“They will be reduced to websites with just a small amount of local news, much of which will be determined by assignment and editing from afar.”
Jim Hopkins is the founder and editor of Gannett Blog, the leading media trade blog site about the nation’s largest newspaper company, Gannett Company. Gannett, of course, is the owner of the USA Today and 82 other daily newspapers in the United States, including five papers in the Gret Stet of Louisiana: The Shreveport Times, The Monroe News-Star, The Lafayette Advertiser, The Opelousas Daily World, and The Alexandria Town Talk.
Jim, a graduate of Brown University, knows a thing or two about Gannett. He spent over twenty years working at Gannett as both a journalist and an editor, the last eight of which were at the USA Today. Since launching Gannett Blog in 2007, Jim has kept a close and keen eye on his former employer, and in doing so, he’s helped shed significant light on Gannett’s digital transition and the ways in which corporate decisions affect local communities, Gannett employees, and the delivery of the news.
Last Friday, my friend Daniel and I were interviewed for a documentary about the American Way (which will be the subject of another post), and we both spoke, at length, about how Gannett’s ownership fundamentally changed our hometown newspaper, The Town Talk. Afterward, I reached out to Jim Hopkins and asked if he’d be willing to answer a few questions, and thankfully, he was happy to oblige.
Lamar: The Town Talk was founded in 1883, which makes it one of the longest continuously operating newspapers in the entire country. They were the first newspaper in the entire State of Louisiana to become computerized– way, way back when “computerized” was a word that actually meant something. There’s an entire book about the history of The Town Talk. To me, The Town Talk was always more than just a newspaper; it was a civic institution. In 1996, Central Newspapers bought The Town Talk for $62 million from the local family that had owned it from the very beginning, and shortly thereafter, Gannett bought Central Newspapers. Today, it seems like a shell of its former self. It’s no longer a civic institution. Their printing press buildings, which eat up an enormous footprint along our river, are all closed. Our paper is now printed nearly 100 miles away. The people who work there are now in constant fear of losing their jobs. And of course, because it’s the only newspaper in town, this is not reported properly. What should we blame for the decline of the newspaper as a civic institution? Is it the Internet? Is it corporate consolidation?
Jim: There are multiple factors. Readers, especially young readers have been abandoning newspapers for several decades. The Internet accelerated that trend.
The Internet also began siphoning off advertising beginning especially after 1995, when the Web proved to be commercially viable.
Newspaper publishers became complacent because they had long held monopoly positions in local markets. They stopped innovating and attending to customer service.
The sale of family-owned newspapers to big, publicly traded companies such as Gannett, Knight-Ridder, McLatchy and Lee Enterprises also played a role. Those are all companies that must attend to Wall Street’s demands, and Wall Street cares only about growing profits; institutional investors such as pension funds, mutual funds and other money-management outfits care very, very little for editorial quality.
Lamar: Once upon a time, all of the ad revenue that The Town Talk generated was recycled locally; now, the vast majority of it is shipped up to Virginia and then split up between executives and shareholders. Once upon a time, our newspaper was a major contributor to our local tax base and a major local employer. Now, they’re attempting to sell the giant buildings that housed their printing press- a business that had been as old as the paper itself, and they’re routinely firing key employees in an effort to increase efficiency. What is the real goal here? Is there evidence these executive-level decisions have resulted in increased efficiency, productivity, or profitability?
Jim: The goal is to bolster profits by cutting costs, especially the one expense that can be controlled: labor. Gannett has done a very good job of keeping its profits high, but almost solely through consolidation of work through press closings and other austerity measures. The question is: How long before the company starts cutting into bone, which would then have the opposite effect on profits. Only time will tell.
Lamar: What’s the future of the Monroe News-Star?
Jim: I believe the future for all community newspapers owned by Gannett is the same: They will be reduced to websites with just a small amount of local news, much of which will be determined by assignment and editing from afar.
Lamar: What’s the future of The Town Talk?
Jim: See above.
Lamar: Is this an overly simplistic explanation of Gannett’s newspaper acquisition strategy? We’re going to only buy in markets we can already cannibalize, and then, hopefully, we can cannibalize the entire market.
Jim: I think that is an accurate assessment.
