More cuts coming at the Globe

Boston Globe editor Marty Baron tells his staff that as many as 50 newsroom positions will be eliminated soon — via buyout if possible, or layoffs if necessary. Baron concludes his memo with this:

All of us appreciate what a supremely dedicated and talented staff we have here, and we know the ache of seeing admired colleagues leave our newsroom. We also know the challenges of producing a high-quality newspaper and website when there are fewer of us to do the work.

Once again, we will have to assess everything we do. And so we will move promptly to evaluate a wide range of options. Not every option we review will come to pass, but reductions of this magnitude obviously will require us to make fundamental changes. Your ideas are welcome.

We have demonstrated repeatedly that we are a resilient bunch, capable of superb journalism even as we rethink our operations, reinvent our product, and refine our mission. We are being tested again, and a resourceful newsroom like ours can meet the test.

This is shockingly ugly stuff. I can’t imagine how the Globe can move forward without a dramatically redefined mission. Just focusing on local news isn’t going to do it, because that’s fundamentally about throwing bodies at stories.

Not exactly a novel observation that the newspaper business as we know it is rapidly coming to an end. (Via Romenesko.)

More: Adam Reilly of the Phoenix reports that Boston Newspaper Guild president Dan Totten wants any cuts to come exclusively from Globe management.

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.

Another round in the paid-content debate

Having recently regaled us with the flawed tale of a community newspaper that refuses to publish its content online, New York Times media columnist David Carr is back — this time with a suggestion that what we need is “an iTunes for news.”

Carr’s thesis is that news organizations can no longer afford to give away their content. But, as he acknowledges in his lament about the arrested state of online advertising, they’re not giving it away — or, at least, they don’t mean to. Rather, they’re failing to sell enough advertising to pay for their journalism. That’s a problem, but it’s not the same problem.

Carr knows as well as anyone that a good deal of what you pay for when you buy a newspaper doesn’t contribute anything to the bottom line. You’re paying for paper, presses, maintenance to those presses, distribution and — yes — the salaries of some good, hard-working people who won’t be needed if and when we move into a Web-only environment.

Given that, news organizations should theoretically be able to come up with an online version that pays for itself, or even turns a profit, without charging for access. That’s what national and local television newscasts do, and the model worked even better some years ago, when those newscasts were deeper and meatier than they are today. That’s what National Public Radio and its affiliate stations do, raising money directly from listeners in the form of contributions and from corporations in the form of advertising — uh, sorry, “underwriting.”

The problem with online news today is threefold: (1) sites like Craigslist and Monster.com have taken away much of the advertising that news orgs might have been able to sell; (2) the recession has halted the growth of online (and print) advertising; and (3) newspaper companies are staggering under so much debt that they need a rate of return that would be unrealistic even in a more favorable economic environment.

I’ve learned a lot over the past few years from Lisa Williams, who founded H2otown to cover her community of Watertown and now heads up Placeblogger to track community Web sites around the world. One of the most important is this: the future belongs to the small and the swift, and journalists — especially young journalists — ought to think of their careers the way tech workers do. Today’s journalists will probably live a rather nomadic existence, moving from start-up to start-up as we all try to figure out where the news business is going and where there might actually be money to be made.

Two cases in point.

Last week Politicker.com, a promising project whose goal was to expand into a network of 50 state-based sites, more or less went out of business, cutting back to just New York and New Jersey. The Massachusetts site is gone (though still up). Its blogger-journalist, Jeremy Jacobs, has taken a job at The Hill.

Politicker’s national managing editor, James Pindell, who blogged the New Hampshire primary for the Boston Globe’s Boston.com site, and who is himself a pioneering online journalist, is out of a job, although I can’t imagine he won’t get scooped up by someone very soon.

I’m not sure what happened. It could be that Politicker’s business model — getting advocacy groups (i.e., lobbyists) to buy ads in order to reach the intended audience of inside players — was not realistic. It could be that the model was brilliant but the timing was bad. In any case, the cycle of destruction and creation continues.

