By Dan Kennedy • The press, politics, technology, culture and other passions
The Boston Globe has the figures I was missing. According to the Audit Bureau of Circulations, the Boston Herald’s weekday circulation is down 17.4 percent, to 150,688, and its Sunday readership has dropped 9.6 percent, to 95,392.
The Patriot Ledger of Quincy and the Enterprise of Brockton, both GateHouse papers, lost readers as well, but not by as great a percentage.
Boston Globe reporter Keith O’Brien today weighs in with a story about the financial problems being faced by the Boston Herald and GateHouse Media, which owns some 100 community papers in Eastern Massachusetts.
GateHouse’s problems are considerable and well-known. The Herald, though, is a bit of a mystery, as publisher Pat Purcell tends to play his cards close to the vest. What we know is that the paper and its reporting staff have gotten tiny, but that Purcell appears to have hit upon a formula for survival.
O’Brien, after chronicling shrinkage in the Herald’s staff and circulation, offers a quote from Sunday editor Tom Mashberg: “How are things now? It’s tough. We once had a newsroom filled with reporters and a commercial department filled with commercial staff. And it has definitely shrunk.”
Mashberg, upset that none of the positive comments he says he made got into O’Brien’s story, has fired back with an e-mail to the Globe, which I offer here in its entirety, with Mashberg’s permission:
To Globe Editors:
Tom Mashberg from the Herald here. I’m pretty disappointed at the way the reporter slanted this story. We spoke at length about how the Herald was performing miracles to survive and turn a profit in a terrible climate. When I asked him what he was going to use from me, he sent me this email:
“Here’s what I will be attributing to you: The total staff figures you sent me yesterday. Is that OK?
“And I will be quoting you regarding how the Herald has dealt with the cuts. And about how the Globe should have seen these changes coming. The quote at the end of our interview yesterday when you said it was puzzling that the Times allowed this to play out like this at the Globe.
“This could change, of course. Still haven’t filed my story. So e-mail or call if you have any questions.”
No one expects a puff piece, especially between competing newspapers. But it looks like the editors got hold of this and turned it into a hatchet job. I guess that explains a lot about where the Globe is headed. Sad.
If O’Brien or anyone else at the Globe would like to respond, I will post it immediately.
Meanwhile, Herald media reporter Jessica Heslam today reports that veteran media-watcher Michael Wolff believes neither Rupert Murdoch (about whom he wrote a book) nor New York Daily News publisher (and former Boston real-estate mogul) Mort Zuckerman has any interest in buying the Globe.
Heslam includes this toxic quote from Wolff: “I don’t think that anybody’s going to buy the Boston Globe. The Boston Globe is now an unbuyable property. It loses too much money and it has too many union obligations. No one will want it now. They might have wanted it. They did want it two years ago. Not now.”
Left unsaid is that (1) Murdoch can’t buy the Globe, since the Federal Communications Commission bans anyone from owning a television station (WFXT-TV, Channel 25) and a daily newspaper in the same market; and (2) Murdoch and Purcell are business partners.
Finally, the second of Herald columnist Howie Carr’s sneering pieces about the Globe’s missteps over the years prompts an observation. Carr actually found a way to poke fun at the 1998 departure of Globe columnist Patricia Smith, who was caught fabricating, without making any mention of the other, far better known Globe columnist who lost his job that summer: Mike Barnicle, caught making things up and plagiarizing by — among others — the Herald.
Anyone who listens to Carr’s talk show on WRKO Radio (AM 680) knows how much he detests Barnicle. But, after all, Purcell hired Barnicle to write a column a few years ago, and though it didn’t work out, Barnicle still pops up occasionally in the Herald. Since Carr can’t write what he’d really like to write, perhaps he should go cover a press conference or something.
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.
Big news out of little Batavia, N.Y. As I was expecting he would, Howard Owens has announced that he’s taking over the Batavian, the online-only “paper” he launched last fall when he was still working for GateHouse Media. He’s going all-in, selling his house and getting ready to start covering the news and selling ads next week. He writes:
My wife and I are listing our house in Pittsford for sale and as soon as it sells, we will rent a place in Batavia (or maybe elsewhere in Genesee County). I expect we’ll see my wife’s byline in The Batavian before too long.
Best of luck to Howard. If he can make this work, it will be a model for a business desperately in need of some good news.
Howard Owens, GateHouse Media‘s director of digital publishing, has left the company, according to an internal memo by GateHouse president Kirk Davis that was obtained by Media Nation.
