February 26th, 2009 
joel UPDATED: Commenter Danny Lucas alerts P&T to the announcement Thursday of the shuttering of the 150-year-old Rocky Mountain News in Denver. The Friday, Feb. 27th issue will be its last, as parent Scripps cited millions of dollars in losses, including a $16 million in 2008. The demise of “the Rocky” leaves Denver with just one daily, the Post.
Over the weekend the company that owns the Philadelphia Inquirer and the Philadelphia Daily News entered Chapter 11 bankruptcy protection. The papers in Philly are looking at a 30% decline in revenues this year while they are trying to renegotiate on $390 million in debt.
Meanwhile, it was reported Wednesday that San Francisco could lose the Chronicle should the Hearst Corp. close up shop. They are reeling from a $50 million loss in S.F. last year, and hope to get buyouts from a large number of their 1,500 employees.
So the bad news in the newspaper business keeps coming. This era of economic tsunami has hurt all media, and the decline of the newspaper business model has been in effect long before now. However, it seems like there are some papers taking it more on the chin than others. The common thread among the major metro dailies who are really suffering is their financing via LBO: Leveraged Buy Out.
Not being a wizard in high finance, it boggles my mind how a century’s-old business who can keep a tight reign on their capital outlays (how often do you need a new press or computer system?), and can generate lots of dollars every day from a diverse client base, can get themselves into incredible amounts of debt? In the days of consolidation and easy credit, that’s just what happened.
When the stock market started beating up their securities a decade ago, some of these newspaper owners took their businesses private, buying out the stock and racking up a mountain of debt. Meanwhile cost savings has not kept up with the deterioration of the advertising model, and now you’ve got major cities where the newspaper is part of the fabric of the local lifestyle about to be without that resource.
Papers are actually fairing better in smaller towns like Erie, where the competition from the online space is less fierce, and the papers are better businesses in terms of debt load, salaries, and union situations.
Ok, so I’m probably the 15,000th blogger to talk about the demise of the mighty metro dailies. So what is the solution? I think that the big, half-million circulation daily is pretty much toast. However, there is lots of room for ten neighboorhood/regional bi or tri-weeklies with 50K circulation and lots of online content. Instead of $300 a column inch, it may be $20, but you multiple that by 10, and you are close!
I also think that it’s coming close to the time that the papers should shut of the spigot of free content on their websites. It’s silly for me to think that I should be able to read George Will or Maureen Dowd for nothing. John Grisham makes me pay, why shouldn’t they?
Whatever comes out on the other side of this newspaper mess, my hope is that great journalism will live to tell another tale, to open our eyes up to injustice and magnificence, and continue to draw us together as one community.
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John Grisham doesn’t carry intrusive pop-up and banner ads in his books. Most of the syndicted pundits are already being paid by their host newspapers. Anythng they may get from online resids is a windfall.
Billy Joel sang “We Didn’t Start The Fire”, and the lyrics tell us the headlines he had seen in his life.
Our own Joel, today sings an analysis of newsapers in decline, disarray, and discombobulation in the process.
Leveraged buyouts and consolidation schemes are a forerunner to the story end, but hardly the reason for what is happening.
But first, LaRocca makes a grand point on pop ups and ads.
You read it here first at Press and Tower……
flashing lights and strobe effects are KNOWN causes of seizures. This is also the style of online ad most favored by idiot ad makers. There will soon be a whopper of whopper lawsuit (maybe class action) as some lawyer, somewhere, makes the connection between online ads and seizures, and sues.
Grisham also delivers a whole other product from Dowd and George Will.
Mention “The Firm” and imaginations are stoked. Mention Will to 1,000 people and NOT ONE will likely recall a single column he wrote ever.
Mention Dowd, and after the laughter, ONE column may be recalled , if you asked 1,000 people to remember anything she wrote ever. Maureen recently wrote a column that was about 25% LATIN. To her, this meant something. To her readers, they do not speak or read Latin and were vociferous in comments of anger in reply to the tactic. Other than that, she has written zero worth recall.
Is it possible to write quality?
Anyone who lives in Erie, PA and has been here before the loveable Jeff Pinski stopped the practice, will have no trouble recalling Larie Pintia’s “Mother’s Day Tribute” on the priorities of life, mixed with the death of parent, which color carnation to wear signifying you are now an orphan, and the utterance of “Mama”….by a husband as he dies!
ETN would be wise to run that story STILL.
Erie, PA had a heyday in manufacturing. It is over (compared to the past, though plenty of manufacturing exists here). There is always a call for high paying welder’s jobs in the paper, but no one studies and learns welding anymore.
If you changed horseshoes in the early 1900’s, you had to adapt to changing tires, as the auto replaced horse and carriage. But there was an overlap time when horseshoe folks were still in need.
Newspapers refuse to learn tire changing and have resisted welding themselves to the Web.
First it was ignored.
Then, it was laughed at.
Now, it is feared.
Customers are getting their information online, not at the newspaper. Anyone under 25 probably has not looked at a paper in the past 5 years.
PC Magazine ended the print edition last month and went entirely online, but note the topic is computers. Their audience is likely to be online anyway.
The NY Times made you pay for content long ago.
People went elsewhere online for their news and information. The NY Times eventually relented and went no charge like everyone else.
The premier financial paper on the globe is Financial Times of London. Their editor comes on every day, with a reasonable notice to read all you want, enjoy three articles, then, you must register.
You can NOW read ten articles a month free.
After that, “I am afraid you will have to subscribe”, he adds, “but by then, you will want to subscribe”.
