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Lambert to the Slaughter

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June 26, 2008, 10:37 PM

The Strib Writers' Worst-Case Scenario

By Brian Lambert

(UPDATED: THE MAYOR WEIGHS IN. See below).

Let's take a walk on the dark side.

Although widely regarded as grumpy, kvetching curmudgeons, the crowd of Star Tribune union members gathered across the street from the company mine yesterday afternoon, under the first actually hot sun of summer, were upbeat. Or at least as upbeat as newspaper types ever are. Their guild leadership called a rally (and even whistled over an ice cream truck . . . for free treats) to do a little rah-rah number with the troops in the midst of the guild's current contract negotiation with Avista Capital Partners, the slickster consortium of hedge fund acolytes that is currently stuck with a newspaper in Minnesota.

The current Strib contract expires on July 31, and, personal opinion here, I don't see anything good or better coming out of whatever the guild and Avista eventually shake hands over. (Note to guild negotiators: Remember the anti-bacterial wash.) The guild has no discernible leverage other than appealing to Avista's better angels (excuse me, where's the cough button?), and Avista still wants $2.5 million in "budget reductions" from the newsroom alone.

Sympathy for fellow surly, bastard curmudgeons is all fine and good. But the reality—where journalism is supposed to tread, like it or not—is that by the time this negotiation process is finished, the Strib, which is still turning a pretty nice profit for Avista (just not enough to cover its disastrous miscalculation of a business it clearly knew nothing about and the debt it took on to milk it), will, again, be smaller and less useful and less relevant to the Twin Cities and much of greater Minnesota.

Strib-haters, who include everyone ever turned down for a job over there and everyone who thinks Democrats should be impaled on spikes and set out along I-94, will rejoice at the next round of seppuku at 425 Portland. That crowd will hail the dawn of a new "news" day, an era with "reporting" by PR agencies, talk radio windsocks, bloggers five years past their last W2, and whatever your buddy Steve heard over drinks at the Dubliner last night.

Since I subscribe to the Worst Case Scenario Theory (expect Armageddon, and be happy when it's just a rerun of Stalingrad), let me just throw this out as a kind of rats-gnawing-carcass view of what could happen here.

Avista wants out of this nightmare as fast as humanly possible with a minimum of damage to its "real" portfolio. It needs a buyer to do that. No (sane) buyer is going to come anywhere close to the Strib for even half of what Avista paid, and in fact, most of the likely suspects—people with a foot in publishing somewhere, a feel for what the Twin Cities will buy, and their own cash (or financing at extremely attractive rates)—fully expect to be able to pick the paper up for maybe thirty-five cents on every Avista dollar, somewhere less than $200 million.

But before they'll lay out even that, the guild and other Strib unions have to be scalped. If that means running off most of the biggest names in all their geezery, "pricey" glory, so be it. ("Pricey"—at $90,000 or even $110,000 for the upper crème—being a very relative term in buyer speak). Whoever might be interested in the Strib, and that includes Pioneer Press owner/union disemboweler, Dean Singleton, knows two things for certain:

1. Readers almost never complain about what is NOT in the paper. Therefore, you really can get away with a small, inexperienced staff covering a fraction of what's going on in town.

2. The whole newspaper game is a reimagining/rebuilding shtick today. "Stars" of print, the "reporters" subscribers are paying to read today, aren't necessarily going to be the stars of tomorrow's all-electronic, video-enhanced "information" company.

All that said, all that sunny stuff, I still find it surprising that the city fathers and mothers, the grand gentlemen and ladies who hold sway over business and cultural life in Minneapolis, are so notably silent on the de-contenting of the state's preeminent news source. Granted, they've all probably taken a hit from the paper somewhere along the line (either by omission or commission). But if they are so concerned about our "quality of life", they have to know that it won't be any better here with that primary news source reduced to forty-five kids two years past a "communications" degree with only slight hope of keeping up payments on an '03 Saturn.

I've left a call over at Mayor Rybak's office to see where he is on making some kind of statement—and rallying civic support of the Strib guild in this gloomy face-off with its out-of-town owners. I'll update if I hear back.

(MAYOR RYBAK's TWO BITS).

"There is no question that the Star Tribune is still an incredibly important institution," says the mayor to the question of whether the time has come for some kind of official statement from his office. "I have told [Avista] ownership that I am willing—in fact I've met with them and told them I am willing—to help in any way we can, whether helping secure new investment or finding new ownership if it comes to that." He adds, "Obviously, if it does come to that we would prefer new ownership be local."

