Death of newspapers announced prematurely (yet again)
I woke up thinking today was much like any other on the news-about-news beat, that is until I learned from David Carr and the New York Times that "Print is Down, and Now Out."
Really? Let me beg to differ.
For starters, Carr is, as the country song goes, looking for love in all the wrong places if he wants validation from Wall Street. The financial prospects of newspaper organizations are not comparable right now to those of local broadcast or growing digital classified brands.
So investors are performing their role and corporate execs responding logically with the wave of spinoffs completed last week with Gannett's announcement it will split its community newspaper division and USA Today into a new company early next year. We shouldn't look to the money guys for a ringing vote of confidence in the public service mission and democratic role of print journalism.
Carr equates the spinoff to being "kicked to the curb." Kindred spirits like Michael Wolff are also pretty sure life as an independent company is a way station to print's doom -- and sooner rather than later.
Sure, the cushion of fat television profits will be missed. Maybe that does make the uncertain future of newspaper organizations that much scarier.
I am waiting to be fully persuaded that greater management focus and capital allocation will get the industry to turn the corner. But limited experience to date provides some encouragement.
A.H Belo was split from its broadcast division (since sold to Gannett) in February 2008. It (like the New York Times Company) unloaded other assets to concentrate on its core property, the Dallas Morning News, selling papers in Riverside, California, and Providence, Rhode Island.
Last quarter A.H. Belo achieved a landmark of sorts. It was able to offset continuing print ad revenue losses with revenue growth in its digital marketing and contract printing activity. That is a key first step in any industry turnaround, and credit "orphan" A.H. Belo for being one of the first to get there.
By the way, if Wall Street seems not to be giving the industry much love, it has at least been rewarding the changes at A.H. Belo (and Gannett too) with a lot of likes. The company's shares are up 40 percent in the last six months to $11.23, have more than doubled in value over the last two years and show even more dramatic appreciation from a 2009 low of $0.71 a share.
CEO and Dallas Morning News publisher Jim Moroney does not profess to be a miracle worker. The company has bumbled paywalls, for instance, while well outperforming the pack in the lucrative digital marketing services business. Launched debt-free, it has used the proceeds from the asset sales to put substantial bets on a variety of experiments. The results amount to steady progress.
"We're not declaring victory," Moroney told me in a phone interview, "but six years later we are doing just fine, thank you, financially and otherwise."
A spinoff, he said, "compels the company to be focused on the very different path forward newspapers need to pursue. Otherwise it can be tempting not to take the hard steps you need to take ... When you stand alone you have nothing to camouflage (bad results like those of 2008 and 2009) and make things look better."
While I don't think the sky above the newspaper business is falling, Carr's column raises a bunch of valid and serious concerns. A.H. Belo excepted, the industry has generally not reached a turning point where growing circulation revenues and other ventures cover for print ad losses. The second quarter was especially bad, though it is not clear whether the rest of 2014 will be the same or a little better.
I very much share Carr's worry that the volume and quality of news -- in print or on newspaper websites -- could fall at a number of properties to a near vanishing point after more rounds of cuts.
My mood, like his, was not improved by the announced changes last week at Gannett's Tennessean in Nashville, a shakeup veiled in a thick shroud of buzzwords and corporate speak.
On the other hand, Executive Editor Stefanie Murray, who is in her early 30s, comes with a mix of print and digital experience. I wondered almost a year ago whether an industry serious about transformation needs to walk the walk by giving top editor jobs to those with a strong digital background. Gannett and Advance have started to do so.
Murray (who, coincidentally, wrote the obit for the print Ann Arbor News as a reporter) deserves a little window to carry out her reorganization. For that matter, I can't see the case for calling the Gannett, Tribune and Scripps spinoffs failed experiments before they have really started.