Digital First Media axes ‘Thunderdome,’ may sell its newspapers

CJR | Nieman | The Washington Post | Storify

Digital First Media will shut down its news hub in New York and may soon sell its newspapers. Local editors will have a phone call with management Wednesday morning at 11:30, and an all-hands meeting is scheduled for staffers at 12:30 p.m. in New York.

Dean Starkman reported Tuesday night that DFM plans to cashier its Project Thunderdome, a national newsroom for the company’s many newspapers, and lay off about 100 employees, including “higher-level executives.”

Ken Doctor writes that Alden Global Capital, the hedge fund that owns most of DFM, is “readying its newspaper properties for sale.”

They’re not yet on the market, but expect regional auctions of DFM properties (with clusters around the Los Angeles area, the Bay Area, New England, Philadelphia, and Texas) — unless Alden can find a single buyer, which is unlikely.

A “person familiar with the matter” told Starkman “the cuts are part of an ongoing strategy to take out about $60 million annually in expenses of about $1.15 billion in total costs, while reinvesting in its digital business, investments eventually expected to add $100 million a year to company expenses.”

A DFM spokesperson has not yet replied to Poynter’s request for comment.

DFM Digital Transformation Editor Steve Buttry is expected to leave the company, a source tells Poynter. Buttry was directing DFM’s Project Unbolt, which “aims to address the problem of digital efforts at the mercy of existing newspaper infrastructure,” Sam Kirkland wrote in January.

In The Washington Post, Paul Farhi writes the cuts are “a setback for DFM, whose chief executive, John Paton, has been a leading proponent of transforming print-centric newsrooms for the digital era.”

Last summer Paton gave a speech called “How Bad CEOs and Worse Editors Are Using the Past to Kill Our Future.” In it, he announced DFM had an operating profit and said, “if you don’t see the kinds of tough decisions to cut expenses in what is not growing –print – and increased spending in what is growing – digital – then get out because your company is surely dying.”

Digital First Media was created in 2011 to manage the newspaper assets of Journal Register Company and the MediaNews Group. Under Paton, the company moved aggressively into the digital space. Journal Register Company declared bankruptcy in 2012 and reemerged as 21st Century Media. It combined the two companies in late December.

Paton was long a skeptic of paywalls but he announced last year that most of DFM’s daily papers would adopt them.

Here’s a Storify of reactions to the news by Aram Zucker-Scharff.

This is a tweet from Mandy Jenkins, Thunderdome’s managing editor (and like several people at DFM, a former coworker of mine):

 

And here’s one from Jim Brady, DFM’s editor-in-chief:

 

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  • MT

    Paton has failed here so many times along with his group of corporate cronies. They bark about the “digital first” transformation while ignoring the driving force behind 80% of their revenue stream which is print. They all have fancy titles that start with VP, SVP, EVP, RVP, and not one single MVP on the whole team. They ride in on their white horses (actually its a yellow VW bug and they all have on big shoes and red noses) and act like they know your market and hand down the corporate agenda. The only problem is the corporate agenda has failed time and time again. When does the attention hungry PR junkie Paton get axed? Its a long time coming in my book and they need to eliminate a bunch of those non MVP’s at the same time. When does Alden finally see that he has done more harm to these community newspapers than good? Lucky are any of these papers that get sold off and have a new chance at life without DFM.

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  • pkipnis

    I love all this talk about the digital future, but will someone show me a positive income stream? There can’t be a digital future without local people reporting and writing the stories to fill the “digital” content and they won’t do it for free. So, back to the question, if everyone’s on the net then there’s nothing to distinguish or drive customers to you, period. The fact that someone goes out and reports on the local council meeting or high school sports event is what makes people pay hard cash to get hard copy on their doorstep.

  • Jim Hart

    I think this is the best chance these papers have to survive and transition intelligently into a digital future. Great news. Hopefully, they can be resuscitated.