Because, this week, the long-anticipated GlobalPost.com makes its debut. Headed by New England Cable News founder Phil Balboni and former Boston Globe foreign correspondent Charles Sennott, the site is aimed at covering international news at a time when most traditional news organizations are cutting back.

It’s hard to imagine a more heartening development in journalism. And, yes, David Carr would rightly point out that GlobalPost plans some subscription-based services.

In fact, there may be a place for some pay services in online journalism, although I suspect it will be rare. Carr cites the Wall Street Journal, but people will pay for the specialized financial information to which a Journal online subscription gives them access. Sorry, but the Times, good as it is, doesn’t offer that.

Likewise, some people will pay to have their favorite newspapers downloaded onto a device like the Amazon Kindle, a step up in convenience and readability in comparison to the typical laptop.

As we move rapidly into the post-newspaper era, we’re going to see all kinds of experiments — mostly free, some subscription-based, most of which will fail, a few of which will succeed and serve as models for the industry.

The one thing that won’t work — and I think Carr would acknowledge this if it were put to him directly — is the notion that newspapers as we have come to know them will somehow be able to charge for their everyday content. That horse left the barn 10 years ago, and it’s not coming back.

Photo (cc) by David Muir and republished here under a Creative Commons license. Some rights reserved.

A more optimistic take on the Times Co.

No one doubts that the New York Times Co. is in financial trouble, or that the Times as we know it will someday cease to exist.

But Rick Edmonds, who analyzes the news business for the Poynter Institute, has done a great job of demonstrating that there’s no there there in an attention-grabbing piece in the Atlantic arguing that the Times Co. is rapidly running out of money — and, in a worst-case scenario, could shut down as early as this May.

The Atlantic article, by Michael Hirschorn, is pegged to the writings of financial analyst Henry Blodget, who has been sounding the alarm about the Times Co.’s cash woes for some time now. Hirschorn says even the drastic measures that the Sulzbergers might consider could fall short of being enough: selling their share of the Red Sox (already under way, supposedly), selling About.com (even though it’s one of the few bright spots in their portfolio), even shutting down the Boston Globe.

But Edmonds carefully walks us through the numbers, demonstrating that the payment-due deadline the Times Co. faces in May is not at all what Hirschorn seems to think it is. Edmonds writes:

Long story short, the company will be able to meet the May deadline. And corporate finance is not like an auto loan, in which the repo man comes if you miss a few payments…. [C]reditors typically renegotiate the terms — as they have done to much sicklier newspaper companies than the New York Times Co.

Edmonds also shows that Hirschorn’s comparison of print and online readers isn’t just “not apples-to-apples,” as Hirschorn himself acknowledges, but more in the nature of apples to cinder blocks. In other words, Hirschorn doesn’t even come close.

There are three problems with the newspaper business right now: (1) the Internet is destroying its business model; (2) too many newspaper companies took on way too much debt in building their empires; and (3) the worst recession since the early 1980s, if not the ’30s, is wiping out the advertising that Craigslist didn’t already grab.

Right now, it’s the recession and the debt that are taking the biggest toll on the business; without those, newspapers might have some hope of making a downsized but successful transition to online.

The Times Co. took a couple of small but important steps this week, unrolling lucrative front-page ads in the Times and announcing that it will soon do the same in the Globe. The future of legacy media is going to look very different from what we’re all accustomed to, as Edmonds himself acknowledges. But the Times Co. should be able to make it through the recession. After that, we’ll see.

Photo (cc) by Steve Rhodes and republished here under a Creative Commons license. Some rights reserved.

Those WBZ Radio cuts

I’ve been looking for a point of entry to comment on the recent cutbacks at WBZ Radio (AM 1030), which have claimed talk-show hosts Lovell Dyett, Steve LeVeille and Pat Desmarais, as well as sports reporter Tom Cuddy. It looks like Scott Fybush’s blistering commentary ought to do the trick.

