Month: May 2018

No, the Digital First approach to newspaper ownership is not defensible

Politico media columnist Jack Shafer has written, if you can believe it, a semi-defense of the hedge fund Alden Global Capital and its principal, Randall Smith, who are in the midst of running their newspapers into the ground. Alden owns the Digital First Media chain, whose Denver Post is the locus of an insurrection against hedge-fund ownership. The 100-paper chain also owns three Massachusetts properties: the Boston Herald, The Sun of Lowell and the Sentinel & Enterprise of Fitchburg.

Shafer’s argument is a simple one: the end is at hand for the newspaper business, no one has figured out how to reverse its shrinking fortunes, and so therefore Smith can’t be blamed for squeezing out the last few drops of profit before the industry collapses. “Smith may be a rapacious fellow,” Shafer writes, “but his primary crime is recognizing that print is approaching its expiration date and is acting on the fact that more value can be extracted by sucking the marrow than by investing deeper or selling.”

Now, it’s possible that Shafer is right. But I’m considerably more optimistic about the future of newspapers than he is. Let me offer a few countervailing examples.

1. I certainly don’t want to sound naive about GateHouse Media, a chain of several hundred papers controlled by yet another hedge fund, Fortress Investment Group. GateHouse, which dominates Eastern Massachusetts, runs its papers on the cheap, too, and I’ve got a lot of problems with its barebones coverage of the communities it serves.

But GateHouse, unlike Digital First, is committed to newspapers. That’s why both insiders and outsiders were hoping GateHouse would buy the Herald. I genuinely think the folks at GateHouse are trying to crack the code on how to do community journalism at a profit for some years to come — and yes, its journalists are underpaid, and yes, I don’t like the fact that some editing operations have been centralized in Austin, Texas. But it could be worse, as Digital First demonstrates. For some insight into the GateHouse strategy, see this NPR story.

2. Smaller independently owned daily papers without debt can do well. The Berkshire Eagle is in the midst of a revival following its sale by Digital First to local business interests several years ago. In Maine, a printer named Reade Brower has built an in-state chain centered around the Portland Press Herald that by all accounts is doing well.

3. Large regional papers like The Denver Post are the most endangered. Transforming The Washington Post into a profitable national news organization, as Jeff Bezos has done, was a piece of cake compared to saving metros. As I describe in “The Return of the Moguls,” billionaire owner John Henry of The Boston Globe is pursuing a strategy that could result in a return to profitability: charging as much as the market will bear for print delivery (now up to more than $1,000 a year) and digital subscriptions ($30 a month). Globe executives say the paper is on track to pass the 100,000 mark for digital subscriptions in the first half of this year, and that the business model will start to look sustainable if it can reach 200,000.

In other words, reinventing the newspaper business is not a hopeless task. Randall Smith and Alden Global Capital have taken the easy, cynical route — but not the only route. There are better ways.

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Could a newspaper rebellion against hedge-fund ownership spread to Massachusetts?

Previously published at WGBHNews.org.

It looked like a one-off last month when The Denver Post rebelled against its hedge-fund owner. In publishing an editorial and several commentaries denouncing Alden Global Capital as “vulture capitalists,” the Post’s journalists took what was seen by most observers as a courageous but futile stand.

But now the rebellion is starting to spread. And there is hope, however slight, that Digital First Media — the newspaper chain controlled by Alden — can somehow be pushed into doing the right thing. As CNN media reporter Brian Stelter writes, there were protests scheduled for today in Denver and New York City, the latter to take place outside Alden’s headquarters.

What’s happening matters nationally, and it matters locally. Digital First is one of our largest newspaper chains, controlling nearly 100 newspapers on both coasts and at points in between. Locally, Digital First operates The Sun of Lowell, the Sentinel & Enterprise of Fitchburg, and, since earlier this year, the Boston Herald. So intent is Digital First on cutting costs that it actually closed the Sentinel’s offices, switching to a “virtual newsroom,” which is apparently now acceptable corporate-speak for “no newsroom.”

