Globe editor McGrory talks numbers at First Amendment gathering

Because I get memos, this blog is perhaps more dedicated to the words and thoughts of Boston Globe editor Brian McGrory than is strictly necessary. But he does lead New England’s largest news organization, and we all care about the fate of the Globe at a time of economic uncertainty. So I thought I’d pass along a bit of what McGrory had to say at last week’s New England First Amendment Institute.

First, some numbers. McGrory said the newsroom currently employs about 225 full-time journalists, down considerably from its heyday of about 540 at the turn of the century. Last spring, when I was wrapping up reporting for “The Return of the Moguls,” my not-yet-published book on Globe owner John Henry, Washington Post owner Jeff Bezos and other wealthy newspaper publishers, the number I heard was 240. Counting bodies is more difficult than you might imagine. I don’t think there has been any significant change since last spring — just different ways of measuring the size of the staff.

McGrory also said that classified-ad revenue has dropped from $180 million a year when the newspaper business was at its peak to about $10 million today. Again, nothing that will surprise people who watch the newspaper business, but a reminder of why newspapers are not what they used to be.

On a more positive note, the Globe has signed up 92,000 digital-only subscribers, continuing its momentum from the spring, when it was around 80,000. Despite the Globe’s progress, McGrory acknowledged that it no longer has the largest number of digital-only subscribers among regional dailies. That distinction now belongs to the Los Angeles Times. But of course the LA area is far larger than Greater Boston, and digital subscriptions to the LA Times are much cheaper than they are to the Globe, which charges $30 a month.

McGrory attributed this rise to the Trump effect, which has driven paid subscriptions to The New York Times over the 2 million mark and another 1 million at The Washington Post. Though the Globe has focused mainly on local and regional news in response to the changing economics of journalism, it maintains a robust Washington bureau. In fact, McGrory said the bureau is actually adding a person, bringing it to six.

Finally, and perhaps of the greatest significance, he said that 87 people have different jobs in the Globe newsroom since the staff-led reinvention that went into effect earlier this year. The two ideas behind the reinvention: (1) to report the news online throughout the day and move away from the habits formed by the daily cycle of the print edition; and (2) to focus on being a “paper of interest” rather than a “paper of record” that dutifully cranks out stories that few people read.

Nothing about the Globe’s ongoing print problems, but McGrory had addressed that just a few days earlier in a memo to the staff. McGrory essentially described the problem as having eased. That comports with what I’ve heard, though there are still plenty of complaints from longtime customers about missed papers, early editions without scores from the previous night’s game, missing sections and the like.

Despite the difficulties facing daily papers, McGrory told the NEFAI crowd, “We have more readers of Boston Globe journalism than we have ever had in the history of the Globe,” an assertion that takes into account the paper’s print and digital readers, Boston.com and Stat, a health- and life-sciences vertical that’s part of Boston Globe Media.

As John Henry ponders the huge expenses he has no doubt incurred from the print fiasco, I hope he’ll keep in mind that people will not pay for a diminishing product. It could be disastrous if he offsets those expenses with another big cut in the newsroom. The upward momentum in digital subscriptions is the key to the Globe’s future. But that momentum will stall quickly if people start to believe that they’re not getting their money’s worth.

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Questions remain as The Boston Globe tries to solve its epic printing woes

Photo by WGBH News

Previously published at WGBHNews.org.

The big unanswered question about The Boston Globe’s printing woes is whether they are merely serious — that is, they remain an agonizing pit of misery for months to come but are ultimately fixable — or if, instead, they are so catastrophic that they will require publisher John Henry to get rid of his new used presses and start over.

No one other than a few insiders knows for sure. But the Globe took a good first step toward providing its increasingly disenchanted customers with some answers by publishing an in-depth story by staff reporter Mark Arsenault over the weekend on what we know, what we don’t know, and what we still need to find out.

It was about time. Before Arsenault’s story was posted on Saturday night, the Globe’s only published acknowledgment of the problem came in the form of a front-page note from Henry on Aug. 18 in which he wrote that the presses at the paper’s new Taunton printing facility “are operating too slowly and breaking too often.” He added: “We are embarrassed. We are sincerely sorry to all those affected.” He also said it was unlikely those problems would be resolved by Labor Day — an observation that proved to be prescient.