But he quickly offers that, "We need a signal from management over there that they take this community seriously."

"Seriously?" Is it his opinion that Avista has failed to engage in extracurricular community activities commensurate with its property's outsized role in the life of this town?

Rybak, who as most people know once worked as a reporter for the Strib, as a local publisher for the late Twin Cities Reader, and with WCCO's Channel4000 online news service, says, "There are other companies in town, companies with out-of-town ownership, who are also struggling in this economy. But they [no names] have not bailed on their commitments to the community."

Rybak makes a point of Avista "pulling completely out of Step Up", the summer jobs program for teens that previous Star Tribune ownership helped launch. "It is a deep disappointment that they [Avista] have not played a role in this community comparable to their influence."

So is he thinking it might be time to say something officially in support of the Strib's guild (and other unions) in the current situation? "Well, I don't see my place at the negotiating table."

"But," he says, "if [Avista's] goal is to suck the life out of that newspaper, they'll find they don't have a friend in the mayor's office."

I'd still like to hear an official press release supporting the guild, perhaps noting the ongoing profit of the paper and the relative health of Avista's other "investments". 

Comments

Your article makes sense, is clear and shows an understanding of the issues ordinary people like me lack.

The basic problem with the publishing business is the business plan is broken and no one seems able to repair it.

I, too, sympathize with those afflicted with wage cuts or possible unemployment. But I see no percentage for management to avoid bankruptcy. As far back as I can remember, and specifically during the McClatchey reign, the Guild has dug in and avoided significant compromise. Management has little to anticipate from the union except ongoing friction and unhappiness; therefore, management may seek bankruptcy to end of the union contract.

Courage in this matter is Janis Joplin's refrain---"courage is nothing left to lose."

LAMBERT: Why would the Guild have "compromised" with profit margins in the 20% range? At what point do the people providing the content these companies sell get to make a claim on a proportionately larger share of the profits? Avista is tilting toward bankruptcy because ITS debt-based financial model is even more screwed-up than the newspaper industry's. But it remains to be seen whether a bankruptcy court judge would void the various union contracts. After all, Avista is doing quite well with its other businesses. Likewise, I'm told there is even precedent for retaining union contracts in the event of an asset sale.

The solution to all this newspaper money woes is simple: MPN. Minnesota Public Newspaper. A print version of MPR and TPT. Bill Kling could run it. He is a genius (no offense, Sid) at building broadcasting empires and eliminating, with public funds, any competition. Just like MPR there could be never-ending pledge weeks and bottomless state funding. Keeping and hiring "stars" with six figure salaries will be no problem, just like at MPR. This is a no-brainer, why didn't you think of this, Brian?

LAMBERT: I've learned to underplay my "genius" cards.

Banish that notion of elected officials rallying support for the Strib Guild. If they are true journalists, they would reject that sort of support as a compromise of their mission, which is to play watchdog over, what, the people they'd go whimpering to now for help and shoulders on which to cry? Pathetic.

Supply and demand, baby. The Guild overplayed its hand and got its journalists cushy paychecks that -- given the low production of many -- they couldn't match elsewhere in the job market. (If they could, why are so many still clinging to Avista's rotten, soulless skirttails, while hoping that the guy at the next desk gets zapped before them?)

Besides, Avista might want to muscle up in this negotiation just to avoid looking like a patsy or a pushover compared to those doing all the ruthless bloodletting in McClatchy, Media News, Tribune Co. and other newspaper companies. Last we heard, the Strib shed about 20 percent of its newsroomers, and that was more than a year ago. Big effin' deal. That means the joint is overdue for another thinning, with some newsrooms down to 50 percent of what they recently were.

No wonder the private equity bastards of Avista are failing. They can't even embrace the prevailing suicidal, cannabilistic business model of other media moguls these days. Rank amateurs!

A buddy of mine had a suggestion the other day that is, of course, unrealistic and that none involved has the guts to heed anyway: All newsroom employees at all beleaguered newspapers across the country ought to quit TOMORROW and stop enabling the bastards running these places. Let's see the suits salvage their investments then.

LAMBERT: Whoa. Did you survive the Donner party?

I think the MPR model is something Avista is working towards.

The "institutional" voice of the Strib is DOA, since the bloggers stripped away and exposed the all-out liberal loony left imprimatur.

The new on-line model needs to find a way to "pay per view" the columnist's content.

Any comment on the Supreme Courts view that child rapists don't deserve to die, or that the Second Amendment is only (apparently) one vote away from extinction?

