No Confidence in Avista
By Brian Lambert
It's, of course, easy for someone with no skin in the game to urge
others toward risk-taking and bravery. (Think Dick Cheney and Iraq.)
But because the situation Avista Capital Partners finds themselves in here with the Star Tribune is hopeless, I've been convinced there simply is no good reason for unions at the paper to even bother negotiating with them. The game is over. Put another way, the unions could never reach a point where they could give up enough to save Avista from its multiple torments.
Those torments are: A. Lack of due diligence (in understanding the paths of media properties in the digital age). B. Absurdly inappropriate revenue expectations (also known as blinded by greed). C. Unfamiliarity with their product. And, D. The simultaneous collapse of the all the various Wall Street Ponzi schemes.
So when the newsroom Guild announced today that it was bailing on negotiations with the company (i.e. its creditors) for yet another round of wage and benefit cuts, I felt weirdly invigorated. "Finally. At least force their hand." Avista in Minnesota is a fiasco that must be brought to an end—the sooner, the better. Until it accepts defeat and leaves, there is, fundamentally, no shot at salvation for the Strib, much less reinvention and reconstruction.
I had a brief conversation this afternoon with Dave Chanen, a Guild steward and a reporter in his twenty-second year with the Strib.
To give you an idea of where Avista is at, one of its demands was to redefine merit pay, which Chanen believes something like 80 percent of the newsroom has accumulated (i.e. earned), in such a way that not only would it never be available to certain levels of the wage scale but those—80 percent—who have it could have it summarily withdrawn at any time for any reason.
One obvious reason, you there covering City Hall, would be because Avista desperately needs your money.
If terms like that sound like the kind of marauding, shark-like language of your average credit card company . . . well, that's because Avista has a lot more in common with CitiBank than any Midwest newspaper company.
So now? "Well," said Chanen, "they said that all the unions had to come to terms by the 16th. And that isn't going to happen."
Conventional wisdom has put Avista into bankruptcy by the end of this month. Now it may come by Inauguration Day.
But while Larry "Hustler" Flynt an Joe "Girls Gone Wild" Francis make noises about getting some of that easy bailout money (we laugh, but they might be more credit-worthy than CitiGroup), there's no one coming to the rescue at 425 Portland. As Chanen sees it, Avista is essentially already gone. Their creditors, Credit Suisse, etc., are calling the shots, and bankruptcy will bring a flushing of current management and the arrival of a new board of some kind to deal with the day after.
The outside possibility that bankruptcy might offer a better shot at a future than dealing with Avista has had at least a few Strib writers with whom I've spoken in a state of high indecision over whether to grab what will almost certainly be Avista's last buyout payday. Do they take it, or do they hang in, assuming it couldn't possibly get any worse than this?
There has been trepidation over actually collecting that lump sum buyout settlement from a company cratering into bankruptcy. "The company," says Chanen, "has promised us that they would make the case to a bankruptcy judge that those payouts should receive priority and that we wouldn't be pushed to the back of the line."
Uh, huh. Is that in writing?
"No."
At this point, my interest turns again to local community leadership outside the Strib. Chanen says that based on financial information Guild negotiators have seen, the Strib, as it is, which is to say at current staffing levels, could still be profitable . . . sans Avista's $450 million-plus debt blunder. If that is true, it would be, um, timely, for the broad-minded patriarchs and matriarchs of the Twin Cities to gather and discuss a rescue mission for a community institution at least as vital to our quality of life as The Guthrie or Target Field.
But because the situation Avista Capital Partners finds themselves in here with the Star Tribune is hopeless, I've been convinced there simply is no good reason for unions at the paper to even bother negotiating with them. The game is over. Put another way, the unions could never reach a point where they could give up enough to save Avista from its multiple torments.
Those torments are: A. Lack of due diligence (in understanding the paths of media properties in the digital age). B. Absurdly inappropriate revenue expectations (also known as blinded by greed). C. Unfamiliarity with their product. And, D. The simultaneous collapse of the all the various Wall Street Ponzi schemes.
So when the newsroom Guild announced today that it was bailing on negotiations with the company (i.e. its creditors) for yet another round of wage and benefit cuts, I felt weirdly invigorated. "Finally. At least force their hand." Avista in Minnesota is a fiasco that must be brought to an end—the sooner, the better. Until it accepts defeat and leaves, there is, fundamentally, no shot at salvation for the Strib, much less reinvention and reconstruction.
I had a brief conversation this afternoon with Dave Chanen, a Guild steward and a reporter in his twenty-second year with the Strib.
To give you an idea of where Avista is at, one of its demands was to redefine merit pay, which Chanen believes something like 80 percent of the newsroom has accumulated (i.e. earned), in such a way that not only would it never be available to certain levels of the wage scale but those—80 percent—who have it could have it summarily withdrawn at any time for any reason.
One obvious reason, you there covering City Hall, would be because Avista desperately needs your money.
If terms like that sound like the kind of marauding, shark-like language of your average credit card company . . . well, that's because Avista has a lot more in common with CitiBank than any Midwest newspaper company.
So now? "Well," said Chanen, "they said that all the unions had to come to terms by the 16th. And that isn't going to happen."
Conventional wisdom has put Avista into bankruptcy by the end of this month. Now it may come by Inauguration Day.
But while Larry "Hustler" Flynt an Joe "Girls Gone Wild" Francis make noises about getting some of that easy bailout money (we laugh, but they might be more credit-worthy than CitiGroup), there's no one coming to the rescue at 425 Portland. As Chanen sees it, Avista is essentially already gone. Their creditors, Credit Suisse, etc., are calling the shots, and bankruptcy will bring a flushing of current management and the arrival of a new board of some kind to deal with the day after.