Arsenault did not address every aspect of what can now fairly be called a crisis. I would have liked to see him do some reporting on what by all accounts has been a terrible experience for customers trying to cancel their subscriptions for papers that often never show up. And though Arsenault reported union official Stephen Sullivan’s response to Globe president Vinay Mehra’s claim that the problems were due in part to employees who are “resistant to change” (Arsenault’s phrase, not Mehra’s), it struck me that the accusation deserved further exploration. I don’t think Mehra helped the situation by insulting the very front-line people who’ve been stuck trying to fix a mess created by the paper’s top executives — two of whom lost their jobs as a result.

Still, there was important information in Arsenault’s story, especially regarding a company in Lubbock, Texas, called West Texas Printing Center. The company reportedly installed a set-up similar to, though smaller than, the Globe’s, which led to a world of hurt before matters were finally brought under control. “First year, year-and-a-half, we struggled,” West Texas official Kristi Holt told Arsenault. “Finding the demons and eliminating the demons is a long, tedious process. I feel for y’all. I’ve been where you are.”

A year. A year and a half. Does the Globe really have that long to get it right? Probably not. The paper solved its previous self-created fiasco over home-delivery vendors in a few months, but it’s not likely the Globe’s customers can wait until 2019 for the current mess to be cleaned up. And let’s not forget that those customers include not just readers but other newspapers that have entrusted their printing to the Globe, including the Boston Herald, The New York Times, and USA Today.

Then there’s the nightmare scenario. Last week a 38-year Globe pressman, Phil McColgan, sent me an email outlining what he thought needed to be done. With his permission, I forwarded his message to my colleagues at “Beat the Press,” and it was featured in our report last Friday. “In my opinion unless Mr. Henry is willing to dig deep into his pockets and install the correct presses such as the Goss presses that are sitting idle in Boston [at the former Morrissey Boulevard headquarters] we are going to continue to struggle to make deadlines,” he wrote.

When you take the long view, the idea that a newspaper could be laid low by printing problems in 2017 seems ludicrous. The Globe is doing well on the internet front, having signed up more than 80,000 digital-only subscribers, more than any other regional newspaper. The Globe’s website could use some updating, and it’s long past time for the paper to offer a usable mobile app. But, overall, the paper has made decent progress in its quest to become a digital-first news organization.

The challenge is that print remains vital to the business of publishing a daily newspaper. The value of digital ads has cratered in recent years, largely because of Google’s automated auction system for allocating advertising to websites. Revenues from print advertising are a fraction of what they used to be — but they remain far greater than online income. Then, too, newspaper readers tend to be older, and they still like print. According to the Globe’s most recent year-old figures, paid print circulation was 143,000 on weekdays and 243,000 on Sundays.

Cynics sometimes observe that Henry got the Globe more or less for free: the value of the property underneath the paper’s former headquarters should offset the $70 million he paid in 2013. But Henry has invested significantly, even as he has made cuts in the newsroom in an effort to stay ahead of declining revenues. The Taunton plant cost Henry $75 million. It may cost him a lot more before this is over.

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Print is the Globe’s albatross — and lifeblood

The shame about The Boston Globe’s printing problems (and it will be a tragedy, not a shame, if they’re not fixed soon) is that, online, the paper is doing just fine. Earlier this year the paper reported that it had signed up more than 80,000 digital-only subscribers, the highest number of any regional paper in the country. The website looks good and is regularly updated, although a real mobile app would be welcome. The fall arts preview, which did not arrive with many people’s papers last Sunday, has been posted online; just bookmark it.

Unfortunately, for the second time in a year and a half the dead hand of print has reached out from the grave and grabbed the Globe by the ankle as it attempts to escape the past. It’s not like John Henry and company can walk away from print — print ads still pay most of the bills, and printing other newspapers is an important part of the Globe’s business strategy. That’s why it’s so important that the current meltdown be reversed as soon as possible

Of course we’ll be talking about this on “Beat the Press” tonight.

