founding and sustaining nourishment of our democratic republic. So vital, in fact, that the founders accorded it the honor of mention in the very first Amendment to the Constitution. "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press....." Once in the hands of the money-changers, the role of the press was transmogrified, turned into a hollowed-out hulk that now feeds on trivia and "entertainment" while shorting the expensive pursuit of ethics miscreants, fast-buck hucksters, environmental despoilers, inane demagogues and dollar-dealing lobbyists. Mr. Knight, as you noted, bemoaned the merger of Knight Newspapers with Ridder's publications. But, for all of his majesty as a highly ethical publisher, his biggest mistake was going public with his newspapers, and thus leaving them at the mercy of Wall Street and its drain-and-bleed-dry corps of money-grubbers.

Anonymous said...

Excellent post. As a former reporter at the BJ, I can say the last few years in the newsroom felt like trying to walk in a maze that was constantly being reconfigured.

Mencken said...

In July of 1980, the Columbus Dispatch was the first newspaper to offer online content to Compuserve's 3,600 subscribers. The 1980 date is not a typo.
This was the shot unheard around the world.

Newspapers traditionally reported and analyzed what happened in the past 24 hours. Nowhere in their culture would you find futurists, pondering the probable effects of news without the paper on their own institution.

By the time the newspaper business realized the significance of the internet, and its effect on advertising revenues, they were already strapped to the gurney. Not that there was too much they really could have done about it.

Remember record stores ? Travel agencies ? Book stores ? Stereo stores? Just a few of the casualties of the second major industrial revolution. And like all revolutions, there's corruption at the top and blood in the streets.