“Beginning today, Brad Dennison, VP News, will assume the additional responsibilities inherent in overseeing our online news operations and support,” Davis wrote in the memo, dated Friday. “Brad will be incorporating Howard Owens’ duties, as Howard has left the company. Howard did volumes to advance our digital strategy and leaves GateHouse with our deep appreciation.”
As you will see, I am missing point #2 of Davis’ memo. [Not anymore. Added at 11:46 a.m.] If anyone would like to pass it along, I will give you a free lifetime subscription to Media Nation.
GateHouse Media is a national chain that owns nearly 400 community newspapers, including 125 in Eastern Massachusetts. Though most of those papers are weeklies, some are among the best-known dailies in the state, including the Patriot Ledger of Quincy, the Enterprise of Brockton and the Framingham-based MetroWest Daily News.
Within journalism new-media circles, Owens is a highly respected thinker. Before joining GateHouse in September 2006, he helped launch pioneering new-media ventures at the Bakersfield Californian and, before that, the Ventura County Star, according to his LinkedIn profile.
At GateHouse, Owens pushed a strategy of Web-first journalism, exhorting reporters and editors to post breaking news stories on the company’s Wicked Local sites before running them in their print editions. He was also a strong advocate of quick-and-dirty video for the Wicked Local sites. In addition, he’s a co-founder of the Wired Journalists social network.
Owens’ blog, HowardOwens.com, appears to have gone dark, although a “whois” search reveals that he’s still the owner. Worth keeping an eye on, I’d say. He continues posting to Twitter.
Owens possesses one of the more interesting minds I know in new-media journalism, combining vision and practical experience. Yet his blunt, occasionally caustic manner has not played well with many of GateHouse’s reporters and editors, who work long hours for short money.
I interviewed Owens for a feature on GateHouse Media last fall for CommonWealth Magazine, a time when finances for GateHouse were perilous, but before the economy had gone off a cliff. Owens was particularly proud of the Batavian, a Web-only “paper” he had launched for GateHouse in Batavia, N.Y. (not far from GateHouse’s corporate headquarters, in Fairport), which he hoped could serve as something of a model.
“The overall revenue would be less than what you would get from a print newspaper,” he said, but added that by eliminating the cost of printing and distribution, he hoped the project could break even relatively quickly.
But Owens put his foot in his mouth when I asked him about complaints within the company that people didn’t have time to devote much energy to executing the company’s online strategy while also putting out quality print editions.
“There are some incredibly talented hardworking people in New England who are asked to do an incredible amount of work,” he said. “There are also slackers, and at some point you have to hold them accountable.” The “slackers” comment reportedly got him in some hot water with his superiors.
More recently, an internal e-mail Owens wrote became an issue in the legal dispute between GateHouse and the New York Times Co. GateHouse sued over Boston.com’s Your Town sites, charging that Boston.com’s practice of automatically “scraping” Wicked Local sites for headlines and ledes violated its copyright. (The suit was settled before it could go to trial.)
But though it might look as though Owens was endorsing the sort of copying and linking practices that Boston.com was engaged in on its Your Town sites, the issues were different in subtle and important ways. If you’re interested in learning more, here’s an overview I wrote for the Guardian.
What could be motivating Owens’ departure? Perhaps he left entirely on his own. If not, my guess is that Davis and chief executive Michael Reed have decided to run as lean an operation as possible in order to get through the recession.
In any case, Media Nation extends its best wishes to Owens, one of the good guys in the ongoing struggle to reinvent journalism. Davis’ memo follows.
DATE: February 20, 2009
TO: GateHouse Media Publishers
Regional Managers
GateHouse Media News Employees
Online Operations Employees
Fairport EmployeesFROM: Kirk Davis
RE: GateHouse News DivisionAs we adjust to the challenges confronting us, it is critically important that we remain positive and determined to emerge from this economic turmoil stronger than ever. As you know, the decisions we make must balance many needs ranging from controlling costs, maximizing our resources, evolving our print and online strategies and demonstrating to our employees that we’ll move swiftly and communicate often as we navigate this recession.
Today, I’d like to outline some important changes with the aforementioned context in mind.
I’m pleased to announce an expansion of the services provided to you and our employees through the GateHouse News Division. Beginning today, Brad Dennison, VP News, will assume the additional responsibilities inherent in overseeing our online news operations and support. Brad will be incorporating Howard Owens’ duties, as Howard has left the company. Howard did volumes to advance our digital strategy and leaves GateHouse with our deep appreciation.