The outside possibility that bankruptcy might offer a better shot at a future than dealing with Avista has had at least a few Strib writers with whom I've spoken in a state of high indecision over whether to grab what will almost certainly be Avista's last buyout payday. Do they take it, or do they hang in, assuming it couldn't possibly get any worse than this?
There has been trepidation over actually collecting that lump sum buyout settlement from a company cratering into bankruptcy. "The company," says Chanen, "has promised us that they would make the case to a bankruptcy judge that those payouts should receive priority and that we wouldn't be pushed to the back of the line."
Uh, huh. Is that in writing?
"No."
At this point, my interest turns again to local community leadership outside the Strib. Chanen says that based on financial information Guild negotiators have seen, the Strib, as it is, which is to say at current staffing levels, could still be profitable . . . sans Avista's $450 million-plus debt blunder. If that is true, it would be, um, timely, for the broad-minded patriarchs and matriarchs of the Twin Cities to gather and discuss a rescue mission for a community institution at least as vital to our quality of life as The Guthrie or Target Field.
© 2008 MSP Communications, Inc. All rights reserved
No White Knights will come in before bankruptcy, I think. Why would they? It will only be cheaper the longer this goes on.
There may be people out there who will swoop in. But let's be real. Will they be better for working journalists than what Joel Kramer is offering at Minn.Post? Seriously, that's not a living wage unless you are semi-retired.
The only hope is a merger of the PP and Strib, or a merger under a non-profit ownership. But any of those "hopeful" scenarios will extract major pain from the people who actually report, visualize, or edit the news.
And, I think, local TV or radio news people - whose operations already have taken hits - should take no solace in this. Their revenue is no better. And they have less resources to begin with.
We are about to find out how much the public really values news - and in a Depression-like economic climate. It could not be a worse time.
The old Chinese adage is "Crisis is Danger and Opportunity.
I see the danger and crisis. It's hard to see the opportunity right now.
I really hope I'm wrong.
LAMBERT: I omitted my standard line about "everyone taking a haircut" in what comes next. There's no question the unions will suffer, total staffing will decrease and people previously making a reasonably comfortable middle-class salary will be back where they were 15 years ago ... and forced to fill in around the edges with outside work. It ain't good. But bankruptcy, with, I hope and presume, some realistic assessment of value ... $50 million? (I don't know.) Will at least give possible local ownership a number to play with. I absolutely agree that consolidation of the two papers is inevitable, maybe even vital. But I'm trying to argue that quality reporting on cities of nearly 3 million people is necessary -- not a luxury we can do without, and that influential local citizens should assert their good citizenship and influence by watching this process very carefully.
Posted by: Paul Gustafson on January 9, 2009 at 1:43 AM
Avista will end up taking the bath. How long can Credit Suisse carry "non-performing" assets on its books? Not long as it seeks a healthy balance sheet.
Sounds like you're suggesting the local barons bargain hunt? Isn't that what Avista thought it was doing ;-)
Or, put it this way: As you say, removing the debt payment from the cash flow "could" make the Strib profitable, but for how long?
It's 'old media' business model that's the problem.
Here's a new business model: Slice off the newsroom, treat it as "contractors" for two business units ... online and in print.
Each unit pays a 'fee' to the contractors (newsroom costs allocated to each unit) and each unit is responsible to create a profit. That may mean the dead-tree edition suddenly costs $2.50 per day, but so be it.
That may mean the Web site has fewer contractors serving up the content because it's all they can afford.
The 'fourth estate' has to stop believing that it is entitled to exist.
LAMBERT: I think the fourth estate is well aware it has no god-given right to existence. My curiosity is if there are activist citizens who fully understand the necessity of a steady, reliable delivery of reporting on their community? I think the independent contractor idea has merit. But, a la, MinnPost, what are you prepared to offer people like Kennedy and McEnroe for the full story on Nasser Kazeminy? A few hundred bucks won't cut it. The reporting I consider valuable isn't note-taking from the Eagan City Council, it's asking sometimes impertinent questions of people who used to have some level of fear of an entity that bought ink by the tanker car.
Posted by: new media guy on January 9, 2009 at 8:28 AM
How about the Oppermans' as owners of a post bankruptcy Strib? Their aren't better nominees than that I don't imagine.
LAMBERT: I wonder if Vance will take my call?
Posted by: 108 on January 9, 2009 at 9:08 AM
Hey, Lambo, vis a vis a merger between the PiPress and the Strib, there is a rumor circulating (so this is not reporting but merely a publicly-passed news tip) that the PiPress is selling its property near the St. Paul airport. May well be utter malarkey. But after your call to them goes unreturned, try the St. Paul Port Authority or City Council.
LAMBERT: Checking ...
Posted by: Jim Leinfelder on January 9, 2009 at 10:21 AM
Wasn't this really a no-brainer for the unions? Since it would be impossible to cut costs enough to repay Avista's debt, bankruptcy isn't really a bargaining strategy...it's an inevitability. Why make concessions before you enter the process in which concessions will be forced upon you? One thing that is likely to be demonstrated in bankruptcy is that the paper's revenue and circulation trends, which are bad but sure to get much worse in the current economic downturn, at some point take it below book value. What kind of White Knight takes on an asset that will in the not-too-distant future be worth more dead than alive? Wait...don't say it...Zigi Wilf, right?
