PJNet

“We are about to become a laboratory for newspaper local ownership.”

–Joe Natoli, publisher of the Philadelphia Inquirer and Daily News a few months ago when announcing the purchase of the papers by private local owners.

“Sad to say, but I’ve just written my most pessimistic blog post ever. After all this, I’m beginning to doubt that newspapers are the way to ’save American journalism,’ and we need a Plan B. I don’t know what Plan B is.”

–Will Bunch, Daily News columnist, yesterday, October 20, 2006

In preparation for an eventual blog post here at PJNet I was reading the recently released On Behalf of Journalism: A Manifesto for Change

by Geneva

Overholser. Fittingly I was reading and pedaling away on a stationary bike, when I came across the above quote by Natoli. It was spotlighted in a section about how local ownership might save quality journalism. It also said:

Financial analysts marveled at the gutsiness of the purchase. Journalists voiced concerns about editorial independence. (Most of the investors have long-standing business or political ties to the

Philadelphia

region. None has ever owned a newspaper.) Some observers saw the acquisition as a new trend that may prove to be the last best hope for traditional media, with the outcome by no means guaranteed.

Alas only hours before getting on the biking treadmill I was directed from Romenesko to this Friday story:

Some layoffs are “unavoidable” at Philadelphia Newspapers LLC, which owns The Inquirer, Philadelphia Daily News and Philly.com, publisher Brian P. Tierney told employees in a memo today.

Tierney blamed a “permanent” decline in national newspaper advertising that has forced cutbacks at other newspapers and media companies. The size of the layoffs will depend on the outcome of union contract negotiations, Tierney wrote. Contracts covering 2,000 workers expire Oct. 31.

He said the revenue decline was worse than projected when he led a group of local investors who bought the company last summer.

Cash flow has dropped from $100 million in 2004, to $76 million last year, to less than $50 million estimated for 2006, according to Tierney. After interest payments, that leaves less than $10 million “to invest in the business,” he said. Without “immediate and dramatic changes”, the company won’t be able to meet interest payments next year, he added.

Any layoffs would follow a 16 percent reduction in newsroom staffing at the two newspapers in November 2005.

A group of Philadelphia journalists and concerned citizens set up a Yahoo discussion group called Norgs, standing for “news organization – a ‘norg’ – that isn’t defined by the paper.” I wanted to get their take on the latest depressing news.

Will Bunch, Daily News columnist, would write in the discussion group:

Sad to say, but I’ve just written my most pessimistic blog post ever. After all this, I’m beginning to doubt that newspapers are the way to “save American journalism,” and we need a Plan B. I don’t know what Plan B is.

He would write in a separate column:

Actually carrying out the wonderful ideas we’ve been talking about — the changes we discussed at our “norgs” conference at the Annenberg School last winter, for example — is a lot more difficult than I imagined, for two reasons. One is that it’s much harder to execute them in these large, creaky and (to repeat the word from above) rigid vessels (dinosaurs?) that are the American newspaper of 2006. The other is that the declining ad/revenue/circulation picture for newspapers seems to be deteriorating so rapidly that serious reform in this environment is like trying to catch a falling knife.

Then he looks at the newsroom toll:

And yet while I think the ideas are important, and that some ideas are worth fighting to death for, I also think there’s one thing that’s much, more important than ideas, and that’s people. It would be relatively easy, with a deep-pocketed investor or two, to start a news organization of the 21st Century from scratch, without the Rube Goldberg distribution system of a newspaper. But what about the people, people who’ve given their lives to these two newspapers, and who support a family by doing a task that, in few cases, probably isn’t a good fit with the Internet era? They are my friends and co-workers, and your neighbors — we can’t just throw them under a delivery truck, whether or not it still makes sense to even have a delivery truck.

Tierney’s full letter to his staff can be found at Romenesko. Some of this might a ploy before union contract negotiations. It says in part:

If we are going to survive and grow, we need to significantly restructure our labor contracts and our workforce. We have been working with our labor unions to reach a deal by October 31. We have reached agreements and made significant headway with some unions, but are very far apart with some others. We need to reach agreements that allow us to achieve the savings to meet our loan obligations, and to reinvest in and to grow our business. However, even with those savings, some layoffs are unavoidable. We must reduce our workforce so that it is in line with our reduced revenue. To the extent we don’t get the savings, those layoffs will be larger.

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