LAMBERT: Before that last vote pulls the gun(s) out of your cold dead hands I'm guessing you're offering your services as executioner, jury and judge, in that order.


Bleuler: Conservatives should really steer clear of attempting the sysnthesis of 1960s pop cultural references and business model analysis. It just comes off so lame.

Janis Joplin sang it, Roger Miller sang it, Kris Kristofferson (Rhodes scholar) wrote it, and you, sir, misquoted it. The lyric is: "...Freedom is just another word for nothing left to lose."

And THAT is pretty much where the members of the Guild are now, utterly free.

"Strib writers" are about as interesting as Michelle Wie, as Ruesse succinctly puts it today.

Both are overpaid, over-rated, and well, not that inter'sting.

But you keep talking about them!

LAMBERT: I'm thinking of opening a new blog. "Smokin' TV Hotties Bertram Wants to Show His Rifle Range." Is that newsy enough for you?

What you say is true.

LAMBERT: Could you please e-mail this to my wife?

First thing anyone should do is get rid of the strib's little attempt at a weekly rag: Vitamn! Talk about writers being boring, this is a straight reprint of what is in the strib each week. They have no ad $'s in it and it can't be gaining any revenue for them. Why keep it? Keep around what decent journalists they have and get rid of more unnecessary expenses. Someone may actually miss a writer as opposed to no one missing vita.

LAMBERT: And Alexis goes where? Into Kersten's space?

Now yer talkin', but still not answering my questions!

BTW, I'll point out a good example of why the Strib is a laughing stock:

Their headline today: "Court redefines the gun debate".

Reality: "Second Amendment of Constitution Upheld despite liberal attempt to take guns away from law abiding citizens".

For you "journalists" who presumably treasure the First Amendment, what exactly do you think ensures the First?

I am very, very concerned that this was even up for debate, and even more concerned that 4 (idiot) judges dissented.

But, I will celebrate by purchasing a new weapon this weekend.

It's good for the economy!

LAMBERT: Is your mailing address Toontown?


No, generally if you send the check to "Armed Compound in Bucolic Western Exurb" it'll get there.

Lock and load!

BTW, I imagine sales are quite brisk at gun shops out east, now that law abiding citizens in DC had their constitutional rights to protect themselves and their property "re-established".

You really can't make up the fact that liberals are trying to overthrow our very Constitution.

You must be so proud!

(BTW, I will use this pulpit to advise those who are "pro-2nd Amendment" that if you are considering an AR-style rifle, now is the time to buy. If by some travesty Barry Hussein O. becomes "president", he'll likely issue a ban immediately. Likely he's never fired so much as a BB gun in his ever-so genteel life...)

LAMBERT: Feel free to enlighten us with your thoughts on habeus corpus.

Bertram, Jr asks: "For you "journalists" who presumably treasure the First Amendment, what exactly do you think ensures the First"?

Truly chilling to think what Bertram, Jr, armed to the teeth but still too scared to use his own name, means for us to infer here.

This could be a line written by Hanns Johst, who gave Nazi leaders and subsequently the world, the much, and often misquoted line from his play, "Schlageter," performed on Hitler's birthday to celebrate his victory, "when I hear the word culture, I reach for my gun." The actual line, which I can easily imagine coming from your slack gob, Bertram, Jr. is, "Whenever I hear of culture... I release the safety-catch of my Browning!"

In your rich, fascistic fantasy life, I imagine your answer to your fatuously posited question on what protects the Bill of Rights and the onstitution in general is, "me and my hammerless purse gun."

Do you think the title character's reflexive releasing of the safety on his Browning is in DEFENSE of culture (free expression), you vapid troglodyte

Your blog never fails to suprise me - I finally have something to agree with R.T. Rybak about.
And,apropos to the current state of the newspaper business, the correct lyric is a contraction: "Freedom's just another word..."

LAMBERT: Maybe you and the Mayor could do a Jimi Hendrix medley sometime?

Fashionable as it is to long for the days when local titans built empires of commerce that were also responsible corporate citizens, I think it's fair to point out that these same families--the Cowles, the Daytons, et al--cashed out and sold us down the river eons ago. The Star Tribune's problems didn't originate with non-local ownership, but rather just the opposite.

LAMBERT: Does this hardly unanticipated dark view have anything to do with "great" families conspiring to build taxpayer-supported sports stadiums? Beyond that, the "sell-out" families at spun significant profits into bonafide community activities ... in THIS community, not Westchester County.