LAMBERT: Frankly, I don't know why the Guild bothered taking at all. But that "more dead than alive" moment is nigh, witness the disintegration of the Seattle Post-Intelligencer today -- in, like Minneapolis -- one of the country's most literate, plugged-in cities. I guess in current valuations th Strib's parking lots might be worth more than its news product.
Posted by: Frogman of Grant on January 9, 2009 at 10:58 AM
The environment exists for accountability, though, it just isn't ink or the airwaves like it used to be ... it's in 1s and Os.
The more I work in the new media environment the more I feel it is coming down to this: Accept there's a new way and work with it or keep trying to apply the old model and trying, and trying, and trying ...
The former leads to success and growth the latter to bankruptcy and failure.
Want the fourth estate in the digital arena? Create a site that gets eyeballs to your stories, or get your stories to sites that have eyeballs.
Yes not everyone is online, but that's the problem of those who aren't, not the problem of civic-minded millionaires society should ask to keep a dying business alive. As the joke goes, to see where CBS's audience is going just open the obituary page.
On paying reporters to get stories ... the question may very well be not "what are you prepared to offer" it may be "what are they willing to take."
In a supply and demand world, maybe it's that there are too many traditional media reporters for what the marketplace wants.
Another try: It's the responsibility of traditional media to reach the user, not for the user to consume traditional media.
How screwed up is the Strib's business model? We canceled the paper in late October. We are *still* being given the weekend edition free!
The cash-strapped Strib is paying to create and deliver a dead-tree edition in order to fake circulation to charge more to fewer advertisers. I understand the marginal cost of printing and delivering one more edition is small, but, to an advertiser, how is that not borderline fraud?
No wonder advertisers are flocking to Google and online ...
LAMBERT: The games the papers are playing with "paid circulation" are pretty silly. If $20 for six months is still "paid" the money spent on auditing is wasted. And while I hear what you're saying about the fundamentals of a market economy, there are genuinely valuable aspects of traditional media that important enough to civic transparency and accountability that they are worth underwriting (as a non-profit) or as I've suggested recently some kind of BBC-style enterprise. Obviously we're talking only a fraction of the current content of the Strib, but a Gawker Media-like family of properties is an interesting model (owner Nick Denton's problems withstanding). as a "new media" type I assume ou saw that item abort Hewlett-Packard's "electronic paper" yesterday ... in roll up scroll form. If that idea actually works, the dead tree and trucks part of news overhead can be separated out of an operating equation.
Posted by: new media guy on January 9, 2009 at 11:14 AM
Why not a Hecker / Pohlad ownership consortium?
Auto and bank ads, lots of Twins coverage...
Wilf could own the building, and attach a stadium!
LAMBERT: Does Denny know how to read?
Posted by: bertram jr. on January 9, 2009 at 12:58 PM
New media? Old media?
I think I know the disctinction, but all I hear "greedy union workers" and "cutting-edge bloggers" when those two terms are thrown around.
There's a lot to like and loathe about the different approaches to journalism these days. There's obviously room for both mediums to continue...and I hope I don't live to see the day when the last big-city newspaper rolls off the press.
It was pretty depressing to read Nick Coleman's final(?) column yesterday. It read not only like the death of his job, but the death of the paper. He made a great plea to spare both, but I'm thinking that, aside from the knuckleheads that scream "LIEberal" in the comments section on the website (who obviously didn't read the column), there aren't enough people that will care.
LAMBERT: Well, one critical part of a new business model is scaling a news organization for the people who truly do care, and not the "busy", "occasional" reader who ownership WANTS to weave -- however artificially -- into the company's demographic "sell". I have long argued that people like Nick have more things to say ... and in more interesting ways ... if you can get them out from under the commercialized journalism model of acceptable tone and content. Likewise veteran writers like Mark Brunswick -- who served up compelling blog copy on his visit to Iraq -- and on and on. The "blogger" thing generally implies someone with little or no respect for facts. This is not the case when you let professionals who value their credibility write in their own voice with a clearly understood "personal license".
Posted by: AndyG on January 9, 2009 at 2:26 PM
"This is not the case when you let professionals who value their credibility write in their own voice with a clearly understood "personal license".
Didn't you just describe MinnPost.com?
It just needs to double everything: Staff size, presence, pay.
In terms of "right sizing," growing would seem to be a lot easier, or at least less painful, than shrinking. Adding staff, boosting pay from nearly nothing to barely something and increasing one's presence would seem a happier journey than buying out/laying off, slashing merit pay and overtime and overcoming the ridicule and apathy that the big dailies face.
In the past, I might have agreed with a claim that the Strib or PiPress "brand" held value for a news-gathering operation (Web only). But then those places gutted, and continue to gut themselves, so the audience knows they are shells and shed of much value. Might as well trust the start-ups.
LAMBERT: My concept of "personal license" might push the envelope a bit further than MinnPost cares to go. But as a model, MinnPost is as close to what the "new model" might look like -- including the pro bono-style pay scale -- as anything we have. But the tricky calculus of maintaining traditional credibility sufficient for a "quality" demographic while simultaneously acquiring eyeballs for profitability probably requires a show biz/personality factor that Joel Kramer and his team are not comfortable with.
You are of course right that the papers have gutted themselves. But I can't decide if the general public notices what's not there as much as the fact that other "stuff" (internet, TV) is so much more "fun" to use.
Posted by: anonymous on January 9, 2009 at 8:10 PM
I don't know why we don't frog walk these bankers. Avista was a bunch of former Credit Suisse guys. The whole thing went down to create a tax break in a larger transaction put together for a guy who flew in on a private jet, getting all pumped up for the deal by listening to Springsteen. These are just the stupid nuggets available in ten minutes online to stupid guys like me. And now we have no paper. The joke is on us.
