Tag Archives: Daily News of Newburyport

BBJ scores big on two local media stories

The Boston Business Journal has come up aces during the past week with two meaty stories on local media news.

• A shaky future at the Globe. The first, published last Friday, found that confidential financial documents put together by the New York Times Co. suggest The Boston Globe was in slightly worse shape than outside observers might have imagined when the paper and several affiliated properties were sold to Red Sox principal owner John Henry for $70 million in early August. The BBJ’s Craig Douglas writes (sub. req.):

In essence, Henry is buying into a borderline breakeven enterprise already teed up for $35 million in cost cuts over a two-year period before he even walks through the door.

How bad is it? According to the documents cited by Douglas, advertising revenue at the New England Media Group (NEMG) — mainly the Globe, the Telegram & Gazette of Worcester and Boston.com — is expected to be 31 percent below the 2009 level next year. And paid print circulation revenue continues to slip despite price increases at the Globe and the T&G.

You may have heard people say at the time of the sale that Boston.com was worth more than the Globe itself. Well, I don’t think you’ve heard me say it. Print advertising remains far more valuable than online, and that holds true at NEMG as well. Douglas writes:

The Globe is by far the biggest revenue generator of the group, accounting for 69 percent, or about $255 million, of its forecasted revenue this year. The Telegram & Gazette in Worcester is next in line at $42.5 million in forecasted revenue this year, while Boston.com is on track to book about $40 million.

Print products account for about 88 percent of NEMG’s total annual revenue. That heavy reliance on print-related advertising and circulation revenue has proven particularly problematic of late, as both categories have lost ground since 2009 and are forecasted to see continued deterioration for the foreseeable future.

Douglas’ story is protected behind a paywall, but if you can find a print edition, you should. Suffice it to say that John Henry has his work cut out for him. The picture Douglas paints is not catastrophic. But it does show that the Globe is not quite as far along the road toward figuring out the digital future as some of us might have hoped.

• Tough times ahead for local papers. The other big media splash, which I linked to last night, is Jon Chesto’s analysis of the sale of Rupert Murdoch’s Dow Jones Local Newspaper Group (formerly Ottaway Newspapers) to an investment firm affiliated with GateHouse Media. The papers sold include three prominent Greater Boston dailies: The Standard-Times of New Bedford, the Cape Cod Times and the Portsmouth Herald, on the New Hampshire seacoast.

Chesto’s article is part of the BBJ’s free offerings, so by all means read the whole thing. It’s a real eye-opener, as he explains as best anyone can at this early stage what the sale and simultaneous bankruptcy of GateHouse will mean for local papers and the communities they serve. Unfortunately, indications are the news will be very bad indeed.

Fairport, N.Y.-based GateHouse, which publishes about 100 local papers in Eastern Massachusetts (including The Patriot Ledger of Quincy, The Enterprise of Brockton and The MetroWest Daily News of Framingham), will somehow be combined with the entity that holds the former Ottaway papers into a new company with the uninspired name of New Media (that may change). (Update: Chesto is a former business editor of The Patriot Ledger, which no doubt helped him write his piece with a real air of authority. And thanks to Roy Harris for reminding me of that.)

The deal with Murdoch — at $82 million, quite a bit more than I had anticipated — was done through Newcastle Investment Corp., a real estate investment trust that is part of Fortress Investment Group, which in turn is GateHouse’s principal backer.

The powers-that-be are already talking about slashing the Ottaway papers, which are among the best local dailies in the region. Chesto writes:

The papers are described as “under-managed by News Corp.” with “expense reductions of only 6% since 2010.” Translation: We can take more out of the expenses than News Corp. did. GateHouse has been an aggressive cost cutter in recent years, most notably with efforts to consolidate most of its page design and layout functions. That work was centralized in two locations, including an office in Framingham. But it will soon be downsized further, into one location in Austin, Texas.