And the quality is so good he is right.
Even Wall Street won’t pay.
The Financial Times last month sued the Blackstone Group ( a Carl Icahn – like group of predators on otherwise successful businessesd).
The CEO subscribed to the FT (about $179 to $300 a year subscription, depending on content areas selected), but the CEO made HIS subscription available to Blackstoners, instead of EACH subscribing.
These are billionaires who will not shell out a couple of hundred bucks a year for content that makes them richer.
FT sued in court.
They will win.
It is called theft.
Failure to adapt, lack of quality writing, no vision, herd mentality, are all variables in newspapers biting the dust. But the primary reason was failure to satisfy the customer. And, as customers age, the new kids are saying “What is a newspaper?” as fast as kids from the 1990’s wonder “What is an 8-track?”
Newspapers have diluted advertising dollars in the paper,in fliers flooding the mailbox — STOP that ETN —
and online.
Had they gone online solely, they could charge MORE for ads, since that would be the only place advertisers could show their wares.
The most damaging effect of newspaper demise is the chance to destroy a democracy. An educated populace is required for a democracy to work (Greece proved that first). We have proved it too. And, we prove that a democracy in the Russian empire or Iraq is slim to none to create, since both have uneducated masses.
The behavior of newspapers in the past 20 years is borderline traiterous to our democracy.
No one in the USA has a clue about the recent attack by Israel on Gaza. So go to Drudge, scroll down, and hit “Jerusalem Post” and the Israeli’s write daily on what is going on live.
In 2007, a province in China was faced with massive death due to cold temperatures unheard of for the area.
They sent a plea for help to the USA. We sent two C-130 cargo planes full of blankets, and the pallets were being UNLOADED within 72 hours of China asking help.
A Chinese General was astonished and said he never thought we could respond and save lives so fast.
None of this is in your paper.
None in analysis to show that humanitarian aid, accomplished more than scud missiles, by making the locals around the globe like you.
Our Postal System is derided in newspapers (unless they collect cans of food once a year and get good press). Which newspaper is reporting to you that the Postal System is required and necessary to our defense needs?
In a biological attack, or in a flu epidemic (there is no cure for that bird flu mess China always gets. People would panic if they knew what was truth there),
YOUR mail carrier is the fastest method of distribution to everyone, for they call on everyone everyday. THEY will deliver the antidote.
Newspapers are not writing the truth, do not write well at all, fail to adapt online, show little imagination, and proceed through times with a total FAILURE TO COMMUNICATE.
There will be NO overtime when the final seconds of the 4th quarter are over for newspapers.
Add another death in the newspaper family.
This one, from Denver, is 150 years old.
There will never be a March 2009 edition, for the Rocky Mountain News will print a final edition tomorrow, Friday 2/27/2009.
View the legacy-like guest book (comments area) and add your RIP view. They announced at noon Thursday and 374 people have written their lament so far.
Cause of death was noted by the coroner out there and noted as “Changing Times”….an eternal disease with no known cure.
Story of demise here:
http://www.rockymountainnews.com/news/2009/feb/26/rocky-mountain-news-closes-friday-final-edition/
Interesting “Good Bye” from Rocky Mountain News after 150 years in the newspaper business.
Ironically, this Denver outfit was into the New Media as well as old, and still not making the grade of profitability.
Goodbye online at the site is here:
http://www.rockymountainnews.com/
Goodbye via Twitter and the newsroom is here:
http://twitter.com/RMN_Newsroom?page=1
Separately, I find myself defending the Erie Times-News this day. A local blog takes the ETN to task saying they have “contempt for fairness”, all because Ed Matthews applauds Wegman’s for distributing beer.
The theory of bad, bad, ETN is premised on advertising dollars to ETN from Wegman’s coming into play, other grocery outfits cannot compete with the brew-available Wegman outfit, and more nonsense blather.
Limited thinking is on display at the blog.
Wegman’s did all the legwork on being able to have beer sold in their stores. They fully deserve ALL the credit for having finally broken the PLCB policy of 1700, still in effect.
Moreover, politics is a likely suspect to the granting of a “Yes” to Wegman’s, when beer distribution has been monopolized in PA.
I do not know beer sales in the state, but I do know they are a good source of tax revenue for Ed Rendell.
If MORE sales can be produced by putting beer in stores, easily accessed by consumers, MORE taxes flow to Ed (Rendell, not Matthews).
When the other grocer outlets do their homework, they too can be a beer source. Wegman’s has made the precedent. It is a breeze to follow, except in the North East breeze area, where the blog of perpetual contempt blasts wrongly anew.
I think Ed Matthews got it exactly right!
The ETN made the right call!
(my God, did I just say that?) :-O
Disclaimer: I do not drink and could not care whether beer or the rest is sold in grocers or not. It keeps me sober enough to spot idiocy in blog posts.
Before they closed shop forever Friday, the Denver Post and the Rocky had a joint operating agreement to reduce their costs. On weekends, they only published one joint-effort paper a day. The bonus benefit to consumers was that on Sundays, we received eight pages of color comics!
I will miss my expanded Sunday morning funnies. I doubt my grandkids will ever see such a glorious thing. In fact, if the trend continues, reading the Sunday comics over cups of coffee togther will become only a fond memory.
Losing the only credible competition in town will no doubt have other impacts on Denver. When the grocery storefront marketers used to solicit for one paper or the other, we used to be able to walk by and say “no thanks, I subscribe to the…”. We’ll have to get more creative now.