LAMBERT: The flaming demise of the private equity/hedge fund buckaroo my be one of the least lamented passings ever.
Posted by: Paul Scott on January 9, 2009 at 9:01 PM
Just to make sure I'm clear about the general desire here ... it's not to save the auto, business, lifestyle, sports sections ... it's the hard news metro and state stories, right?
Would keeping that part of the paper meet the civic need being discussed?
And, also to be clear, all the writers, reporters, etc. referenced are available in new media. "New media" to me is the delivery system, not the work being delivered. Journalists blog, bloggers do journalism.
The problem is the business model. Content is content in print and analog ... it's all about how it is organized, packaged and shared.
A few points:
+> It's way, way *cheaper* to deliver content in new media. Overhead is way, way down on the delivery front.
+> Past media company margins are gone, probably forever. My first day working at one of the top TV stations in town in the mid- to late-90s there were budget cuts. Why? Because the margin dropped below 30%
+> After working on the news side until four years ago, my job now is monetizing media web pages for old media sites. It's been an eye opener. While the the ad rates, revenue on old media sites doesn't equal what's departing, it is growing and each old media medium can cross into previously unavailable ad types. startribune.com can make money on video pre-roll. TV stations can go after real estate and classified type ads. While they're losing their past base, a large one has opened up to compete in.
What I'm trying to say is, to survive, the startribune.com must compete in the new media space. It's a cold, hard reality. Want to support the paper? Go to its shopping section and look for something you need and buy it.
LAMBERT: To your first point, all the community at large needs to protect is "basic news", which to me includes investigative stuff and PLENTY of well-sourced commentary/analysis. Lifestyle, sports, etc. will survive just fine in the all-digital realm.
Posted by: new media guy on January 9, 2009 at 11:15 PM
Yeah, Avista will get zeroed out unless they can take enough from the employees. They are non factors, this should be between the employees and the banks at this point.
Be curious to see if anyone steps in here. After seeing Sam Grave Dancer Zell get whacked (although he may still go out ok for non newspaper reasons) who's going to stick their neck out?
All depends on whether they are profitable at all before debt costs. If not, with the outlook as bad as it is, I wouldn't be shocked to see it just shut down like the Post-Intelligencer. If they are still solidly profitable, then we may have to wait for the second bankruptcy filing to see the end of it (it will undoubtedly fail at some point).
Sad to say, I'm not sure how much we'd miss it. As a professional, do you really consider the Strib more authoritative on any topic than the alternative new media site that focuses on that topic. The paper is like News For Dummies.
Front page, national, international are all rehashed. Variety/entertainment is like a watered down Woman's Day magazine. Local news is ok, I guess, but I get better local stuff out of my neighborhood newspaper. The columnists are all leaving. Classifieds are worthless.
I would miss the sports but I can get that many other places.
Waxing nostalgic about newspapers is like old men playing with trains. Why do they do it? Yet when they go on vacation, they take an airplane.
LAMBERT: I can't tell you how often I hear a variation on this from people who obviously consume a lot of information. Your point about expert bloggers from ... banks, labs, universities, etc. ... is an important one, particularly in the way those expert (non-journalists) are an example of the seriously up-graded content/quality every local paper needs.
"News for Dummies" is apt, (its usually worse over on TV news). I won't bore you with the astonishingly silly mini-lectures we heard at the PiPress in the post-Walker Lundy era. "Our readers" were viewed as essentially a combination of cloistered children to be protected from harsh reality and doddering church ladies sure to be offended by stuff available every night on network TV and/or confused-to-annoyance by anything tainted with too much "insider" information.
Anyone hip to anything close to reality knew there was a hell of a lot more going on than they were reading in their morning paper.
Posted by: JB Saunders on January 10, 2009 at 12:40 AM
You mentioned that a consolidation of the Strib and the Pioneer Press was "inevitable, maybe even vital." As much as I agree with you, I just can't see how the owners and/or management of the two papers could ever put their self-interests aside long enough to accomplish such a merger. Do you think preliminary talks have started or is this just another theoretical discussion about how to save the print media's presence in the Twin Cities?
LAMBERT: Frankly, Avista's crowd would need a translator to understand what Dean Singleton would be talking about. And I'm not sure Singleton will survive to lead a merger.
Posted by: cpa1946 on January 10, 2009 at 3:20 PM
Probably a bad idea, but a couple of more thoughts triggered by this grim persona represented as "New Media Guy," who is presumably typing away next to his Kindle version of The Fountainhead, exhibit A of the Let it Burn mentality among the early adopter crowd that helped to get us here.
Listen Newie, if you are going to call a newspaper the "dead tree version" please refer to the replacement news optimistically to be produced within your web only utopia of tomorrow as "coal burning-enabled version." You do realize that your computer is plugged into an outlet, yes?
Second, please ask your boss to treat you as a contractor, working gig by gig. What's good for the goose, right? Third, and sometime soon, maybe when blithely zipping around in your Cooper Mini and yammering into your Bluetooth and spraying slush onto the old media dopes waiting for the bus, think about making that call to Strib circulation that gives you such a chuckle. You is stealing their paper.
LAMBERT: Jesus. Pressed a button, huh? You were responded to New Media's second to last comment. I think his attitude is clearer and more sympathetic in his most recent posting.
Posted by: Paul Scott on January 10, 2009 at 3:52 PM
[Thanks, Paul Scott, for the inspiration on a posting name for Brian's blog.]
