The Ultimate Cost Saving: Quit Publishing

Philip M. Stone September 25, 2008

Newspapers have been announcing more and more cutbacks to their publication days with no end in sight to spiraling costs and decreased revenues, so it was just a matter of time before a big newspaper would announce the ultimate step and tell unions that unless there were major concessions the newspaper was either going to be sold or it would go out of business.

And that’s what the Newhouse-owned Newark Star-Ledger and Trenton Times told employees. One union agreed to a new contract that management said it could accept but the Drivers Union – they’re the ones  who deliver the newspaper from the plant to the carriers – haven’t signed on yet and management says if they don’t then the repercussions couldn’t be more serious.

“We do not bluff or lie,” multi-billionaire ($8 billion) owner Donald Newhouse told the New York Observer. Newhouse,  36th on Forbes Magazine’s list of the 400 richest Americans,  says if there is no deal by October the newspapers go up for sale and if there is no buyer by the end of the year  then they close in early January. The two papers are thought to each be losing around $30 million to $40 million this year (that’s going to make a tough sale!) and JP Morgan Chase has already been retained to make the sale if it comes to that.

It’s not that the Drivers don’t have a perfectly valid Agreement already with management; rather management says it can’t live with that Agreement any longer and if it isn’t changed then the dire happenings.

“The fact is we have a contract with the drivers presently, but under the conditions as they exist today, we cannot continue publishing The Ledger,” Newhouse said. “We’re seeking a modification of that and we’re hoping the drivers’ membership agrees.”

So with that ultimate cost savings in the wind, it’s time to take our semi-regular look at what else newspapers are doing these days, besides firing people, to stay in business. What is going on out there is well summed up by Scott Flanders,  chief executive of Freedom Communications which publishes the Orange County Register in California (south of Los Angeles, north of San Diego and very high per capita income, but its main newspaper is suffering just like those elsewhere).

“We are having a lot of conversations that in the past in a different environment would have been inconceivable.” Flanders said. Some of those conversations, apparently, have been with its bitter rival to the north, The Los Angeles Times, about combining certain operations such as printing, distribution, and mailroom in a cost sharing deal. The Times (Tribune) will probably be receptive since it needs all the new revenue and/or cost savings it can make to help payoff Tribune’s debt.

“The overall realities of our current economy” are blamed by a Nevada publisher for reducing Tuesday through Sunday circulation for the Lahontan Valley News and Fallon Eagle Standard down to just Wednesday, Friday, and Sunday. Publisher Kevan Todd says the web site will be updated daily.

The San Francisco Chronicle has taken its life in its hands by cutting back its Sunday comics. Every newspaper editor in America knows that you can mess with editorial as much as you like and there won’t be too many complaints, but don’t mess with the comics!

Now, the Chronicle did do it in a smart way, polling readers before any moves were made and getting some 13,000 comments beforehand.  As David Wiegand, executive Datebook editor, wrote in a story describing the changes, “We know that readers feel strongly about comics. That’s why we’re making these decisions in concert with you.” But the end result is that the Sunday comics pages are reduced from six pages to four “because of economic necessities.”

In Ft. Worth, the Star-Telegram (McClatchy) has sold its four-story annex building and three parking lots and now is considering one further sale -- its historic downtown office building.

And at the News & Observer (McClatchy) in Charlotte, North Carolina, two senior editors – the cartoonist and the public editor -- have agreed to work part-time. “I regret the loss of a full-time job,” said public editor Ted Vaden “but I’m pleased that the N&O has seen fit to have a public editor.”

And let’s not forget that the new Chicago Tribune hits the streets on Monday. The number of sections will drop from five to three and larger graphics means less room fort text, especially since there will be about 40 pages a week less than the current Trib.

All of this, unfortunately, a sign of the times.