Tag Archives: Journal Register

A New Haven-centric view of Digital First’s latest woes

The Register in June 2013, shortly after a redesign.

The Register in June 2013, shortly after a redesign.

This article was published earlier at The Huffington Post.

The end may be near for one of the most widely watched experiments in local journalism.

Early today, Ken Doctor reported at the Nieman Journalism Lab that Digital First Media was pulling the plug on Project Thunderdome, an initiative to provide national and international content to the company’s 75 daily newspapers and other publications and websites. Soon, Doctor added, Digital First’s papers are likely to be sold.

Judging from the reaction on Twitter, the news came as a shock, with many offering their condolences and best wishes to the top-notch digital news innovators who are leaving — including Jim Brady, Robyn Tomlin and Steve Buttry. But for someone who has been watching the Digital First story play out in New Haven for the past five years, what happened today was more a disappointment than a surprise.

I first visited the New Haven Register, a regional daily, in 2009. I was interviewing people for what would become “The Wired City,” a book centered on the New Haven Independent, a nonprofit online-only news site that represents an alternative to the broken advertising-based model that has traditionally supported local journalism. The Register’s corporate chain owner, the Journal Register Co., was in bankruptcy. The paper itself seemed listless and without direction.

Two years later, everything had changed. Journal Register had emerged from bankruptcy and hired a colorful, hard-driving chief executive, John Paton, whose oft-stated philosophy for turning around the newspaper business — “digital first” — became the name of his blog and, eventually, of his expanded empire, formed by the union of Journal Register and MediaNews, the latter best known for its ownership of the Denver Post.

Just before Labor Day in 2011, Matt DeRienzo — then a 35-year-old rising star who had just been put in charge of all of Journal Register’s Connecticut publications, including the New Haven Register — sat down with me and outlined his plans. His predecessor had refused my requests for an interview; DeRienzo, by contrast, had tracked me down because he’d heard I was writing a book. It seemed that a new era of openness and progress had begun.

The openness was for real. The progress, though, proved elusive. For a while, John Paton was the most celebrated newspaper executive in the country, the subject of flattering profiles in the The New York Times, the Columbia Journalism Review and elsewhere. Media reporters were charmed by his blunt profanity, as when he described a presentation he gave to Journal Register managerial employees. “They were like, ‘Who’s the fat guy in the front telling us that we’re broken? Who the fuck is he?’” Paton told the CJR.

In 2012, though, Journal Register declared bankruptcy again — a necessary step, Paton said, as it was the only way he could get costs such as long-term building leases and pension obligations under control. After Journal Register emerged from bankruptcy in 2013, Paton’s moment in the national spotlight seemed to have passed, as media observers turned their attention to a new breed of media moguls like Amazon.com founder Jeff Bezos (who bought The Washington Post), Red Sox principal owner John Henry (who bought The Boston Globe), greeting-card executive Aaron Kushner (who acquired the Orange County Register) and eBay founder Pierre Omidyar (who launched a new venture called First Look Media).

Although Digital First’s deepening woes may have escaped national attention, there were signs in New Haven that not all was well. Some positive steps were taken. The print edition was redesigned. The Register website was the beneficiary of a chain-wide refurbishing. Nasty, racist online comments were brought under control, and the newsroom embraced social media. But larger improvements were harder to accomplish.

Among the goals Matt DeRienzo had talked about was moving the paper out of its headquarters, a hulking former shirt factory near Interstate 95, and opening a smaller office in the downtown. In 2012, the Register shut down its printing presses and outsourced the work to the Hartford Courant. The second part of that process never came, though. Just last week, the New Haven Independent reported that the Register had backed away from moving to a former downtown mall facing New Haven Green. Two months earlier, according to the Independent, the Register and Digital First’s other Connecticut publications laid off 10 people.

Neither development should be described as a death knell. The downtown move is reportedly still in the works. And the 10 layoffs were at least partly offset by the creation of six new digitally focused positions. But rather than boldly moving forward, the paper appears to be spinning its wheels. And now — or soon — it may be for sale.

One of the biggest problems Digital First faces is its corporate structure. Can for-profit local journalism truly be reinvented by a national chain whose majority owner — Alden Global Capital — is a hedge fund? People who invest in hedge funds are not generally known for their deep and abiding affection for the idea that quality journalism is essential to democratic self-goverance. Rather, they want their money back — and then some. Preferably as quickly as possible.