In his expanded role, Brad will oversee and foster a stronger alignment of our print and online strategy, organizational structure, training and support. In turn, this will enable Bill Blevins to focus more on accelerating our online revenue performance, but more importantly, devote more time to strategic planning, identifying new digital opportunities and developing business models to support them. While there are many other benefits we’ll realize, I’m particularly excited due to:
1) The confidence I have in Brad and Bill, working closely with me, to bring greater clarity, responsiveness, support and service from a “field” perspective.
2) The opportunity we have to bring greater continuity to our overall content strategy and product development on all platforms, with a premium on scalability. This will allow us to make big plays when we want, where we want. In other words, we’ll benefit from simplified implementation of next-generation products en masse.3) Our company’s ability to step back and appreciate what we’ve all accomplished together, but to welcome a fresh approach by bringing our vast corporate talent in online development and support together with our premiere news division and its contagious enthusiasm and culture.
4) Our company’s increased capacity as a result of these changes to make a greater commitment to long-term and strategic planning so that we can all feel increasingly inspired about where our hard work can lead us. The possibilities are endless.
As Brad and Bill meet with staff and focus on this transition, I’ve asked them to be prepared to share their plans with us within the next month, which will no doubt allow them to take into consideration any suggestions they receive from you, our digital staff and our outside consulting firm (FTI).
Thank you!
Update: Owens writes on Twitter, “For those who asked: It’s not quite true that I’m out of a job. I’m just no longer employed by GHM. Details in a week or two.”
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)
New York Times Co. ($3.2 billion)
McClatchy Co. ($2.3 billion)
Journal Register Co. ($463 million)
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.
Randy Turner looks at GateHouse Media’s latest filings with the Securities and Exchange Commission and discovers that Kirk Davis, the just-promoted president and chief operating officer, will be extremely well paid.
According to a Form 8-K filed with the SEC last week, Davis is now earning “a base salary of $461,260.80.” He’s eligible for performance bonuses as well, which sounds a little like a baseball team that signs a free agent for $12 million and then includes an incentive clause for making the All-Star team. Why? Shouldn’t the All-Star team be a given for that kind of money? [Note: I should make it clear that I don’t know what Davis was making as head of GateHouse Media New England. It’s possible that this isn’t actually a raise.]
Turner writes that Davis is making more than double what his predecessor earned as GateHouse’s number-two executive, although considerably less than what’s paid to GateHouse chief executive Mike Reed — $925,000 in 2007 and $6.4 million the year before.
Turner, a journalist-turned-schoolteacher, is witheringly sarcastic in observing that the financially ailing GateHouse is paying its top executives so well at a time when it has eliminated contributions to its employees’ 401(k) plans.
I think Davis is fundamentally a good guy, and that GateHouse can only benefit from having him run its day-to-day operations. But this is terrible symbolism.
It looks like GateHouse Media has done something pretty smart: the community newspaper chain has named Kirk Davis (right) as its president and chief operating officer, the number-two position in the company. Davis, who currently runs GateHouse Media New England, will be replaced by his own number-two, Rick Daniels, a former top executive at the Boston Globe.
GateHouse owns some 400 newspapers nationwide, and more than 100 in Eastern Massachusetts. The company is currently involved in a nasty legal dispute with the New York Times Co. over GateHouse’s and the Globe’s competing online strategies.
I’ve interviewed Davis several times over the years, including, most recently, this past fall for a piece I wrote for CommonWealth Magazine. He is smart, passionate and an inveterate optimist.
I’m not sure anyone is up to the task of saving GateHouse — or, for that matter, the newspaper industry in general. But Davis is not someone I’d bet against. (Thanks to Walter Brooks of Cape Cod Today for blasting out the press release.)
Photo of Davis is from a video on the GateHouse New England Web site, which you can see here.
In my latest for the Guardian, I attempt to break down the issues in the case of GateHouse Media v. New York Times Co. to their essentials — and urge that the two sides settle their differences lest the future of online journalism be harmed.
I don’t plan to do much blogging this week, but I do want to call your attention to a few items:
Finally, a source has provided me with a copy of Barclays’ most recent report on the New York Times Co., the one that placed the value of the Globe at a mind-bogglingly low $20 million. I have posted it (PDF), so you can have a look for yourself. Perhaps a few gimlet-eyed Media Nation readers can find some gold.
I’m dubious. As you will see, Barclays values the Globe at somewhere between $12 million and $20 million — lower than the value of the “Worchester Papers,” which it places at somewhere between $15 million and $25 million. That can’t be right.
And, come on — the “Worchester Papers”? Does someone at Barclays think the Worcester Telegram & Gazette are two different papers?