Howard Roark is just as inspiring on a Kindle as he is in a cheap paperback.
And, Howard perfectly represents what's going to happen to the good journos in town. If they create what they want, because they think it's the best they can do -- and it's good -- people will come. Several former print guys are doing this, well, now. For a time, their wages will be depressed. Severely. But over time, that will change. Deliver new news written well and you'll survive.
Brian hit on this, inadvertently, with the lectures post-Lundy. Why the papers are failing. Bunch of editors deciding what's good for the people? Bunch of editors who just worked themselves out of jobs.
The Star Tribune goes the way of the Post Intelligencer. Bankruptcy and then death.
By the way, do the Gore math. Cyberspace is more carbon friendly.
Not that Ayn or Howard would give a rip.
LAMBERT: Does E.F. Schumacher have a role in this?
Posted by: AynNewMediaRand on January 10, 2009 at 8:41 PM
I apologize, NMG. It's no fair of me, or anyone for that matter, and surely very lazy, to construct a straw man to take the blame for our staggering societal indifference here at the end of the information era. (Yes, we are at its end, not its beginning. We are about to become highly entertained know-nothings.)
I'm sure New Media Guy is swell, means well, etc, but I just get so tired of the fixation on the business model pathway out of this. Didn't we just learn that all of our enamoration with business models obscured the fact that there apparently no longer existed a sense of stewardship within our banking system? That it was filled with wankers?
The same banking system that inflated the values of all of our mortgages in order to rake in fat commissions, just finished doing the same with a very fragile and vital pillar of our community, and left it in the same shape as those mysterious credit default swaps. People made millions, moved on, and those of us clever enough to take note are left making fun of the newspaper business because it didn't chase its readers online as well as what, Huffington? The new media sweatshop -- starring Alec Baldwin! We will see how many people keep writing for Arianna once the opportunity to see their face on a screen loses its charm.
I happen to think your crusade for a BBC model really makes sense, but is probably politically doomed, at least until the culture experiences something being lost. Then again, I could be just over reacting. Probably because I recently read Hirschorn's dire Times prognistications, and what seemed like the gloating version offered up by Michael Wolf, and really just wish all these smart new media types would try to become part of taking care of something, rather than philosophizing about what AN INTERESTING TIME we are going through.
LAMBERT: I get your pain. And your point about not appreciating what we had until some kind of disaster can be laid at the feet of its absence. But then, the easy comeback is where were these skeptical pros as Bill McGuire lined his pockets and Wall St. built a $62 trillion frappe out of casino bets? Most of the media watchdogs turned Hollywood-style publicists, ogling the bling.VERY bad editing has something -- maybe not everything, but something -- to do with maintaining a position safe within the herd.
Posted by: paul scott on January 11, 2009 at 10:11 AM
Let's stipulate that it's a tough thing for the prospect of hundreds of dedicated employees at the Strib (and probably the SPPP) to be facing a sudden end of their careers.
Let's also stipulate that a local newspaper, well-executed with good reporting, is an important institution for any city.
What we're seeing here, however, is not all that new. Newspapers have been folding and combining for decades. I read a book on the passing of the New York Herald-Tribune. People still pine (fewer these days, naturally) for the Chicago Daily News.
The anomaly is not that newspapers are folding. It's that newspapers enjoyed enviably and unsustainable profit margins for too long. With the fat margins, the papers could afford to relax a bit with their labor contracts. Since most often they were the only game in town for most advertisers, they could dictate their own terms. Even in an economic downturn, their classifieds were reliable generators of cash.
The problem is that the last buyers were duped into thinking that those margins were somehow constitutionally protected. Their financing schemes were all predicated upon margins that no longer exist.
The other major issue that the news organizations cannot seem to solve is that their customers seem thus far to be unwilling to pay for their product. With enough free content out there, that's not a surprise. Only the Wall Street Journal has the muscle to keep most of their content reserved for subscribers.
It's clear that Avista has blundered mightily here. They're systemically stripping the paper of whatever value it once had. They're not alone, however, in retrenching. If McLatchy hadn't sold the Strib, they'd be making some of the same tough calls.
While the newspapers are busy making themselves less relevant, there are sites, such as Bloomberg and others, more specialized to be sure, that are consistently producing more compelling reports than either the Strib or the SPPP.
A paper (print,online, or combo) can perhaps succeed if the expectations for all concerned (ownership, employees, readers)were trimmed.
Is that good news for a Strib employee. Of course not. Is that a realistic assessment of where we're at? I think so.
LAMBERT: I think that's realistic. The major difference between the folding and combining or yore and today is that what MIGHT rise up in the void is going to be of a much smaller scale with far less exposure in the mainstream marketplace. Important news -- generated by anyone -- will richochet around faster than ever, but there is a lot of smallish incremental news that requires the combination of a patient (tough-minded) employer on the reporting end and the mass of something -- like a Bloomberg, if not a 200,000 circulation daily -- substantial enough miscreants can only ignore it only at their peril.
Posted by: maunderings on January 11, 2009 at 3:18 PM
I am a really swell guy, actually. Tried my dad's kindle and it was klunky. Don't have a cell phone. Drive an '83 Chevy Celebrity until heading to another car auction.
I work online. I have a wireless router at home and a always-on laptop on the ottoman shared by the family. I get the Strib and WCCO-TV headlines via RSS. I get weather via 'WeatherBug' on my desktop, play fantasy baseball online and follow local sports via blogs, aggregators and the national sports sites. I manage the flow with a my.yahoo page which I look at dozens of times a day.