No matter how smart, hard-working and well-intentioned John Paton, Jim Brady, Matt DeRienzo et al. may be, the Digital First experiment was probably destined to end this way, as chain ownership generally does. I wish for a good outcome, especially in New Haven. Maybe some civic-minded business leaders will buy the paper and keep DeRienzo as editor. And maybe we’ll all come to understand that the best way to reinvent local journalism is at the local level, by people who are rooted in and care about their community.

What’s at stake in the latest Journal Register bankruptcy

Matt DeRienzo

This article also appears at the Nieman Journalism Lab.

In the spring of 2009, when I began researching what would become a book about online community journalism, I couldn’t have found a better foil than the New Haven Register.

Owned by the bankrupt Journal Register Co. (JRC), the daily was moribund and mediocre, its disconnect from the community symbolized by its location: a gigantic converted shirt factory, partly surrounded by barbed wire, on the outskirts of the city next to Interstate 95. The contrast with the New Haven Independent, a nonprofit, online-only startup that is the focus of my book, couldn’t have been more stark.

Three years later, when I turned in my manuscript, things had changed considerably. JRC was out of bankruptcy. Its chief executive, John Paton, was winning industry plaudits for his “Digital First” strategy of accelerating the transformation from print to online. The New Haven Register had a new, young, progressive editor, Matt DeRienzo. And JRC had outsourced printing to the Hartford Courant as DeRienzo had begun preparing to move his staff to a yet-to-be-determined location in the downtown. New Haven, a poor, largely minority city of about 130,000 people, was suddenly home to two of the country’s most closely watched experiments in reinventing local journalism. (My book on all of this, “The Wired City,” will be published by the University of Massachusetts in 2013.)

So I was shocked on Wednesday when Jim Romenesko reported that JRC was once again entering bankruptcy. As Paton explained it on his blog, the idea is to get the company out from under the legacy costs that it took on when the newspaper business was a lot larger and more profitable than it is today: debt; long-term leases on buildings it no longer needs; and pension obligations. The strategy is to take advantage of Chapter 11 in order to reduce JRC’s cost structure and re-emerge from bankruptcy in a matter of months.

The pension piece has been the subject of considerable consternation on Twitter and elsewhere, as it raised the specter of out-of-state investors (JRC is headquartered in suburban Philadelphia) taking away from loyal employees what is rightfully theirs. DeRienzo countered by pointing out that pensions are guaranteed by the federal government. “No one’s retirement is at risk,” he wrote.

There’s no question that guaranteed pensions are largely a thing of the past in the private sector, with defined benefits having given way some years ago to the era of the 401(k). And JRC is not the only newspaper company with pension problems. In 2009, the New York Times Co. nearly reached a deal to sell the Boston Globe that would reportedly have brought in less cash ($35 million) than the Globe’s future pension obligations ($59 million), which prospective buyers were asked to assume.

In other words, if you were going to start any private enterprise from scratch, you would almost certainly not include pensions as one of the benefits that you would offer your employees. And I have little trouble believing that JRC’s pension system is weighing the company down.

On the other hand, it seems to me that JRC may soon face a “Where’s the beef?” moment. Paton’s tireless advocacy of Digital First has gotten a lot of attention and praise — deservedly so. At some point, though, Paton has to deliver real improvements both to the journalism of JRC’s news organizations and to the bottom line.

I think Paton and DeRienzo have the right values and the right motives. I’m rooting for them. Fundamentally, though, we are talking about trying to effect change from the top down. Corporate chain ownership has been a disaster for community journalism. I’d rather my paper be owned by a good chain than a bad one. But neither is an adequate substitute for local ownership — and yes, I realize that’s no panacea, either.

As the Nieman Journalism Lab’s Joshua Benton points out, this may be Paton’s last, best chance to remake JRC exactly along the lines that he envisions — truly a new start without the dead weight of his predecessors’ poor decisions dragging him down. I’m eager to see what he’ll do with that opportunity.

Connecticut newspapers in Mark Twain’s court

Paige Compositor. For more photos (including Mark Twain in Legos!), click on image.