Unfortunately, I never got to hear those shows, as they were on during a time when I simply never listen to talk radio. Sorry to give fuel to CBS’s fire — no doubt the company’s research showed that I was pretty typical.

But live and local ought to be part of any radio station’s mandate. As Garrett says, if CBS doesn’t want to live up to its responsibilities, let it find a buyer who will. (Via Universal Hub.)

Why the Times’ front-page ads don’t matter

Three reasons why the New York Times’ decision to sell display ads on its front page is nothing to get excited about:

1. The Times’ most important front page is the home page of NYTimes.com, which, like nearly all news Web sites, has included advertising from the beginning. In a world in which the Web is your primary delivery vehicle, it’s silly to pretend there’s anything sacrosanct about print.

2. Back in newspapers’ heyday, the Times was one of the few quality papers to run front-page ads at all. The reason we’re all saying that the Times is now selling display ads on page one is that it’s always run classifieds. Remember those ads reminding Jewish women to light candles for Shabbat?

3. The Times actually held out longer than many. As Richard Pérez-Peña notes, a number of excellent national papers have been publishing front-page ads for a while, including the Wall Street Journal, USA Today and the Los Angeles Times. Each of those papers has its own pathologies, but none is any more troubled than the New York Times is these days.

If front-page ads can help to offset newspapers’ mounting losses, then I’m fine with it. No doubt we can expect ads on the front of the Times Co.-owned Boston Globe in the near future.

Why GateHouse should settle its suit

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.

Monday morning odds and ends

I don’t plan to do much blogging this week, but I do want to call your attention to a few items:

  • Chuck Tanowitz and Adam Reilly have both written sharp analyses of GateHouse Media’s lawsuit against the New York Times Co. I think Reilly is on the mark with his observation that the Globe, through its Boston.com Your Town sites, is going beyond mere linking and is trying to establish itself as a substitute for GateHouse’s Wicked Local sites, while using GateHouse’s content.
  • Joe Dwinell of the Boston Herald has also weighed in with a good item [link now fixed] on the suit. I do disagree with his characterization of this as “David vs. Goliath.” Both GateHouse and the Times Co. are large, publicly traded media companies that are fighting for their financial lives. Call this Wounded Goliath I vs. Wounded Goliath II.
  • Sean Polay, a top Internet guy for Rupert Murdoch’s Ottaway Newspapers (including the Cape Cod Times and the Standard-Times of New Bedford), says he wouldn’t mind at all if Boston.com linked to Ottaway content. Interesting, given that Herald publisher Pat Purcell recently accepted Murdoch’s offer to run the Ottaway papers.

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?

More resources on the GateHouse case

Soon it will be Christmas Eve in Media Nation, so I don’t want to get too bogged down with blogging today. But I do want to call your attention to the excellent work the Citizen Media Center is doing on the matter of GateHouse Media’s lawsuit against the New York Times Co.

First, there is Citizen Media founder Dan Gillmor’s nuanced take. (Is Jeff Jarvis going to call his ally Gillmor “clueless”? It’s time for Mr. Buzz Machine to settle down with a nice cup of decaf and take another look at this.) Next, the Citizen Media Law Project offers an analysis of GateHouse’s legal claims. The center is also aggregating information about the case as it unfolds. Indispensible stuff.

Yesterday U.S. District Court Judge William Young rejected GateHouse’s request for a temporary restraining order, which would have prevented the Times Co.’s Boston.com from linking to GateHouse content immediately. (GateHouse story here; Boston Globe story here.)

A trial date has been set for Jan. 5, which seems pretty aggressive, given that Media Nation hears the Times Co. has been given a deadline of Jan. 6 to respond to GateHouse’s complaint. In all likelihood, the Jan. 5 session will just be a chance for everyone to exchange business cards and New Year’s greetings before getting down to work.