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It’s time for some answers on the Globe’s printing woes

In trying to think through what’s behind the crisis at The Boston Globe’s new Taunton printing facility, it seems logical that one of two things is going on. The first possibility is that the problems are fixable but that they have taken longer to resolve than anyone expected. The second is much worse: that the presses the Globe bought are not up to the task, will never be up to the task, and shouldn’t have been purchased in the first place. I certainly hope it’s the former and not the latter.

The Boston Business Journal’s Don Seiffert, citing “multiple sources,” reports that Boston Globe Media’s chief operating officer, Sean Keohan, has left the company — a departure that, Seiffert hastens to add, may or may not be related to the printing problems.

This comes within days of a tough statement from the Boston Herald — which is printed by the Globe — apologizing to its readers for the poor job the Globe is doing of printing its tabloid rival. “We talk with the Globe on a regular basis but unfortunately the remedies they put forth to solve the production problems have failed miserably,” the Herald said. (My WGBH News colleague Emily Rooney praised the Herald on “Beat the Press” for speaking out.)

A number of sources have told me that printing woes have required the Globe to set deadlines so early that the print edition is often missing sport scores — even when the Red Sox play at home. Papers are going undelivered. In addition to the Herald, the Globe also prints The New York Times, and, needless to say, that is not a relationship that Globe owner John Henry wants to endanger.

The problem right now is that few people know for sure what’s going on. When the Globe endured its home-delivery fiasco about a year and a half ago, the paper itself published the definitive story about what had gone wrong. It was thorough and unsparing. This time, we haven’t heard much since Globe Media chief executive Doug Franklin left in mid-July. We need to see the Globe once again rise to the occasion and report on what has gone wrong and how it is going to be fixed.

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Doug Franklin is out as CEO of Boston Globe Media; Vinay Mehra named president

Also published at WGBH News.

Update II: The Globe’s own story cites problems at the Taunton printing plant, so it looks like my speculation may have been on target: “But his [Franklin’s] tenure also saw continued press problems at the newspaper’s new Taunton printing facility, which has been a vexing and expensive headache for a media organization fighting to become financially self-sufficient in an era of declining print advertising. The printing problems pre-date Franklin, who started on Jan. 1.” Pre-date? It was only recently that the Globe began using the Taunton facility exclusively.

Updating: Vinay Mehra, the chief financial officer of Politico and a former executive at WGBH, will become the president and chief financial officer of Boston Globe Media, according to a memo to the staff from publisher and owner John Henry. Henry also says that he and his wife, managing partner Linda Pizzuti Henry, plan to take a more active role. No word on whether a new CEO will be named. The full text:

You’ve seen Doug’s note that he plans to leave the Globe. First, I’m very grateful for Doug’s hard work on behalf of this organization at an especially complex and sensitive time — as we moved from our decades-long home in Dorchester to Exchange Place and Taunton. These are not easy jobs in this industry, and Doug did his with passion, impact, and commitment. We wish Doug well in what will undoubtedly be successful endeavors in the future.

Second, effective immediately, Vinay Mehra will become the president and chief financial officer of the Globe. Vinay has distinguished himself at every stop along his career, most recently at Politico, where he was an active CFO with a strong grasp of the entire business and a commitment to a journalism enterprise supported by novel revenue streams. His prior work at WGBH gave him important insights into the Boston region, where he has always lived while commuting to Washington, and an understanding of the Globe’s vital role in New England.

Third, I will be a more active publisher and Linda will take on more responsibility as we push for financial sustainability in an environment that is extraordinarily challenging for news organizations dedicated to communities where facts and context matter.

This is a great and important news organization, one that is positioned for many more decades of success.

Best,
John

Doug Franklin (via LinkedIn)

Doug we hardly knew ye. Last December, Boston Globe Media named veteran newspaper executive Doug Franklin as chief executive officer to replace Mike Sheehan, who was leaving after three years in charge. Now Franklin is leaving, citing “differences” with owner John Henry over “how to strategically achieve our financial sustainability.”

