Road Signs: May 2008

Wooden Horse News (mweaverATwoodenhorsepub.com) reports: A partnership of three Canadian magazine organizations – the Canadian Society of Magazine Editors, Magazines Canada and the Professional Writers Association of Canada – have commissioned research into the state of the industry. 

The survey states that “The Canadian magazine industry does not have a set of standards for what’s expected in the relationship between publications, their staffs and the freelance community.  This includes such things as salaries and fees, contracts and the management of creative rights as well as the various kinds of relationships among staff, management and freelancers.”

With the New York Times joining scores of newspapers forced to reduce their staff and top executives voluntarily leaving the Los Angeles Times, two pieces seen recently online are pertinent.  The first is Advertising Age writer Nat Ives’ interview with David Hiller, publisher and CEO of the LA Times.  Asked if the papers new niche products will recapture the revenue that’s seeping from the core product?  Hiller responded, “Will it be, quote, as we’ve known it?” “Absolutely not.”  “Can online-ad rates ever match the paper’s print rates? “No way,” he said.  “Never.” 

An unnamed former Times executive was quoted: “I definitely don’t think, if all you’re trying to do is respond to revenue decline by cutting, that you’ll find your way out of this.”

Which brings up Alan Mutter’s Blog on JRC. (Journal-Registry Company) Reflections of a Newosaur April 13.  Mutter was formerly with the Windy City’s Daily News and Sun-Times and then the San Francisco Chronicle before becoming a successful Silicon Valley CEO.  He describes how the news company’s strategy of aggregating neighboring newspapers into ever larger clusters and thereby sell advertising more efficiently while lowering production costs failed. 

The company owns 22 daily newspapers and more than 300 non-daily publications.  RC’s share price dropped 99 percent from 2004 to 2008, $21.84 to $0.63.  This despite aggressively reducing expenses: thinner newsprint, cutting staff, salaries and benefits; demanding odometer checks before reimbursing journalists for driving to their assignments and completely filled reporter’s notebook before providing a new one. 

It did produce a $6.3 million 2007 salary for chief executive Robert Jelenic who was vilified by ex JRC employees commenting on Mutter’s financial analysis of JRC.  “His strategy of stripping the life out of dozens of community papers has left the company almost completely without sellable resources in this dark hour.  And his personal vulgarity and brutality will live on whenever former JRC minions gather to recount the worst days of their working lives,” said one. 

Another, “Those high margins and tight newsroom budgets came at a cost – readers”  Or, “The idea that expenses were reduced in these newspapers is just a myth.  The decline in circulation which is a hallmark of most JRC newspapers tell a different story”  And, “Slashing and burning content and circulation in the name of profits is not building value and is not sustainable.  We’re seeing just about every newspaper company make the same mistakes now — cutting instead of investing.  Newspapers need to reinvent themselves on the web and you can’t do that with 20% less staff than you had last year.”

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