Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.
--Thomas Jefferson
Happy Fourth of July. Fitz & Jen return Monday.
Fitz: Caught up in all the excitement of Canada Day, we let this one almost get away: Canwest Media has been given yet more time to figure out a recapitalization transaction.
A month ago, loyal Fitz & Jen readers will recall, Moody’s Investors Service suggested that bankers must be getting a little annoyed at Canwest’s repeated delays in recapitalizing debt that now amounts to $4 billion, most of it taken on to buy the old Southam chain of newspapers. And Moody’s thought noteholders were likely irked by Canwest’s decision to skip a C$10 million (US$9.17 million) principal and interest payment that came due in May.
But the ad hoc committee of lenders and noteholders apparently has plenty of patience left. They’re giving Canwest -- publisher of Canada’s largest chain of English-language dailies – an extension to July 17 to get a deal in principle, and to July 31 for enter a definitive deal. O Canwest, we’ll stand on guard for (more word from) thee.
Rob Curley, fresh off triumphs in hyper-local at The Washington Post and Lawrence (Kan.) Journal-World explains how he feels “like I’ve died and gone to journalism heaven” at the Las Vegas Sun, where you just “can’t get enough hooker knife-fight stories” for his 702.TV.
Happy Independence Day, America! Try not to feel bad that the newspapers in your old colonizer, Europe, are doing a lot better than yours.
Rupert Murdoch talks with TheStreet.com about buying The New York Times (never happen), shaking out some payment from aggregators (better happen), monetizing Twitter (can’t see how that’ll happen) and his mistakes with MySpace (stuff happens).
Bloomberg News hires a clutch of Pulitzer Prize-winning biz journalists, including Daniel Hertzberg who just retired from The Wall Street Journal, notes Talking Biz News.
Fitz: Ever heard of Debtwire? Neither had we. It publishes newsletters with subscription prices that we can only guess are pretty high. Let’s put it this way, they don’t list the prices on their Web site.
So we wouldn’t have known anything of Debtwire’s blockbuster report last week that Dean Singleton’s (left) MediaNews Group was assembling a pre-packaged bankruptcy giving its bankers effective control of the nation’s third-largest newspaper publisher. Wouldn’t have known, that is, if Westword media writer Michael Roberts on Wednesday hadn’t let the rest of the world know what Debtwire was saying about MediaNews.
MediaNews rushed out a statement Wednesday evening stoutly denying the story, which it called “inaccurate in almost all respects.” There’s no bankruptcy in the works, no change in control contemplated, the company said from its Denver HQ.
MediaNews did acknowledge being “in discussions with its bank lenders to restructure its balance sheet, including an exchange of some of its bank debt for equity in the company.”
The whole story is over at E&P’s Web site. The MediaNews statement is below the fold.
Fitz: In the first market reaction to Lee Enterprises’s (NYSE: LEE) decision not to bulk up its share price with a reverse stock split, The Street bid LEE up furiously Wednesday.
LEE closed up 34%, gaining 18 cents to 71 cents. The volume of nearly 1.91 million shares, much of it in big blocs of 60,000 to 80,000 shares, was about triple the normal turnover.
LEE was by far the biggest percentage gainer among newspaper stocks traded on the Big Board. The McClatchy Co. (NYSE: MNI), which seems to move in tandem with LEE, was up 3 cents, or 6%, to 53 cents or light trading. Journal Communications (NYSE: JRN) jumped 11.4% on no particular news, gaining 12 cents to $1.17.
Gannett Co. (NYSE: GCI) on Wednesday at last confirmed the widening reports of a mass layoff planned for the week of July 9. GCI ticked up 9 cents, or 2.5%, to $3.66.
Fitz: The correct guess for the number of publishing division employees getting the axe from Gannett Co. is 1,400, Bob Dickey, Gannett U.S. Community Publishing president, confirms in a memo sent around the chain Wednesday afternoon.
July 9, tipped by departing Gannett Blog crowd-sourcer Jim Hopkins, turned out to be the correct Doomsday, even if Hopkins’ source guessed way high (4,500) on the layoff number.
Here’s Dickey on the logistics of the tumbrel rides. The full memo is below the fold and on E&P’s Web site.