The Strib used to offer destination jobs, where a struggling journalist might hope to arrive and spend a career after climbing one or more lower rungs on the job ladder. Apparently, getting there won't be much of an improvement, in future years. Since the Strib specifically and journalism generally offer declining potential for any jobs, let alone good ones, should universities scale back j-school programs to reflect the market? (I have a vague recollection of reading that the number of UM J-School students ranked second or third among all majors.)

LAMBERT: I hope they're telling those kids that they'll have to moonlight at Jiffy Lube to buy the double-wide trailer.

BTW, I imagine sales are quite brisk at gun shops out east, now that law abiding citizens in DC had their constitutional rights to protect themselves and their property "re-established".

I was unaware that the citizens of DC had any constitutional rights at all. After all, they are not considered a state. They have no representation in Congress. Didn't we fight a revolution or something about that?

Personally, I'd like to see them get their guns, head down to the Potomac, and start throwing boxes in the Potomac while chanting "No taxation without representation." Why should the fine folks of Boston get to have all the fun?

In addition, the theater of watching W. trying to address and quell the uprising would be fascinating.

Troglodyte? To quote Kevin McHale, "Rock bottom, baby. Rock bottom."

The Frogman sees darkness descending everywhere...especially in this troubled corner of the media world you write about even as it disappears. So I would ask you, planning-wise, at what point in the steady evisceration of local newspapering will it no longer merit coverage in this august forum?

Or, to speculate along the lines you suggest: If the Vikings win a game in some future palatial, publicly subsidized home and there's no hometown paper to report it, what then?

LAMBERT: That dark day -- on some hell-blasted heath -- of which you daydream could be closer than we all think. Once a "major daily" is really only covering pro sports in a "major" way, the game is pretty much over.

There are days when I am witnessing the dissolution of newspapers and feel the same sense of horror at what lies ahead -- "an era with 'reporting' by PR agencies, talk radio windsocks, bloggers five years past their last W2, and whatever your buddy Steve heard over drinks at the Dubliner last night" [very nice, btw]

Then there are times like the other day, when I pick up the Strib at the convenience store (I let my scrip lapse out of sorrow)and read Kersten making fun of women in Edina for recycling, and I think good F-in riddance, if they were that easily dissuaded of their moral compass.

Some day there will be no more local newspaper in Minneapolis, and people will hear stories told in bars about how they had one once but it was sold to a bunch of bankers from another bunch of bankers for a tax write off, and they will wonder how come they were too busy to care.

LAMBERT: I'm as guilty as anyone for making snarky comments about daily papers. But there is a direct "quality of life" connection between a professional and I dare say adult news staff and the ity around it.

Avista not the bad guy, they paid market value for the Strib at the time. All over the country newspaper ad revenue is declining at a faster rate than anticipated. Duluth's Tribune was purchased by a North Dakota publishing house and is experiencing the same dramatic decline in revenue and profit. With financing,the newspapers have covenants to meet with their banks so cutbacks are required when revenue/profit levels don't meet certain levels. Warren Buffet said if best - 'Simply put, if cable and satellite broadcasting, as well as the Internet, had come along first, newspapers as we know them probably would never have existed.' My heart goes out to workers in the newspaper industry but the fundamentals will continue to erode year after year. The economic potential of the newspaper Internet site is not a savior either - this content is free and will generate a tiny fraction of the past profit margins experienced by newspapers in the good old monopoly days.

LAMBERT: The situation with Avista is aggravated by their obvious business decision to treat the Star Tribune as a "strip and flip" vehicle. They took on way too much debt in this strategy. Unlike even a cutthroat operator like Dean Singleton, Avista is not a publishing company and appears to have done very little due diligence in assessing the underlying condition of the industry.

At least we can "celebrate" the teen dream 19 year old winning at Interlachen....

What a farce.

LAMBERT: God help me. What are you railing about this morning? Interlachen? Or a 19 year old winning? Which is a"farce"? Or, let me guess, is it the "Korean thing"?

Speaking of "culture", the Strib was downright restrained this year in it's coverage of the annual "celebration" of deviant (same sex) sexual habits (see "Bible, The".

It managed only one photo of a rainbow festooned prancing poofter - not-so-coincidentally pictured in front of a church banner.

I, like "ClaudeNRick" (tm), yearn for the days when the cross-dressers and leather guys were front-page worthy.....

LAMBERT: I expect to see you as Grand Marshal next year. No one else pays such avid attention.