Last week I had a chance to attend the premiere of “On Deadline: Is Time Running Out for the Press?”, a documentary about the near-death and uncertain rescue of the Bristol Press and the New Britain Herald, both in Connecticut.

The papers were owned by the Journal Register Co., which, as it was entering bankruptcy in late 2008, threatened to shut them down if a buyer couldn’t be found. (The company, whose largest Connecticut paper is the New Haven Register, exited bankruptcy in August 2009.) The papers were saved by Michael Schroeder, a veteran newspaper executive who, among other things, was a top executive at BostonNOW, a free tabloid that until its demise competed with Metro Boston.

The future of the Press and the Herald is by no means certain; Schroeder made that clear in both the film and in a subsequent panel discussion. But at least the papers have a path forward. The film itself, by John and Rosemary Keogh O’Neill, was enjoyable and worth seeing if you ever get a chance, though I found the drama over the papers’ fate more compelling than the overly nostalgic views of the newspaper business that were expressed by the principals. (Here is the trailer.)

In a delicious irony, the film made its debut at the Mark Twain House, in Hartford, a shrine to a great writer who, among other things, nearly went bankrupt because of his own involvement with the newspaper business. In the 1880s Samuel Clemens sank a fortune into the Paige Compositor, which he believed would make him a very wealthy man, given that it was 60 percent faster than the Linotype machine. The Paige, though, was prone to breakdowns, and it never caught on.

Technology has always been an issue in the newspaper business. It was the rise of cheap, high-speed presses in the 1830s that created the daily newspaper business as we know it. And, of course, it’s technology that is now rapidly ushering us into the post-newspaper age.

Good jobs at good wages

Context is everything. Yesterday, I wrote about the compensation packages of GateHouse Media’s top two officials, chief executive Michael Reed and the just-promoted president and chief operating officer, Kirk Davis.

What I wrote was accurate, but I failed to consider what top executives might be making at other newspaper companies. As it turns out, there’s nothing special about Reed’s salary ($925,000 in 2007) or Davis’ (about $461,000). Reed’s 2006 compensation, $6.4 million, included a lot of stock, the value of which has presumably all but disappeared.

With 2007 revenues of $589 million, GateHouse is on the smaller end of the publicly traded newspaper companies I looked at this morning. But its challenges are as great or greater than those of much larger companies — it’s staggering under a debt load of $1.2 billion, and its stock price has fallen so much that it was delisted this fall by the New York Stock Exchange.

Anyway, here’s a quick cruise around a few other newspaper companies and what they paid their top managers in 2007, ranked by 2007 revenues.

Gannett Co. ($7.4 billion)

  • Craig Dubow, chairman, president and chief executive officer: salary, $1.2 million; total compensation, $7,546,710
  • Gracia Martore, chief financial officer, executive vice president: salary, $700,000; total compensation, $3,026,985
  • Susan Clark-Johnson, chairwoman of U.S. community publishing: salary, $735,000; total compensation, $3,145,339
  • Not-so-fun fact: Employees have been told to take a one-week unpaid furlough during the first quarter of 2009
  • Financials from WSJ.com

New York Times Co. ($3.2 billion)

  • Arthur Sulzberger Jr., chairman: salary, $1,087,000; total compensation, $3,439,280
  • Janet Robinson, chief executive officer: salary, $1 million; total compensation, $4,142,410
  • Michael Golden, vice chairman: salary, $1 million; total compensation, $1,706,579
  • James Follo, chief financial officer and senior vice president: salary, $480,000; total compensation, $859,273
  • Not-so-fun fact: A recent, widely disputed essay in the Atlantic speculates that the flagshap New York Times could cease publishing as early as this May
  • Financials from WSJ.com

McClatchy Co. ($2.3 billion)

  • Gary Pruitt, chairman and CEO: salary, $1.1 million; total compensation, $4,635,355
  • Patrick Talamantes, chief financial officer and vice president for finance: salary, $500,000; total compensation, $938,970
  • Three vice presidents of operations are paid salaries in the range of $500,000 to $600,000; total compensation is around $1.1 million apiece
  • Not-so-fun fact: The debt-burdened chain is trying to sell the Miami Herald, but can’t find any takers
  • Financials from WSJ.com