The rebellion against Digital First got a boost last week when Ken Doctor, citing documents he had obtained, reported in the Nieman Journalism Lab that the company had run up a profit margin of 17 percent in the 12-month period that ended on June 30, 2017. The Lowell and Fitchburg papers were particularly lucrative, with a profit of 26 percent. The numbers were shocking, as they demonstrated that the papers are generating more than enough money to cover their communities if only it wasn’t being siphoned off by Alden principal Randall Smith to buy mansions in Palm Beach, Florida.

At the moment, there are no signs of protests coming to Massachusetts — but that could change. And Colorado continues to be a hotbed of unrest. In his latest, Doctor reports that former Post owner Dean Singleton, known as a brutal cost-cutter when he was at the height of his powers years ago, is so appalled by the cuts that he’s resigned as chair of the Post’s editorial board. “At the end of my career, I don’t want to be a part of it,” Singleton said. “The Post has been totally gutted of news coverage and of editorial coverage. That’s a fact.”

Several others also resigned, including editorial-page editor Chuck Plunkett, who was the force behind the Post’s anti-Alden Capital package last month. The reason: Ownership refused to let him write about another Digital First property in Colorado, the Daily Camera of Boulder, where editorial-page editor David Krieger was fired after he self-published a rant that criticized Alden. Doctor writes that the Camera might simply eliminate the editorial pages — which, I’m told, has become common practice at Digital First’s smaller papers. Back in Denver, some 55 Post journalists signed an open letter, saying they were “outraged” at the silencing of Plunkett.

The uprising against Alden Capital demonstrates that there is still money in newspapers. In fact, though the technology-driven changes that have decimated newspaper revenues over the past 25 years are very real, they are only half the story. Debt-free newspapers that are rooted in the community, and that are not forced to ship their revenues off to greed-crazed owners, can still manage to turn a profit. And though virtually all newsrooms have shrunk in response to the changing economics of journalism, a 17 percent margin obviously requires a lot more blood on the floor than, say, a more modest goal of 5 to 10 percent.

The challenge is that corporate chain ownership, accompanied by unrealistic profit expectations, remains the prevailing business model in the newspaper business, notwithstanding a few wealthy owners who are trying to buck the tide. Locally, for example, more than 100 papers, including key dailies such as the Telegram & Gazette of Worcester, the Providence Journal, The MetroWest Daily News of Framingham, and The Patriot Ledger of Quincy, are owned by GateHouse Media, which is controlled by yet another hedge fund, Fortress Investment Group.

GateHouse has its own well-earned reputation for operating its newspapers on a shoestring. Unlike Digital First, though, GateHouse appears to be committed to staying in the newspaper business rather that choking out the last drop of value — which is why a lot of us thought GateHouse would be the lesser of two evils when Digital First emerged as a last-minute bidder for the Boston Herald. (As it turned out, Gatehouse won anyway: Digital First moved the Herald’s printing operation from The Boston Globe’s facility in Taunton to the Providence Journal.)

The only hope now is that outrage against Digital First will harm Alden Capital’s bottom line. Economic pressure combined with the emergence of civic-minded local buyers could provide these papers with a fresh start — as happened several years ago in Pittsfield, when Digital First sold the Berkshire Eagle (and several affiliated papers in Vermont) to a group of local business leaders.

If nothing else, the rebellion against Digital First should help educate the public that it doesn’t have to be this way. Run properly, newspapers can still make money while fulfilling their mission of holding government and other institutions to account. Getting the hedge funds out will not solve journalism’s long-term economic challenges. But it would be a welcome start.

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It’s time to drive a stake through the heart of the White House Correspondents Dinner

Previously published at WGBH News.

You are forgiven if you thought this year’s White House Correspondents Dinner was a rerun. As with previous episodes, it featured a comedian whose entirely predictable raunchy fare came in for harsh, hypocritical denunciations; revulsion over the spectacle of media elites partying with politicians, lobbyists, and celebrities; and, of course, the ritual calls to end this benighted bacchanal once and for all.