I was railing against the manufactured "event" at Interlachen (where the young Bertram toiled as a caddy)wherein some aging Swedish-ish ladies competed against some rather comely American lasses, only to be beaten by some non-English speaking Korean teens.

No consistancy of play, no real competition, just some nice looking "outfits" on a lovely local course. And as predicted, blown out of any semblance of proportion by the local media....

Any "event" that allows nine children in free with a paid adult is not a real "sport".

LAMBERT: Did you have a mother?

I will only agree to Grand Marshall if I can have "ClaudeNRick" (tm) as my co-presenters.

I'll sit right in between 'em.

LAMBERT: I think we're making progress here.

It was really a bad time to buy a newspaper with a lot of leverage. Share prices, earnings and revenues at the Strib mirror those across the country as well as worldwide. Flight of advertising revenue & declines in circulation are unavoidable. The Internet has gutted the high-margin classified business that was relied upon. McClatchy sold the paper for $670 million less than they paid for it & this death sprial happening at the Strib is the tip of the iceberg nationwide. The Strib is particularly susceptible with an educated workforce in which a high percentage are computer proficient. Add the competition of the Pioneer Press & many fine local Internet outlets and I'm not sure anyone other than Avista could have done better. Avista will lose $100 million of their own money but the unfortunate, sad reality is newspapers are dying and will be a niche market in the future.

LAMBERT: I could live with the paper as a niche product, if the core that remained were a mix of the best writers, most aggressive reporters and in general, people who knew the most about what is going on in town. But I doubt it's going to work out that way. What we're moving toward is a "product" staffed only by those who have no other choice than to work for what the next Avista is capable of paying.

"LAMBERT: I could live with the paper as a niche product, if the core that remained were a mix of the best writers, most aggressive reporters and in general, people who knew the most about what is going on in town. But I doubt it's going to work out that way. What we're moving toward is a "product" staffed only by those who have no other choice than to work for what the next Avista is capable of paying."

THAT is it in a nutshell, Brian. They're extracting the nutritional value and overall tasty goodness out of a vital cultural entity (the daily newspaper) and leaving behind what can be produced by a bunch of skittish and shellshocked job-ists (I can't even call them careerists anymore, since there is no reasonable career in daily journalism these days. This is just folks clinging to their jobs, trying to ignore the genocide being perpetrated on their colleagues and praying that a union umbrella will cover them in the coming s*** storm. Their big bosses are clinging to their fat paychecks and, unless they're complete imbeciles, frantically funding some early-retirement accounts).

The baseball team that ol' Calvin Griffith and Howard Fox fielded back in the late '70s still were technically called "the Twins," even though all the talented players left for greener fields (and paydays) or were run out because of their salary levels. Those who remained were overmatched, as raw and inexperienced as they were cheap to employ, and conspicuously mismanaged. That's what is happening to newspapers, including "the Star Tribune." It requires permanent quote marks around its name now, for it really isn't -- and surely won't be going forward -- what it was just a few years ago.

Unlike the ball club, sadly, there is no deep-pockets savior coming in to purchase the operation and replenish the talent pool. Owning a sports franchise means you can sell years later to some greater fool; owning a newspaper means you were the greater fool the minute you bought it.

LAMBERT: I wish you weren't right.

Brian, I read with interest David Brauer's MinnPost story today, which surprised me with its optimistic tone. I'd be interested to hear your take.

Brauer basically reports that a wage freeze might keep the current newsroom intact. I'm skeptical, but of course I have no inside info to go on. What do you think?

Also, in your initial post, you said the Strib is "still turning a pretty nice profit for Avista." Really? I confess that I'm surprised. Can you add some meat to that assertion?

LAMBERT: From what I gather what David is reporting is accurate. I don't know all his sources, but I'm guessing he hasn't had much luck talking with Avista partners either. A bit like Singleton quickly settling his contract negotiations last year with the PiPress (for an effective decrease in compensation, considering "adjustments" made to most health care plans), I'm not at all soothed by Avista making compromise-like sounds. Some buy-outs. No immediate lay-offs. We'll see what the final numbers look like. Obviously the Guild negotiators want to put as happy a face on this as possible. But I maintain the medium-term goal (within the next year) is for Avista to again radically scale back staffing. Their debt is in no better control now than before. The industry numbers are in a brutal sag. Any potential buyer -- even a "benevolent" local investor -- will want overhead scaled back ... way back. Maybe I'm unusually gloomy. But I don't think so. Call it realpolitick.

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