At this early stage I have no idea what went wrong. I will point out that the Globe has been sending out frequent emails apologizing for late delivery of the print edition since shifting from its old Morrissey Boulevard headquarters to a new plant in Taunton — but I can’t say I know whether that has anything to do with Franklin’s departure.

Here is Franklin’s memo to the staff, two copies of which arrived in my inbox from my sources within the past few minutes.

Globe Team,

You are part of a very special institution in New England, and everyone here should be honored to serve our readers, advertisers, and broader community through our journalism and business offerings. While John Henry and I share similar passion and vision for the Globe, we have our differences how to strategically achieve our financial sustainability. With disappointment, I am resigning from the Globe, effective immediately, and will not be part of your work shaping the Globe’s future.

There are many great things about the Globe and equally many challenges in the industry. Our business will continue to reshape itself, with some areas getting smaller and more efficient while we invest in new technology and products for our future.

I hope that over the past six months I have provided some clarity, honesty and realistic optimism of what you are capable of accomplishing in the coming years. I have truly appreciated the support and our partnership during the brief period in which I was privileged in getting to know you and your work.

I took on this role because I love the newspaper industry, cherish our First Amendment obligations, and value the role of the Globe in the Boston region. It was a big challenge, but I also believed it was a good fit, given my record of successfully turning around newspapers. The Globe is one of the best brands, best newsrooms and most loyal reader subscription businesses in the country. Hard work is ahead for all of you and I know you will successfully navigate the challenges. I wish you the best and thank you.

Doug Franklin
CEO

Correction: This post has been updated to clarify Vinay Mehra’s new position at the Globe.

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Incoming Globe CEO Doug Franklin says he is ‘bullish’ about the future

Doug Franklin, the incoming chief executive officer of the Boston Globe, sent an email to employees earlier this morning. As these things often do, a copy landed in my inbox. Franklin will succeed Mike Sheehan on January 1. The full text of Franklin’s message follows.

Dear Boston Globe Team,

I’m honored to have the opportunity to be part of your very special institution. When I met with John Henry and the senior team, I knew immediately there was a “fit” that would allow us to do great work in the coming years. My career started in newspapers and I’m excited to partner with everyone to build the Globe’s pathway for future success.

There are great foundations in place, including outstanding journalism, a state-of-the-art printing plant in Taunton, new offices on State Street coming soon, important advertiser relationships, a strong digital subscription model with still more potential, and most importantly—you. Your work contributes to the important role the Globe plays in the community every day.

I have a lot to learn from you about the Globe and the Boston community, but there are a few common goals in all media organizations. We need to listen to our market—our readers, audiences and advertisers—and equally important, to those we don’t connect with so we can grow. We need to channel our talented team into a few important strategies that insure the best pathway forward. I believe our best competitive advantage is the incredibly talented staff of Globe.

Given the industry challenges, we have no choice but to move with speed and urgency. We won’t be reckless in our decision-making, but we must be fearless. I, working with the leadership team, will be as transparent, fair and timely as possible about the strategic decisions we make. We are fortunate to be privately held by John Henry, because it allows us flexibility in our approach. But it does not absolve us of the need to sustain ourselves financially. I know you’ve been making difficult decisions already, but we have more tough decisions ahead in terms of deploying our resources and talent toward new, promising strategies so the Globe can serve the Boston community for decades to come.

You will find me accessible; in return, I encourage your honest feedback. I’m a straight shooter with everyone. I will be a champion for the Globe and your work. You will have an aligned senior leadership team next year driving important strategies, and we will communicate regularly with you.

While there are no silver bullets in our business, I’m bullish about our pathway forward. Mobile and social platforms allow us to reach more readers than ever before with your expert storytelling. Our mission is unique: informing, improving and inspiring Boston. Our brand is among the best in the region—and the industry.

Some have asked why I’m returning to a metropolitan news organization. The answer is really pretty simple. I believe your work is important to our democracy and the greater good, now more than ever. John and I are determined to nurture a strategy that will keep the Globe at the center of civic life in New England for the foreseeable future.