“It never has been a particularly good idea for journalists to don their fanciest clothes and cozy up to the people they cover, alongside Hollywood celebrities who have ventured to wonky Washington to join the fun,” wrote Washington Post media columnist Margaret Sullivan. “But in the current era, it’s become close to suicidal for the press’s credibility.”

My purpose here today is not to offer yet another critique of the comedian Michelle Wolf’s routine. For what it’s worth, I thought she was pretty good. Despite what you may have heard, she did not mock the physical appearance of White House press secretary Sarah Huckabee Sanders. Instead, she delivered an R-rated political monologue of the sort that should have surprised no one. “It’s like going to a Billy Joel concert and being shocked he played ‘Piano Man,’” Judd Apatow, a writer, director, and comedian, told The New York Times.

So why the fake outrage? It has a lot to do with what the event has become: a celebration of money and power so cut off from the lives of ordinary people that it has come define everything that we hate about Washington.

Earlier this week I rewatched “Nerd Prom: Inside Washington’s Wildest Week,” a 2015 documentary by the former Politico journalist Patrick Gavin. The film offers an exhaustive (and, at times, exhausting) look behind the scenes at how the dinner metastasized from the first modest gathering in 1921, attended by 50 people, to the bought-and-paid-for spectacle it has become: a five-day affair marked by some two dozen parties and, of course, the dinner itself, which now draws some 2,600 people. I have showed it to several of my classes, and they are invariably appalled by the wretched excess that’s on display.

Not to mention the rude manners. Gavin devotes part of the film to showing us Washington reporters and their guests talking over virtually everything that’s taking place on the podium: kids winning scholarships (a total of $100,000 is awarded each year, which is, as Gavin notes, a pittance compared to the opulence of the event itself), Ray Charles performing “Georgia on My Mind,” even a Marine color guard.

“Washington audiences liquored up want to talk to each other,” explains George Condon of National Journal. “They don’t want to listen to the entertainers.”

What is truly revolting, though, takes place away from the dinner. Because, as Gavin shows, the event has long since devolved into decadence. The real stars of the week aren’t the reporters, aren’t the politicians, aren’t even the celebrities. Rather, they are the corporations and lobbyists. “It’s about influence and playing the Washington game,” the publishing and advertising executive Kenny Day tells Gavin.

As Gavin acknowledges, even at the time that he was making his film there was a sense that the dinner had begun its slow slide to irrelevance. A signal moment in that decline, he says, was former NBC News anchor Tom Brokaw’s outspoken criticism in 2012. “If there’s ever an event that separates the press from the people that they’re supposed to serve, symbolically, it is that one,” Brokaw said. “It is time to rethink it.”

Of course, that slide has only accelerated under President Trump, who — unlike virtually all of his predecessors — has stayed away from the dinner. No doubt his absence added to the controversy over Michelle Wolf. Whereas previous comedians who got rough directed their barbs at the president (Don Imus with Bill Clinton, Stephen Colbert with George W. Bush), Wolf was stuck with picking on Sanders, Kellyanne Conway, and Ivanka Trump. As CNN media analyst Brian Stelter put it, “The president is usually the center of gravity at the dinner, and the comedian serves as the counter-balance. But with Trump absent, the dinner is off-balance.”

The result was an impossible situation for the press corps, which came off as sycophantic and nasty at the same time. “It takes some doing to emerge from one event painted as simultaneously partisan and toothless, elitist and crude, adversarial and complicit,” wrote New York Times television critic James Poniewozik. “But the dinner somehow pulls it off.”

The White House Correspondents Dinner and all that goes with it became an embarrassment years ago, and it’s only getting worse. So what is the solution? Get rid of it. Just get rid of it. Drive a wooden stake through its corrupt and malignant heart.

Enough.

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