I'm enmeshed in new media. The traditional media I get is from MPR on my lengthy commute, and I follow up with online searches for details.
I spent a decade out of college writing, reporting and editing for a local suburban weekly newspaper chain. I get local news and its importance. I'm sympathetic and, believe it or not, am trying to help.
The Hewlett-Packard monitor Lambert mentioned is what the newspaper industry has dreamed about for while. If you've seen the version in "Minority Report" that's the dream of newspaper publishers.
But here's why I harp on the business model. Because, even with a wireless, flexible computer/monitor that can serve as an "e-newspaper" it can also serve as an "e-blogger," "e-tv news," "e-magazine," etc. It's just a delivery vehicle for ones and zeros.
Newspapers now directly compete with all other traditional and new media via ones and zeros. There's tremendous opportunity there, as well as tremendous downfall for those not seeing the opportunity.
Newspapers, TV, radio, magazines, the music industry, networks and on and on who have chosen to "play not to lose" probably will.
Those who play to win will more likely succeed.
Until the owners of the strib come to terms with the new reality, redefine its mission (drop business, entertainment and focus on local news only, say) it will continue a slow death.
For those who think I'm stating the problem, but not offering a solution, here's yet another possibility: Make each journalist a blogger of their beat. Write as news warrants. Minneapolis cops, St. Paul cops, etc.
Give each reporter a unique URL and have that URL contain only that subject on the page. minneapolisschoolnews.com, southsuburbancops.com and so on.
The you "fold up" each of the URLs into startribune.com where editors play the key stories by section as they want on the front. There is a way to do this and keep search-engine optimization on track. You offer targeted niche audiences by local keyword.
Take the "whole" and break it down into the sum of its parts and treat each "part" as a whole of its own.
LAMBERT: I buy most of that. And I've often said that the Strib needs to think of itself as a TV station ... with a lot more resources ... if that helps. There's a myth that news consumers only want great looking people reading bite-sized news at them. I don't buy that. The Strib is (or was) full of people that could become interesting characters (always a factor in public appeal) with a little exposure and encouragement to relax and tell the story of what they know, what questions they'd like to ask, or see someone ask.
Mainly though I'm worried about that '83 Celebrity. Dude, you need fresher wheels.
Posted by: new media guy on January 12, 2009 at 2:02 PM
The Society of Professional Journalists" has been revealed as a cynical and exclusionary liberal club that has poisoned the mainstream media "value proposition".
You have met the enemy and he is you.
Now, can you write something about my guy Mickey Rourke?
LAMBERT: Were you and Mickey in rehab together?
Posted by: bertram jr. on January 12, 2009 at 5:27 PM
My God. Do many of these people know what it takes to cover serious news every day in a major metro area? Or a state? Or how about a nation. Or a World.
In the Twin Cities, or Minnesota, it takes a village. Like a big newsroom. Perferably, several of them. With a bunch of really knowledgeable people who can trade info and thoughts from different realms of knowledge and experience. And I'm not talking 40 or 50 people. I'm talking 300-400.
Not some geek world that's self-contained with only My Ideas. The kind of ego-centered postings I see here sometimes seem totally oblivious to that fact.
You think objective reporting is easy? Far from it.
You think running a story thru three or four levels of hard-ass, tough-nosed, highly knowledgable editors is easy?
That's what a good newspaper gives you.
That's what we are losing. I defy anyone to say there's an alternative out there that has that level of knowledge, credibility and insight.
The fact that the economics are not working out for big newspapers does not mean that we are not going to lose something hugely important if they go down and there is no equal alternative.
All I see on the horizon is bluster and vanity and agendas. And no honest brokers. And little concern for the larger society.
LAMBERT: Obviously I have a major stake in bluster, vanity and agenda. But your point about the size of this entity is one that needs further examination and reinforcement. I interested/fascinated by the point where size equals access.
At some point the size of the entity behind you -- where the Strib was once very much the equal of most other major local business entities -- made them too big to ignore. I will argue that MinnPost -- the only "honest broker" of any size -- has several quantum leaps to make before the influential feel they must take its call.
Posted by: Paul Gustafson on January 13, 2009 at 12:34 AM
I agree with Paul's sentiment. I understand what's at stake. I understand the value of the major metro newsroom. I understand the importance of an honest broker/watchdog for a community.
I get it.
Apparently we're in the minority or newspapers would be thriving, right?
Hold on ... a check of the numbers at snapshot.com shows that the strib has gained 600,000 unique visitors a month in the last year, reaching 1.6mm visitors in December. A 57% year-to-year increase.
The SPPP site -- twincities.com -- had 600,000 visitors in Dec. '08, up 138% from the year before.
People are reading what the metro newsroom produces ... just go look at the "most popular" stories at anytime on the front pages of the sites.
Combine that with this: "... the Internet has now surpassed all media except television as a news source, according to ... the Pew Research Center for the People and the Press.
"For young people, however, the Internet now rivals TV as a news source. Nearly six out of 10 Americans younger than 30 said they got most of their national and international news online ..."
Let's keep digging ...
wcco.com had fewer visitors than the SPPP and grew only 13% in that time frame.
kare11.com did marginally better than wcco.com by growing 20% but ended the year with about the same number of visitors. That's still below SPPP.
mpr.org's visitor numbers are anemic by comparison.
The story? Folks -- particularly the desired younger folks -- are moving online for local news. They are going to newspapers more then tv.
That's why it's the business model. The readers are there. The community is still there. They still read the stuff. You just need to keep the local newsroom viable.