Thank you for your hard work and commitment to the Globe. I’m looking forward to meeting everyone in the weeks and months ahead. I also hope you get time this holiday season with your family and friends. It’s important. Get recharged and look ahead to our important work in 2017.

All the best and happy holidays!

Doug

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Doug Franklin to succeed Mike Sheehan as Globe CEO

Doug Franklin (via LinkedIn)
Doug Franklin (via LinkedIn)

Also published at WGBHNews.org.

Doug Franklin, a top executive with Cox Enterprises and Cox Media Group, will succeed Mike Sheehan as chief executive officer of the Boston Globe on January 1, according to an announcement made a little while ago by Globe publisher John Henry.

Henry’s memo, a copy of which was obtained by Media Nation, is effusive in its praise of Sheehan, crediting the former Hill Holliday advertising executive with untangling the Globe from the New York Times Company, which sold the Globe to Henry in 2013; moving the Globe‘s printing operations to a new facility in Taunton; and preparing the news and business staffs to move to downtown Boston in mid-2017.

“These initiatives are as complex as they are risky,” Henry wrote. “Any one of them would be a once-in-a-lifetime challenge for an executive. But the leadership team, working under Mike, has tackled each of them.”

Of Franklin, Henry says: “As I’ve gotten to know Doug over the past few months, I’ve come to understand that he is fearless, energeticarticulate, and passionate in his desire to help the Globe achieve our long-term goal of creating a sustainable business model for high level journalism.”

The Globe covers the story here.

The full text of Henry’s message to Globe employees follows.

Three years ago, I was fortunate enough to meet Mike Sheehan and was immediately taken with his passion for the Globe’s mission and his love of our city. It didn’t take much to get Mike to agree to help. If I recall correctly, employment negotiations took all of about two minutes, the first minute on compensation, the second on length of service. We never discussed either again. I’ve been involved in many protracted negotiations over the years, but this wasn’t a negotiation—it was a meeting of the minds of two people determined to serve and protect one of New England’s most important institutions during a difficult time for American newspapers.

This past January, Mike reminded me that the original term we agreed to was three years and it was time to start looking for someone to succeed him in the Chief Executive Officer role before the end of the year. So we quietly embarked on a truly national search, one that involved many strong candidates. There turned out to be no shortage of talented executives who wanted to serve in that capacity. Ultimately Mike, Brian [McGrory] and I settled on a new chief executive officer we felt was perfect for the role. I’ll elaborate on this in just a moment.

On behalf of everyone at the Globe, I’d like to thank Mike for putting aside his other business interests as an owner, partner, board member, and investor and being willing to take on the Globe challenge full force from Day One through Day One Thousand. In essence, we were a new company three years ago—unwinding systems and processes from the New York Times was the first order of business. The second order was figuring out how to reduce our very high cost structure, much of it tied to the inefficient printing of newspapers on presses configured in the late 1950s and our presence in an 800,000 square foot building with astronomically high utility and upkeep costs. The third order was making sure the news organization of the future was physically located in a central, vibrant neighborhood, in space designed for how people work today while looking ahead to our digital aspirations for tomorrow.

These initiatives are as complex as they are risky. Any one of them would be a once-in-a-lifetime challenge for an executive. But the leadership team, working under Mike, has tackled each of them.

The Taunton printing facility, which was not even a concept threeplus years ago is printing 725,000 newspapers a week, with the third of five press lines now operational. Over Thanksgiving week, the Taunton mailroom inserted 16 million pieces for the Globe and six commercial clients. By March 31, 2017 Taunton will be our sole printing and distribution center with projected annual savings of $22 million, a higher quality product, and the opportunity to attract more commercial printing work.

I have no question that our move of the newsroom and business operations to 53 State Street will have equal impact on our culture and our business. Demolition of the space is complete, construction will commence on January 1, and we’re on track for a mid-2017 move. Many of you have seen the design and flow of the space, and it’s clearly reflective of an organization that’s serious about the kind of reinvention that is underway in our newsroom and throughout the organization.

