Tag: Boston Globe

GateHouse’s Daniels wants it all

GateHouse Media New England president and CEO Rick Daniels has sent out a take-no-prisoners message to his staff that makes it sound like he can’t wait to capitalize on the Boston Globe’s woes.

Daniels, by the way, is a former president of the Globe.

Several sources within GateHouse passed Daniels’ memo along to Media Nation a little while ago. I can only assume that Daniels is itching to get this out there. Anyway, here it is:

Colleagues:

While the severe trials of major daily newspapers are fast becoming old hat, the news from our own backyard since last Friday has been far more jarring. There have been, and continue to be countless stories and posts that report or comment on the fate of the Boston Globe. We don’t know, and won’t for at least a while what the ultimate outcome for the Globe will be. After my many years there, I know there are many talented people working hard to find answers and solutions.

Obviously, what happens to Boston’s leading newspaper and advertising market share leader has a powerful effect on everyone in our business, as well as newspaper readers and advertisers. Whatever becomes of the Globe, our core task is to secure the health and strength of GateHouse Media New England, upon which all of our jobs depend. A few thoughts come to mind that I would like to share. We are working on dates for employee meetings in the near future, and the senior management team and I look forward to discussing the business with you, telling you more about our plans and actions and fielding your questions. Just three core thoughts at this moment:

#1. The Boston Globe is HARDLY alone in being afflicted by a significant decline in advertising. In the 4th quarter of 2008, concurrent with the meltdown in the financial markets, GHMNE saw our revenues worsen from results that were starting to be heartening. The 1st quarter was worse yet. Further, almost every publishing entity with which we share information has experienced a similar trend. As April progresses, we’ll know better if the slightly better results we saw in the first week are merely a blip, or the beginning of a positive trend. It’s pretty clear that we are all a long ways off from satisfactory revenue and cash flow results and whenever the recovery starts, it will be gradual.

#2. To use a stark term, the main objective of virtually all publishers now, and just about ANY business these days is “survival”. Most businesses have implemented the most stringent expense reductions — ever. We have been on this path for a long time, and as we all know, our cost reductions have been aggressive, but the savings have been sizable — and much-needed. In 1st quarter of 2009, our expenses are lower than the 1st quarter of 2008 by about 12%. While these reductions have been essential, they have not even offset ½ the downdraft in advertising, esp. in YTD 2009. We, all GateHouse divisions, and virtually all media companies, will have to continue to push ourselves — hard — and discover ways to tighten up even more. We have, together, and despite earlier reductions, still found ways to put out about 250 print and digital products that — provably — continue to attract a huge base of readers and advertisers. The key will be to preserve enough strength to not only deliver GHMNE’s value proposition — truly unique local news and information for readers and viewers and a large, attractive audience for advertisers — but also capitalize upon major opportunities we see before us.

#3. GHMNE certainly has challenges, BUT we have truly extraordinary opportunities as well. Just a few statistics to highlight our strengths and assets include:

  • GHMNE’s print audiences has grown (per Scarborough) while others have declined
  • 1.7 million weekly readers in MA — almost 500K more than the next closest competitor
  • 2.2 million unique visitors to our sites in March — up 58% from March, 2008
  • Over 20 thousand advertisers in 2008 — from tiny local shops to major national companies

These enviable facts (and so many others that I didn’t cite) are the result of a sustainable business model that is executed by all of us in a spirited and efficient way. We attract a huge base of readers, viewers and advertisers — both in print and online. As for core opportunities, we have — for many weeks now, and even prior to the recent news — been having very substantive discussions with our advertisers to uncover their needs and the opportunities we can seize in addressing their needs. Concerns about the future stability of other media competitors in the Boston market are being expressed to us, more nakedly, urgently and earnestly than ever.

The GHMNE senior management team believes we are likely on the cusp of a major, even “seismic” shift in the eastern Mass media markets that will have untold readers, and millions of advertising dollars up for grabs — but only during a short window that could be limited. Our aim is to grab our FULL share. This will take preparation, cohesion, and continued focus on preserving adequate cash flows when they are very difficult to secure. We have NO doubts we are ready for this test.

In closing, the senior management team wishes you and your families rest and peace during this holiday time, and we thank you for your continued commitment, constancy and support. We look forward to seeing you at upcoming employee meetings in the near future.