Continue reading "Gannett’s Bottom Line: 1,400 Newspaper Employees Going Away" »
Fitz: Funny and subtle viral commercial for the South China Morning Post, employing the old Abbott and Costello routine. (Hat tip to INMA)
Fitz: One of the enduring themes as the newspaper industry economic crisis deepened has been that small paper have been singularly successful in riding out these headwinds. But an Inland Press Association study out Wednesday suggests that may be an enduring ... myth.
Inland’s Five-Year Trend Analysis looks at data from its well-respected Cost and Revenue Study over the period from 2004 through 2008. It finds that operating profit actually fell the steepest in that supposedly sweet-spot circ group of 25,001 to 50,000. Profits plunged a sickening 190.4%, Inland said.
Operating profits were down in every group, even the under-15,000 category -- the only one to actually average an increase in revenue. In that smallest group, profits fell 64.8%.
Other results:
15,001-25,000: down 50.2%.
50,001-80,000: down 82.9%
80,000 and over: down 100.1%
For the complete report, “2004-2008 Trend Analysis: From the National Cost & Revenue Study for Daily Newspapers,” contact Tim Mather at (847) 795-0380.
Jen: Last night I attended a discussion about the future of the newsroom hosted by Reuters and the Society of American Business Editors and Writers. The panel was made up of old and new media peeps alike: Chrystia Freeland, the U.S. managing editor of the FT, Lawrence Ingrassia, business and financial editor at the NYT, Sree Sreenivasan, professor and dean of student affairs at Columbia Journalism School, and Laurel Touby, founder and svp, mediabistro.com.
This being the week of ALL THINGS MICHAEL JACKSON, there was much discussion about the role technology plays in disseminating news and how it's a threat to traditional news organizations. i.e. TMZ breaking Jackson's death and how a gazillion people twittered it.
Freeland (pictured) made one of the best points on the panel about technology and old school media. Essentially she says that it's completely wrong-headed to describe newsrooms -- such as the ones at newspapers -- as a breeding ground for technophobes. That's just nonsense, she says.
She's right. How many journos do you know that Twitter, keep a Facebook account, blog, etc.? Just about everyone. Freeland said it's time to dispel that notion and instead start thinking about how to make these technology tools work in your favor: "Who is going to pay as a consumer and who is going to pay as an advertiser ... We need to focus much more on how to figure out what we are using these tools for."
The Boston Globe guild cares. It sent out a "six-page survival guide to navigating financial hardships" like subsidized fuel. (Boston Business Journal)
A.H. Belo invests $2 million in online real estate broker Sawbuck Realty. (MarketWatch)
Bankruptcy could be just want the industry needs. (Nieman Journalism Lab) Meanwhile, the banks could be your new newsroom boss. (The Biz Blog)
Ken Doctor has two words for you: video and mobile. (Content Bridges)
WSJ asks, how much will you pay for an app? (Paid Content)
Fitz: Had Lee Enterprises (NYSE: LEE) gone ahead Tuesday on its last chance for a reverse stock split, LEE could have had the second highest-priced shares in the newspaper sector, excluding the $300-plus share price of The Washington Post Co. (NYSE: WPO). At a ten-into-one split, LEE could have closed at $5.30, just behind of The New York Times Co. (NYSE: NYT), which closed at $5.51 and way ahead of Gannett Co. (NYSE: GCI), which ended at $3.57.
Instead, the board of directors let the shareholder authorization for a reverse stock split quietly expire. Because of the financial meltdown, the New York Stock Exchange has temporarily lifted its continuous listing standard of $1 a share. With its previous warning of non-compliance from NYSE Regulation Inc., Lee has until next Dec. 3 to figure out how to lift LEE from penny stock territory.
The reverse stock split always had a fatal flaw for Lee because while it lifts share price, it doesn’t do anything for market capitalization -- and Lee was in danger of falling out of compliance for that minimum standard as well.
With its Tuesday closing at 53 cents, LEE had an indicated market cap of $23.8 million, short of the $25 million minimum the Big Board had enforced until recently.