None of these moves were on the radar screen—mine or Mike’s—when we first met in December of 2013, but they’re well on their way to successful completion. While these complex projects have not been without challenges and stress, they are critical building blocks in helping us achieve our goal of long-term sustainability. Some of these changes are far from glamorous, but each one is utterly vital to the success of this company.

I asked Mike what he is most proud of during his tenure, and, in typical fashion, he answered without hesitation or mincing of words. “When that newspaper lands on my doorstep every morning, it’s more relevant and interesting than it’s ever been.” Honestly, I feel exactly the same way. Mike took this job, in large part, to do whatever he could to support Brian, Ellen [Clegg], and every dedicated reporter, columnist, and editor who works here. He’s stood beside Linda [Pizutti Henry] and me when four Pulitzer Prizes were announced. He understands the vital role the Globe plays in the region, and he vigorously promotes our mission throughout the business community every day.

In fact, of all the things I’ve grown to admire about Mike, that might be what I admire most. But beyond his devotion to the mission of journalism in our community, he has for many years been the ideal ambassador for many organizations in Boston. He is deeply respected within the business community and has been one of the most important behind-the-scenes individuals in the charitable sector. He is widely hailed as a no-nonsense executive who is an unfailingly decent human being, giving his time to so many in all walks of life. Everywhere I go, someone inevitably says to me, “I was just talking to Mike about…”

Like virtually every other newspaper CEO in the country, Mike has overseen necessary downsizing, and we’ve reduced expenses $30 million since 2014. But he has vigilantly approached the task of reducing with the mantra of “newsroom last.” To Mike, this is not a cause-related strategy as much as it is business related. His conviction that quality journalism attracts a premium audience and commands a premium price is intractable. Given our growth in paid digital subscriptions, now approaching 75,000, that intractability is not unwarranted. Case in point: the exquisite five-part narrative on the journey of Will Lacey has garnered hundreds of thousands of visits, with thousands upon thousands of people signing up for email updates on the series.

Please join Linda, Brian, and me in thanking Mike for all he’s done. While he’ll no longer be a Globe employee in 2017, he’s assured us this is just a technicality. He will always advocate for our mission and our business, and he will introduce and help his successor acclimate to the Boston community.

Now please join me in welcoming Doug Franklin as Chief Executive Officer of Boston Globe Media Partners and the Boston Globe, starting January 1, 2017. Doug is a seasoned newspaper executive, dedicating much of his career to Cox Media Group Properties and overseeing virtually all aspects of the business while leading change in each role along the way.

Between 2013 and 2015, Doug was Executive Vice President and CFO of Cox Enterprises, the parent company of all Cox businesses including communications, media, and automotive. Cox is an $18 billion company with 50,000 employees. Prior to that, from 2010 to 2013, he rose from EVP to President of Cox Media Group which is comprised of their TV, radio, newspaper, direct mail, and digital operations. Doug has extensive experience as a newspaper publisher, overseeing four Ohio newspapers including the Dayton Daily News from 2004 to 2008, then becoming Publisher of the Palm Beach Post for a short but high-impact stint in 2008, and the Atlanta Journal Constitution until 2010. Doug has experienced virtually every challenge our industry faces todayand succeeded at every turn. As I’ve gotten to know Doug over the past few months, I’ve come to understand that he is fearless, energetic, articulate, and passionate in his desire to help the Globe achieve our long-term goal of creating a sustainable business model for high level journalism.

Doug’s responsibilities at the Globe will include all business aspects, including production as well as the newsroom. He knows that we have made many tough decisions over the past few years, and there are undoubtedly more to come in an industry that is still coming to terms with massive, continuous changes in advertising and delivery—both in print and digitally. We have no choice but to succeed, and we will. This vibrant region depends on it.

Doug has met with members of the leadership team a number of times, and they share my enthusiasm in welcoming him to the Globe. He’ll be moving here from his current home in Sarasota, and given his eagerness to begin, you may see him around the building over the next few weeks.

On Wednesday, December 21, we’re planning a Town Hall meeting at 3 p.m. in the Atrium so Mike can say goodbye and Doug can say hello. Please join us there.

Best,
John

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