Rick Daniels
President and CEO, GHMNE

No doubt there’s a feeling of schadenfreude over at GateHouse’s Massachusetts headquarters in Needham. After all, it was just a few months ago that GateHouse and the New York Times Co. reached an out-of-court settlement over the Globe’s aggressive use of GateHouse headlines and ledes on its hyperlocal Your Town sites — a project headed, ironically enough, by a former GateHouse employee, the Globe’s Bob Kempf.

But all is hardly sweetness and light at GateHouse, as Daniels concedes in his memo. “GateHouse Annual Report a Tale of Loss, Indebtedness” is the headline on Mark Fitzgerald’s piece yesterday on the Web site of the trade magazine Editor & Publisher. And earlier this week, GateHouse announced it would close seven free shoppers in Southeastern Massachusetts and on Cape Cod.

Nevertheless, as a business, GateHouse might actually be healthier than the Globe right now.

Union don’ts at the Globe

One line I’ve been recycling this week is that the showdown between New York Times Co. management and the Boston Globe unions would not come down to midnight on the 30th day — that union officials, based on their own comments, seemed to understand that both the Times Co. and the overall situation was serious, and would quickly agree to $20 million in cuts as the price of keeping the paper alive.

Well, now I’m not so sure. Coverage during the week has suggested increased intransigence on the part of the unions, and especially of Newspaper Guild president Dan Totten. And today, Christine McConville begins her report in the Boston Herald thusly:

Boston Globe unions are showing signs of digging in against management as frustrated labor leaders say their members have already given up enough in the effort to keep the struggling broadsheet afloat.

Meanwhile, the Herald’s Jay Fitzgerald learns that it might be possible for the Times Co. to place the Globe in bankruptcy even without selling it. That could actually be good news, as it gives Times executives a way of restructuring the paper without having to find a buyer in a brutal economic environment and without having to shut it down. (And has the Herald been indispensable this week or what?)

It is despicable that the Times Co.’s cash-fattened managers have said virtually nothing this week. They owe an explanation to the community at least as much as they do to their employees.

Still, there’s no question that the systemic disaster that’s bringing the newspaper business down has more to do with the Globe’s problems than any specific mistakes by Arthur Sulzberger Jr., Steven Ainsley and crew. So it’s interesting to see, as Adam Reilly of the Boston Phoenix reports, that there may be a mounting insurrection among some reporters against the union leadership, who could conceivably destroy the paper rather than give up perks like lifetime contracts.

So did I leave anything out? Oh, yes. Almost forgot. Howie Carr is an idiot.

The future of the Globe’s D.C. bureau

Michael Calderone, at Politico, speculates on the future of the Boston Globe’s Washington bureau.

He’s right to think that it could be endangered. But in addition to the main reason he cites for not closing it — politics remains a major spectator sport in Boston, unlike almost anywhere else — he misses one.

According to insiders I’ve talked with, the Globe’s Washington coverage does very well in search engines and aggregators, making it one of the reasons that Boston.com pulls such impressive numbers.

If the New York Times Co. targets the Washington bureau, then it’s truly slash-and-burn time, as it will be killing off one of the building blocks for future success.

Timing is everything

Three months ago I posted the salaries and total compensation packages of the top executives at five troubled newspaper companies, including the New York Times Co., which owns the Boston Globe. Crickets chirped.

Today Christine McConville of the Boston Herald gives us updated Times Co. figures, and it’s the talk of the town — for obvious reasons, given that the Times is demanding a reported $20 million in union givebacks from the Globe as the price of keeping the paper alive.

McConville did some digging. I didn’t know that Globe publisher Steven Ainsley made $1.9 million last year, and the information she’s turned up on options and bonuses is fascinating in a stomach-churning kind of way. You’ve also got to love the nearly $250,000 in moving expenses Ainsley received in 2006.

On WRKO Radio (AM 680) this morning, Tom Finneran and Todd Feinburg were excoriating Times Co. managers for showering themselves with millions while they drove their business into the ground. Media Nation readers know that isn’t right — the entire news industry is falling apart for reasons that go far beyond the ability of the affected companies to turn things around.

But there is a deeper truth, and it isn’t pretty. For years, executives of news organizations — and corporations in general — paid themselves ridiculous amounts of money and argued that it was their expertise that led their companies to be so profitable.

Now we know they were essentially taking credit for the sunrise and paying themselves for it. The fraud has been exposed for all to see.