Lamar: I know several employees at our local paper had to consent to furloughs, and I believe, based on my own personal experience, that these furloughs delayed the efficient delivery of local news. How much did Gannett save by enforcing furloughs?
Jim: At least $43 million, according to Gannett’s regulatory filings.
Lamar: How much did Gannett give out in executive bonuses?
Jim: Bonuses for the six highest-paid executives for 2008-2010 are in this table, in column No. 2. Chairman and CEO Craig Dubow, for example, received $1.75 million last year.
Lamar: If you were CEO of Gannett, what are the first three things you would do?
Jim: Suspend the strategic plan. Recommend that the board of directors be reconstituted with an entirely new slate of members. Resign my position.
Lamar: If you wanted to buy The Town Talk, what would be your opening offer?
Jim: I do not have enough information to even guess at a figure.
Lamar: Thanks. You rock. What’s the last book you read?
OK, so this is probably a profoundly stupid question. What prevents CENLA from creating another news”paper?” First, yes, costs. Tell me that there are not a dozen financially well endowed individuals/entities that does not see the benefit of a true reporting news source AND willing to fund startup. Second, no more paper. Go completely digital. Sorry, but the cost of actually printing and delivering are just not tenable. So how big would a viable startup staff have to be? Six? A dozen? Not my area of expertise. Not called The Town Talk? Well, possibly. Gannet won’t give that name away. Still, a better solution than nothing.
Brian, first of all, it’s not a stupid question; I’ve heard many respected businessmen and entrepreneurs ask the same thing.
It appears that the folks at Gannett may agree with you about the costs of printing and delivering a newspaper; after all, they have been transitioning, incrementally and somewhat awkwardly, into the digital age. There are a couple of huge problems, though: There’s not yet a sustainable model for monetizing a small community newspaper online, particularly in a small or mid-sized market like Alexandria. I’m not an expert either, but with respect to the paper’s name, The Town Talk, I believe this may be its most valuable asset. But its value is subjective; it’s about the economic “goodwill” of the brand. And the more the paper is gutted, the less valuable the name becomes.
If it’s not already clear, I have very little respect for the decisions made by Gannett during the last few years. Maybe hindsight is 20/20, but I strongly believe that if the paper had maintained local ownership, it would have adapted more nimbly and more effectively to the “digital transition.” Shareholder capitalism can bleed a community newspaper dry. A quality newspaper requires a robust newsroom and executives and editors who possess institutional knowledge about the community they serve. The scariest thing to me about Mr. Hopkins’s remarks wasn’t that the paper, at least as a print publication, could become obsolete. I think we can overcome that. The scariest thing was the notion that assignments and editorial oversight over local news could potentially be handled from afar, by clueless executives who are driven by the margins and not by the mission or the imperatives of real journalism or by any commitment to serving the needs of a mid-sized market.
The corporatization of the newspaper business by Gannet and others has followed a similar track as the local radio business. Clear Channel and others like them bought up stations all over the country. These stations would simulcast staged broadcasts from a centralized location and try to pretend they were actually in the town they were broadcasting in. Problem was…no local connections. In many markets…including Alexandria and Baton Rouge, locals have bought back the stations and turned them back into “hometown” stations with real DJ’s, local news, remote broadcasts, etc. I often wonder if newspapers will follow this reversal of trends. I also wonder at what point the TT and other papers like it will cease to exist. They have cut reporting, sales, printing, etc to the bone. But at the end of the day, you still have to sell a paper…and to do this, you have to have something to sell.
The craziest thing about what Gannett has done in Alexandria is that McCormack Graphics was a great business when Gannett bought the Town Talk. It was a big part of the purchase price, as well. They ran it into the ground, leaving the presses essentially scrap. This is an incredible display of incompetence. Shareholders should be outraged. The Opelousas Daily World, the first daily offset newspaper in the U.S., was the model for what Gannett has done to the Town Talk and is preparing to do to the News Star. When Michael Powell was head of the FCC (so, earlier in this century), it was written up in trade publications that Gannett was actually wanted to make Alexandria the site of a test case where it would buy a local television station (KALB was mentioned) to challenge FCC rules on market concentration. The Congress passed a law locking in the ban, and Gannett never moved forward. Had they been able to buy a local TV station, their approach to Alexandria might have been much different.