In a statement, Lee Chairman and CEO Mary Junck suggested investors will come around to seeing the worth of LEE again:
Fitz: For newspaper sector stocks, the second quarter of 2009 closed Tuesday with a familiar whimper and no evidence that for brief periods in the past three months they had actually staged something of a rally.
Volumes were low, and declines were modest. And, yes, they were mostly declines. Widely held Gannett Co. (NYSE: GCI) paced losers with a 19-cent, or 5.1%, dip to $3.57 as its prospects of being a stock worth more than $5 a share seem to dim with every session.
The McClatchy Co. (NYSE: MNI) was in the news Tuesday, first with a downgrade from the credit rater Standard & Poor’s Ratings Services and then with its own announcement that the buyer for its plot of land adjacent to The Miami Herald exercised its option to extend the closing deadline out to the end of the year.
MNI closed unchanged at 50 cents on very low volume.
A Motley Fool stock picker had nice things to say about The Washington Post Co. (NYSE: WPO) Tuesday. The nicest, in her view, being that the Post Co. really isn’t that much a newspaper company, so it’s not that big a danger to an investor.
WPO was up $3.42, or not quite 1%, on session to $352.18.
The New York Times Co. (NYSE: NYT) disclosed in an SEC filing that its 401(k) retirement plan lost a ton of money on the market last year, led by the swoon of the Vanguard 500 mutual fund. NYT’s swoon was more modest Tuesday, with shares closing at $5.51, on a 5-cent, or 0.9%, dip.
Fitz: Around the Fitz household these days, we have a strict policy of filing away the periodic reports from our 401(k) retirement plans without ever opening the envelopes -- lest the little lady and I spend more sleepless nights imagining ourselves as that cute couple of senior citizens living in a van down by the river.
The New York Times Co. doesn’t have that luxury. It not only must look at the results of its 401(k), it has to file them with the SEC so we can all have a look-see.
After markets closed Monday, the Times Co. reported the grim results. Net assets slipped to $417.7 million in ’08 from $589.6 at the end of 2007. Just one of its mutual funds made money during the year. Like many of us who put their faith in index funds, the Times Co. got bit hardest by the good ole Vanguard 500, which plunged to $60.8 million in 2008 from $101.2 million. (There’s more on the Times Co. plan at E&P’s Web site.)
Jen: Lest you think you own the local online market, newspapers, keep an eye over your shoulder. Local TV is creeping up on you. Borrell Associates has been sounding this alarm for the past couple of years and now a new analysis from an outfit called Internet Broadcasting shows that in some markets, the Web site of the local TV station beats the newspaper site, three to one.
The inaugural "IB Local Index" provides a monthly analysis of comScore data for TV station Web sites and their competitors in the top 50 local markets. For the month of April, IB notes that KSL.com in Salt Lake City has a little more than 3 times the audience than SLTrib.com, the Web site of The Salt Lake Tribune.
In Raleigh-Durham, N.C., the local ABC affiliate WRAL.com beats the NewsandObserver.com three times over too.
IB notes though that while overall local TV Web sites are growing its reach, newspaper Web sites are still top dog. "TV station Web sites in the top 50 local markets reached 7.2% of the total local online population in April 2009, up from 7% in March and 6.3% in April 2008, but still only half of the average reach of top local newspaper sites," write Tom Materman and Arul Sundaram.
UPDATE: Sundaram writes in the comments section that is worth bringing up here: IB looks at in-market Web usage which is much more relevant to a local advertiser, not total usage.
Fitz: More proof that newspapers are really suffering far more from this Great Recession than from “secular challenges” of digital, etc.: The McClatchy Co. announced Tuesday that the prospective buyer of 10 acres of prime real estate adjacent to its Miami Herald office has exercised its option to extend the closing from today to sometime on or before Dec. 31.
When you can’t sell property located right on Biscayne Bay, next to the American Airlines Arena and a short walk from the Bayfront mall, the reason is the economy. Not the Internet.
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A breezy, business-oriented blog on the ups and downs of the newspaper industry by E&P's Editor-at-Large Mark Fitzgerald (in Chicago) and Associate Editor Jennifer Saba (in New York). Between them, they have won seven Jesse H. Neal Awards, the top prize for the business press, in the past six years.
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