How? Monetize the online audience and start lopping off functions that aren't core to the mission. Which is closer to the core mission: Keep putting a printed version on driveways every day or delivering metro/state news to the community?
LAMBERT: You still need the seamless, inseparable web page adjacency of editorial and advertising for business to embrace it. I like the Hewlett-Packard e-paper scroll for that. Expandable to a broadsheet. Full color photo and video. Glossy advertising. Few want "another device". But this thing wouldn't have to leave home. Still, it's another computer.
Posted by: new media guy on January 13, 2009 at 12:45 PM
Paul Gustafson writes: "You think objective reporting is easy? Far from it. ... That's what a good newspaper gives you. ... That's what we are losing."
Nope. Wrong. That is what we already have lost.
I'm not trying to enflame the left-leaning journos and city dwellers who think that their agendas are centrist and their news coverage and news budgets are objective. I'm not trying to win fans among the wing nuts. I just know that objectivity got wrung from many newspapers' constitutions a long time ago, either intentionally or through neglect. And the readership got wise to that.
People might be more open to the loss of society's watchdogs if there hadn't been a growing sense that those dogs play favorites in whom they bark and snarl at and whom they don't.
Long before technology and demographics and cultural shifts and now the economy at large threatened newspapers' survival, the politics that bled from the op-ed pages into reporting and story targeting damaged them. Made them more expendable for large segments of their audience.
LAMBERT: You won't be surprised when I say that I disagree -- somewhat -- with the insinuation that mainstream papers have gone too far "left". Here in blog world you're always considering the source, but from my elitist perch the mainstream press has been most guilty of applying "balance" when the issues at hand screamed out for dramatic, emphatic finger-pointing, whether over the run-up to Iraq, warrantless wiretaps, the on-going health care disaster, etc. and etc. Yes, the average newsroom reporter has very little affinity with the average talk radio listener. But the reasons for that have more to do with first-hand exposure to reality than any personal "bias". Personally, my admiration for courageous reporting has taken a brutal dive in the past decade, mainly as large group ownership put a tighter -- and less plausible -- definition on "fairness" and "balance" in hopes of not irritating a portion of their precarious advertising base.
Posted by: Craig Plumfagen on January 14, 2009 at 9:00 AM
Just a quick comment to second Craig's comment, and your response.
There might have been a time, locally, nationally, maybe between 1974-1978, when journalism was balanced...and there might have been a longer time when it actually from top to bottom attempted to be so.
But let's admit that it hasn't been so in the last 10 years. Left, right, the elites, the masses...people act like these labels were created by Gingrich.
All media, all columnists, for all time--put bias into their reporting...it is unavoidable and only so much can be edited around.
And maybe that is too much to ask of one person or even one organization to serve all these masters. That is why I'll take my chances on the internet, where I can assemble my own listing of websites and bloggers who prove to be the right balance of honesty for my tastes.
As for the future of journalism locally--I will continue to maintain (1) it has never been brighter and (2) the future is now.
Blah blah raincheck, whenever you are serious about proceeding beyond these threads and want to build a finished garment.
LAMBERT: The garment is Gore-Tex coated and impervious to bio-hazards, I hope. My view on the "objectivity" question is generally that big city newspapers should be, you know, BIG enough and sufficiently well-staffed that they actually look a bit like the town around them. Columnists SHOULD have opinions. That's why they're columnists. They are there to spark conversation. Straight news and investigations obviously not so much. But if you have people who are just born bright enough to check their own impulses, (rare), or have been around long enough that they've experienced the downside to stretching the facts farther than reality can bear, you're in a better place. My quarrel over the years has been with the blandifying effect on the overall product when you pull personal point of view out of everything, including the people the public expects opinion from.
Posted by: The Other Mike on January 14, 2009 at 4:56 PM
Well, I appreciate that some people like Craig think that major newspapers are liberal rags.
But I covered crime and courts for 17 years at the Strib, and I never got accused of being "soft on crime" by any cops or prosecutors or judges.
And I tell you that I knew reporters and editors who came from all stripes on the political spectrum. Including more than a few folks who were staunch gun-owning and gun-rights people.
But, you know what? We all may have disagreed with Strib editorials from time to time. But we all knew that in the newsroom you checked your personal political ideology at the door. We were there to give people the news as accurately and objectively as we could.
To tar the Strib's demise as a failure of a left-leaning operation is just not true. It has to do with economics and the internet, and a failure to come to terms with that.
Newspapers lived off advertising and didn't try to put a price on the invaluable information they provide. That worked for a long time. But that model is now dead. And our society will pay a big price for it. And so will a lot of highly-skilled journalists whose only "agenda" was to provide unbiased information that is essential to a democratic society.
What say you to that, Craig?
LAMBERT: The cliched "bias" critique of the right is that "liberalism" is in the DNA of anyone who wants to get into journalism. If it wasn't they'd go into something respectable and of actual value to society at large, like investment banking. For the most part this is just shallow echo chamber cant -- but pervasive, none the less. What they miss is the hit your reputation -- in and out of the newsroom -- takes if you screw something up. Getting it right is the most important facet of the job. Getting it right means letting the chips fall where they may.
Posted by: Paul Gustafson on January 14, 2009 at 10:03 PM
What say I? Same as I said in my earlier comment.
Just because a former Star Tribune reporter says that he and his colleagues always attempted to provide balanced and unbiased coverage doesn't make it so. Among many business people in this community, who happen to be parents and activists and students and artists too, the "Red Star Tribune" jokes weren't made out of whole cloth. As I tried to make clear, it's not just bald-faced opinion leaking into a news story -- it's a bias way back in the process in terms of stories pursued, stories ignored, which squeaky wheels get greased and which ones get slimed.
