"Knightfall" excerpt:
(This excerpt picks up after Merritt's return from a leave to write a book about public journalism in 1994)
After the book was published and I returned to The Eagle in 1995, my world was totally changed. Jim Batten, who had been the rock behind KR's support for public journalism as well as a great friend, was dying. Tony Ridder's corporate power, with its bottom line emphasis, was being consolidated through the corporate advancement of a group of nonjournalists. Creeping corporatism was at its height with every important news decision having a marketing subtext.… The job had become one of dealing with constant financial pressures, the cutting back of newshole, staff reductions and hiring freezes, declining newsroom morale, all pointing to an uncertain future and a sure lack of psychic reward….
In the late summer of 1995, yet another round of painful budget discussions approached and, without my knowing it, a line of demarcation.
In my first fifteen years in Wichita, the budget process was a more-or-less collegial negotiation between corporate and the newspaper's publisher and editor. Normally at issue was whether we could manage to pay for the new things we wanted to do, the staff expansions and content improvement we wanted to make. Corporate would assemble the proposals from all the newspapers and project what bottom line that would produce. In the 1980s, that operating return number fluctuated between 7.8 percent and 15.0, averaging 12.2. After Batten's death, the average through 2003 was 17.8 percent, with several years over 20 percent.
At individual budget meetings up until 1990, there could be lively give and take about revenue projections ("You sure you can't get more out of that?") and costs ("What if you only did part of that this year and the rest the next?"). It was an assessment of realistic possibilities between two sides sharing a philosophy about newspapers. We rarely got everything we wanted for the newsroom, and sometimes considerably less, but the prevailing atmosphere was one of trust: that each side was doing its best for a common goal.
That began to change in the 1990s, in part because of the weakening economics of newspapers and in part because of Ridder's 1989 promotion to president. Within two years, the dynamics of budgeting reversed, becoming top down as corporate set operating return targets for each newspaper without consultation with the publishers, leaving the newspapers to find a way to conform. In 1993, a grim-voiced Ridder told a conference call of editors and publishers that the days of accommodation were over, the bar was being raised. Full fiscal performance based on steadily rising operating returns at each newspaper would be mandatory, and people who did not perform would not be around for very long. It was a blunt instrument blow delivered without regard for anything except the bottom line. The days of budget negotiations were over and the days of budget confrontations had arrived.
We prepared a budget draft for 1996 with an operating return a few tenths of a percent less than the previous year's 20.9, and holding it to that small a decline would be a stretch. In prior years we had tightened expenses everywhere we could imagine, with corporate's ambiguous admonition always in the background: You need to cut everything you can -- oh, but without doing real damage to the newspaper. We had years ago passed the point where damage to the newspaper began, but corporate was in denial about that. Do more, we were told, but always gratuitously added was, "Don't do anything you don't think is right."…
In prior years, we had eliminated virtually all off site training and stopped attending conferences and meetings of professional associations; we no longer followed local and state sports teams on the road and had reduced internships drastically; we took a pass on pursuing freedom of information claims beyond the first, cheapest steps; we cut back sharply on syndicated opinion columns for the editorial pages; we held vacancies open for months, or eliminated them altogether.
There was no fat left; we had cut through muscle and maybe chipped some bone in preparing the 1996 budget, but we would discover it would get worse.
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The session in the paneled, windowless, clubby board room at Knight Ridder's Miami's headquarters was tense. On my side of the table sat publisher (Reid) Ashe and Dan Moehle, chief financial officer for The Eagle. On the other side, (Clark) Hoyt, (KR vice president for news) and Frank McComas, the former publisher of The (Columbia) State, whom Batten had persuaded to move to corporate. McComas shocked us by announcing that we would have to make a 22.5 percent return, meaning we would have to identify $1.2 million more in either cost or revenue on a total budget of about $64 million. A "down" year would not be acceptable under any circumstances.
It struck me as an arbitrary number, as it was so far off our best and most honest projections, and I said so.
That's the number, he said.
Where did it come from?
We looked at what the company needs to make and that's what your contribution must be.
"Are you telling me, Frank, that we have to make that number, no matter what it takes?"
"That's right."
Ashe talked about some possibilities, some revenue enhancement long shots, but none that could approach 22.5 percent. Meanwhile, I was ruminating that even one half of one percentage point of relief, about $320,000, could add a crucial 5 percent to the newsroom budget for the year and surely would not do great damage to a $2.8 billion corporation. But there would be no relief, from either the tough numbers we had projected or the even more drastic ones McComas was mandating….
Further cuts in staffing or newshole or coverage would make the paper perilously less attractive for all readers, including our core Wichita area readers. The only way, we concluded, that we could get within hailing distance of the 22.5 percent was by slashing circulation outside the immediate Wichita area.
There was no fat left; we had cut through muscle and maybe chipped some bone in preparing the 1996 budget, but we would discover it would get worse. While a newspaper deliberately cutting circulation seems self-defeating, if not absolutely suicidal, the short term economics can be there. In a place with great distances between small towns, such as Kansas, hauling a morning newspaper 250 miles and selling it for fifty cents is a money losing proposition. Additionally, advertisers, most of whom are local merchants, made it clear each time we raised their rates that they were not particularly interested in paying to reach people a hundred miles or more away who might be only occasional customers of theirs. Yet outstate circulation has important benefits that can make subsidizing it worthwhile for both the newspaper and its city. In the part of Kansas we covered, roughly the southern half at that time, Wichita was a business and political force, at least in part because of the wide circulation of The Eagle. Editorial reach and influence in a largely rural state can mean a great deal in its legislature, and Wichita's educational, cultural, and business institutions were direct beneficiaries of the connection the newspaper made with people in rural areas.
And, more personally for a journalist, cutting circulation to make an arbitrary profit number is like donating your liver to a lifelong drunk -- a gesture without a real future for either party.
(Merritt reluctantly agreed to a first cut of 10,000 subscribers, about a tenth of The Eagle's circulation. He wrote a New Year’s Day column, reproduced in the book, explaining the action but denouncing the uncaring, profit-driven institutional owners of Knight Ridder stock who made it necessary. Later that year he was invited to take a phased, early retirement.)
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Excerpted from "Knightfall: Knight Ridder and How the Erosion of Newspaper Journalism is Putting Democracy at Risk." By Davis Merritt. Copyright 2005 W. Davis Merritt. Published by AMACOM Books, a division of the American Management Association, New York, N.Y. Used with permission. All rights reserved. www.amacombooks.org.