Journal Register Co. ($463 million)

  • James Hall, chairman and chief executive officer: salary, $394,750; total compensation, 411,233
  • Scott Wright, president and chief operating officer: salary, $201,923; total compensation, $231,040
  • Julie Beck, executive vice president and chief financial officer: salary, $337,500; total compensation, $431,510
  • Robert Jelenic, former chairman and chief executive officer: salary, $945,396; total compensation, $6,318,394 (Jelenic died last month)
  • Not-so-fun fact: The deeply troubled company is closing some of its papers and selling off others
  • Financials from the company’s 2008 proxy statement (PDF)

What’s the takeaway? Top executives at newspaper companies, like top executives everywhere, make a lot of money. We tend not to notice when times are good. But with the newspaper business under siege, such lavish compensation packages seem out of sync, both symbolically and substantively.

On the other hand, if any of these well-paid folks can find a way out of the current morass, they will be worth every cent.

Explaining the Journal Register’s fall

Media Nation reader MTS passes along this interesting Newsosaur analysis of what went wrong at the Journal Register Co., the bottom-feeding newspaper company now drowning in a sea of debt. (JRC’s best-known property at the moment is probably the New Haven Register.)

What’s fascinating about this is the gulf that separates Newsosaur’s Alan Mutter from his commenters. Mutter praises JRC’s 19.3 percent profit margin, and concludes that the company came to woe not because of the way it has run its newspapers but because of foolish investments.

Many of the commenters, though, say those profit margins were the result of such drastic cutbacks in newsroom budgets that the papers were decimated, leading to their “loosing circulation in heaps” (I hope that wasn’t written by a copy editor).

Of course, everyone is losing circulation in heaps these days. It would be telling to see how JRC’s numbers stack up with those of the industry as a whole.

Saturday morning roundup

If I were Ernie Roberts, the great Globe sports columnist, I’d tell you what I had for breakfast this Saturday morning. I’m not, so herewith a few observations about this and that.

Deval Patrick’s corporate benefactors. The drip-drip-drip over Gov. Patrick’s book proposal has been more a source of amusement than a cause for genuine concern. Today’s Globe story, in which we learn that he takes credit for the 10,000 people who turned out for a Barack Obama rally on the Common, is a hoot.

But yesterday’s Globe story properly noted a real problem — Patrick’s reliance on corporations, some of which will have business before the state, to buy books by the truckload in order to hand out to employees and clients. The impression you get is of a governor so convinced of his own rectitude that he believes he’s above the rules mere mortals have to follow.

Judge Murphy’s future on the bench. A Globe editorial today urges the state Supreme Judicial Court to suspend Judge Ernest Murphy, who was may be fined earlier this week for his bizarre and threatening letters to Herald publisher Pat Purcell after Murphy won a $2.1 million libel case against the Herald. [Correction: The Commission on Judicial Conduct has recommended that Murphy be censured, suspended for 30 days and fined $25,000.]

I assume the Globe means without pay. As a Herald editorial noted on Wednesday, Murphy has been out on paid leave since sometime last year, collecting his salary of nearly $130,000. It’s hard to think of a public official who has profited so handsomely from media criticism of his performance — which, no matter how imperfectly it may have been executed, is supposed to receive the highest possible protection from the First Amendment.

Helping the fans by gouging them. The Herald goes B-I-G today with the fact that the Red Sox are auctioning off Green Monster tickets to the highest bidder, with some seats going for more than $500.

The best quote is from Ron Bumgarner, the Sox’ vice president of ticketing: “We feel it’s our civic responsibility to keep tickets affordable for fans, and at the end of the day, this helps keep other ticket prices down.” You can’t make this stuff up.

Newspaper-killing chain faces death. The Journal Register Co., known within the business as the cheapest chain on earth, is sinking in a sea of debt and is in danger of being delisted by the New York Stock Exchange. The Journal Register’s best-known paper is the New Haven Register, but it also used to own the Taunton Gazette and the Fall River Herald News, now held by GateHouse Media. It also used to own the Woonsocket Call, where I was a co-op student in the mid-1970s.

Cape Cod Today publisher Walter Brooks sent out a blast e-mail with the news, which he titled “Every tear remained unjerked in its little ducts.” No kidding.