I don't think people are being honest when they deny that journalism pre-selects more liberal practitioners -- somebody, after all, appoints themselves to "comfort the afflicted and afflict the comfortable." That, on its face, is contrary to a conservative outlook.
Look at the various surveys as the November election approached regarding voting patterns of newsroom people. Look at the pursuits, if not careers, that they head into after the many layoffs and buyouts. If your political breakdown within a newsroom is 100 lefties and 10 righties all trying to be "neutral," it seems pretty clear that any tilt is going to be to the port side.
I'm not saying that left is, in and of itself, bad. An equal tilt right, over time, would have disqualified the Star Tribune from its same avowed mission in the community. And dampened the impact when it began to flail and slip away, as it is now. Why, the cheering and applause might have been far lustier, dying from that direction.
What I maintain is that the Star Tribune didn't serve its most valuable role -- watchdog over all, in equal measure, while remembering who its core readership is -- well enough. It still might be dying but there might be more people trying to help, or at least troubled by it.
I'll add this, because I fully expected Paul Gustafson to go "there": One of the biggest lies I ever hear from editors maintaining their fairness is the notion that they get equal amounts of mail from people on both sides, right and left, expressing outrage. That way, they boast, they know they're doing their jobs right. To that I say: Easy to claim, isn't it? Just once I would love to see an accounting of the feedback, with something approaching our recount precision. Running two "nay, Strib" letters with three "yea, Strib" letters isn't convincing at all. So we start from that dishonesty and work downward...
LAMBERT: You make a better argument than the trolls on talk radio, and there is no question that there is a pro-ethnic tolerance, pro-feminist, pro-choice "bias" in the average newsroom. But last time I checked, at least two of those are covered in the Bill of Rights and the third still has a Supreme Court decision upholding it. My usual retort to a "liberal bias", or an "anti-conservative/anti-business bias" is if any of that is true how do you explain the stunning lack of skeptical investigation into Bill McGuire, Enron and now the entire derivatives-charged Wall St. meltdown? The supposedly "anti-business" liberal reporters were mostly writing full-fellatio hagiographies of the gilded age tycoons of these industries, and not in any measure "afflicting the comfortable". Obviously the question is better directed to the editorial decisions that preferred the friendlier, "bias-free" style of coverage. And let's not even talk about Iraq.
Posted by: Craig Plumfagen on January 15, 2009 at 1:14 PM
The question of whether or not there is an ingrained bias in the Strib has little to do with anything. As I've stated before, if you have a problem with the Strib's tilt, start your own newspaper.
Now, to Mr. Gustafson's point that, "It has to do with economics and the internet, and a failure to come to terms with that", I think it oversimplifies and obscures what ails. The Strib has a monopoly on the news (and advertising) business for far too long. As a result of this monopoly, I think that they treated their readers (and advertisers) with contempt. As long as they continued to earn monopoly profits, everything was fine. However, with a monopoly, complacency sets in. Now, with no monopoly pricing power, unsustainable debt and a serious recession, the wheels have come off.
Leaving aside the issues of people losing their jobs (hardly a throwaway), the hand-wringing over the "loss of professional journalism" is getting a bit overwrought. The overweening arrogance and sense of one's own importance is palpable in many of these laments.
It goes without saying that a free press is essential to our democracy. That doesn't mean, however, that we as a society are compelled to pay for a newspaper that doesn't deliver what we need/want. The waxing rhapsodic over the glories of investigative journalism would be more salient if we actually saw compelling investigative journalism. All too often, however, what we see is thin gruel of press conference reportage.
Bill McGuire and United Health has been a convenient target for you, Brian, but the story of the backdated options wasn't broken by an intrepid reporter from the paper. If memory serves, it was some obscure professor in Iowa who uncovered this. The Strib has failed to deliver.
While I'm at it, is there anyone else who is at mildly disappointed in MinnPost? Other than Brauer reporting on the Strib itself, there's very little reportage that takes place. What I see is more chin-stroking "analysis". That hardly seems to be the answer. If it is, the wrong question is being asked.
Since they're still trying to figure out what they want to do, that's one thing. Very rarely, however, do I actually learn anything from reading Minnpost.
Why haven't either the Strib or the SPPP gone tabloid? Go downmarket in search of an audience. I can't see the grim, sober-minded custodians of the Strib going in that direction, but why not Singleton? Desperate times call for desperate measures. Could it find an audience? It would certainly add some color in a market bathed in gray.
LAMBERT: I agree completely about investigative journalism. I mention it as often as I do because its such a prime example of what is not "monetizable". It's expensive. It pulls resources away from much easier, filler stories. And no the Strib DID NOT break that story. But that isn't to say it might not were it under classic newspaper management. (Wishful speculation, I concede.)
On MinnPost. I believe Brauer, who has done a terrific reporting job, has a significantly different remuneration arrangement with MinnPost than most of the other writers. Point being, you're not going to invest a lot of your time chasing news around town for what you'd earn working the lunch shift at Caribou. That's a stark example of another dilemma for what's coming next in news gathering.
On the "tabloid" business ... the PiPress, circa Par Ridder, had this out as an option. In essence it was -- "We need to do something different to differentiate us from the Strib". Ridder, with a team of sycophants, took it in the opposite direction, i.e, "We'll be what the Strib is, only with less people, pages and in fewer zip codes."
Posted by: maunderings on January 19, 2009 at 10:44 AM