November 25, 2020

When The Kansas City Star unveiled new presses in 2006, it was an event with only a bit less pomp than cracking a champagne bottle on a ship’s hull.

Four years in the making, the four-press unit, new and state-of-the-art, was enclosed in an eight-story glass “pavilion” covering two downtown city blocks with office space for 400. Total cost: $200 million.

Reeling ahead 15 years, you may have guessed how this movie ends. The Star announced Nov. 10 that it will vacate the building and no longer use the presses. Both had been sold to a wealthy local family’s real estate company for $30 million then leased back by the Star. Possible uses include a telemarketing center and eventual bulldozing for a new downtown baseball stadium.

The Star will switch to being printed 200 miles up the interstate at Gannett’s Des Moines Register sometime in the first quarter of 2021. By the end of next year, staff, already moved to the pavilion from a separate headquarters building nearby that the paper sold, will relocate to smaller offices. 68 full-time and 56 part-time pressroom jobs will be lost.

In announcing the changes, editor and president Mike Fannin conceded that deadlines will be earlier by several hours. Evening Royals or Chiefs games will be tough to get in the print edition.

Savings from the move, Fannin said in the Star’s story on the announcement, “will help us stay deeply invested in our journalism.” (My emails and voicemails to Fannin were not answered.)

Part of the math is pretty simple. As construction of the production plant was being started, according to a 2002 Editor & Publisher article, the Star’s print circulation stood at 266,000 daily and 380,000 Sunday. Now those figures have fallen to 46,000 daily and 66,000 Sunday (with another 37,000 paid digital subscriptions). That’s more than an 80% decline.

Of course, the number of sections and pages are much reduced, too. So the Star does not generate nearly the work to keep the jumbo press complex humming.

In less dramatic fashion, this scenario has been playing out across the industry for years — a trend accelerating quickly with the ownership consolidations and advertising reverses of 2020.

While McClatchy was still a public company, then-CEO Craig Forman would give regular progress updates on how many of the 30 papers were being printed remotely.

Printing consolidations, along with real estate sales, figure big in Gannett’s promise to realize about $300 million in annual cost-saving synergies from its merger a year ago with the GateHouse chain.

For example, one of the largest of the GateHouse papers, The Columbus Dispatch, abandoned home printing early this year in favor of the Gannett’s Indianapolis Star, 175 miles away. That eliminated 188 full and part-time jobs in Columbus.

Dumping real estate holdings and other “non-essential assets” is another leg of the cost-cutting strategy. Gannett expects to save $100 to $125 million that way in 2021, CEO Mike Reed said in the company’s most recent quarterly report earlier this month.

Tribune has had a real estate division for some years that has gradually vacated headquarters buildings — with moves announced this year at the Orlando Sentinel, The (Allentown, Pennsylvania) Morning Call, the New York Daily News and the Capital Gazette of Annapolis, Maryland. The iconic Tribune Tower in Chicago was sold for $240 million in 2016.

With working remotely the norm for now, the Miami Herald and some other McClatchy papers have gone officeless — leaving the space they had occupied while postponing the expense of renting new quarters indefinitely.

The Kansas City changes were facilitated by the company’s bankruptcy and sale. The pavilion and presses were bought by Ambassador Hospitality LLC in 2019; the Star leased them back as a tenant.

Chapter 11 bankruptcy proceedings concluded in August, and McClatchy was sold to its main creditor, hedge fund Chatham Management. The bankruptcy voided existing leases, positioning the Star to negotiate more favorable terms or exit the building as it chose to do.

Like other McClatchy papers, the Star no longer publishes a Saturday print edition. So far the chain has not gone to the next step of cutting print to one or two days a week as the Tampa Bay Times, The Arkansas Democrat-Gazette and, most recently, The Salt Lake Tribune and Deseret News all decided to do in 2020.

I view the shift to remote printing at the Star and elsewhere as a maker of where digital transformation is headed. As I reported in October 2018, the Star is charging some subscribers about $850 a year for renewals, all but pushing print loyalists out to a digital alternative or getting their local news instead from TV, social media or other sources.

The short history of the press project also encapsulates the story of the industry’s financial decline. Those troubles have been heightened this past decade by the rise of platform companies like Google and Facebook as potent advertising competitors; then this year by the pandemic-related ad recession.

Back in 2002, the Star was still a Knight-Ridder paper. Online vertical sites like Monster and Craigslist were beginning to eat away at the industry’s lucrative print classifieds franchise. With more than a bit of hubris, executives remained confident that local newspaper monopolies were a defendable franchise.

Papers had typically been anchors of downtown development, many — like the Star — for 100 years or more. The splashy Star pavilion was a recommitment to that goal as H&R Block and other Kansas City businesses were also building in the city center district

In the four years it took to complete the project, discerning investors were seeing trouble ahead. A group of three institutional funds that together owned about half of Knight-Ridder’s stock forced its sale later in 2006 to McClatchy. McClatchy never fully recovered from the burden of paying interest and principal on the $6.5 billion debt it took on for the purchase, defaulting this year on required pension payments as it sought bankruptcy protection.

As for the future of those presses … I spoke with Rosana Privitera Biondo, president of Mark One Electric (founded by her parents) and principal in Ambassador Hospitality.

She told me she had hoped that McClatchy would sign a new contract and continue printing there. “They told me that the Star was their most profitable and best paper … but I couldn’t get them to do it.”

In better times, used presses could be sold, disassembled then shipped by boat to publishers in Latin America or the Far East. Biondo said she has engaged the company that installed it in 2006. Because the press is in mint condition, selling it whole is a possibility.

Or maybe the press can stay put and be repurposed for printing paper bags or other products, she said.

There are also a variety of uses for the building, Biondo said, but the winddown of the Star’s presence for her and other civic leaders is “a very heartfelt problem for the community.”

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
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