Yes, Murdoch, the “genocidal tyrant,” is likely to prove a better steward of local journalism than the people he’s selling to.

Post-bankruptcy, with $1.2 billion in debt off their backs, the executives now running GateHouse are going to be empowered. According to a presentation put together for investors, Chesto writes, New Media may spend $1 billion to buy up local media companies over the next three years.

Chesto doesn’t say so, but if I were working for the Eagle-Tribune papers north of Boston (The Eagle-Tribune of North Andover, The Daily News of Newburyport, The Salem News and the Gloucester Daily Times), I’d be polishing that résumé right now. On the other hand, those papers have already been cut so much under the Alabama-based CNHI chain that it’s not like a new owner could do a whole lot worse.

At a time when there are reasons to be hopeful about the newspaper business thanks to the interest of people like John Henry, Jeff Bezos and Warren Buffett, the GateHouse deal shows that there are still plenty of reasons to be worried about the future.

Alabama pension fund whacks local papers (2013 edition)

The Alabama state employees’ pension fund is on the rampage once again.

The Eagle-Tribune newspapers north of Boston axed two of its local publishers on Wednesday, while a third was moved to the position of regional advertising director. The sole surviving publisher, Karen Andreas, will become regional publisher of the daily and weekly newspapers, magazines and websites. The dailies are the Eagle-Tribune of North Andover, the Daily News of Newburyport, the Salem News and the Gloucester Daily Times.

According to the paper’s Alabama-based owner, Community Newspaper Holdings Inc. (CNHI), “the reorganization is designed to refine the structure of its Massachusetts and New Hampshire properties to align them with the strategic print and digital objectives of the company in the North of Boston market.”

But CNHI, whose major investor is the Retirement Systems of Alabama, has been assiduously hacking away at its Massachusetts properties for years, laying off scores of employees and regularly subjecting those who’ve stayed to unpaid furloughs.

Here is the complete body count:

  • Al Getler, publisher of the Eagle-Tribune, and Sheila Smith, publisher of the Daily News, are out.
  • Mark Zappala, publisher of the Gloucester Daily Times, is the new regional ad director. Although it’s not mentioned in the official story, two sources tell me that Zappala will replace Tim Brady, who was also let go.
  • Andreas, publisher of the Salem News, moves up to regional publisher.

We are Salem News readers, and we are grateful that the paper has been able to keep together much of its skilled, experienced staff. At some point, though, this has to end. I would love to see CNHI try to find local investors to take the paper off its hands. Some days there are so few ads in the News that you wonder how they make payroll.* Is that just the way things are? Or could someone else do better?

*Update: Having heard from an insider, I should clarify. Pick up almost any daily paper, especially early in the week, and you’ll generally find that it’s remarkably thin compared to how many pages it would have comprised, say, 10 years ago. But I have no information on the CNHI papers’ profitability or lack thereof, and my off-the-cuff observation should be taken as no more than that. I also have no doubt the ad salespeople are working their butts off. It’s the out-of-state chain ownership that I question.

Photo (cc) by Joanna Poe and published under a Creative Commons license. Some rights reserved.

Bad news continues at New England newspapers

Bad news on two fronts today at New England newspapers owned by out-of-state chains.

First, the Providence Journal announced earlier today that it was eliminating 23 jobs. According to Jim Romenesko, the layoffs include photographers and the paper’s only librarian. Reporters and columnists were reportedly not part of the cut. The Journal is part of the Belo chain of Dallas.

Second, the Eagle-Tribune papers north of Boston have cut 21 positions at their four daily newspapers and several related publications, writes the Boston Globe’s Todd Wallack. The dailies are the Eagle-Tribune of North Andover, the Daily News of Newburyport, the Salem News and the Gloucester Daily Times. The company is owned by CNHI, based in Montgomery, Ala.

More: Wallack has more on the Eagle-Tribune layoffs.

Meanwhile, E-T reporter Mike McMahon, who covered Merrimack College hockey, writes about getting laid off.