Hard To Believe Just A Couple Of Years Ago Dean Singleton Said Newspaper Financial Woes Were Just 'Cyclical' Now He Says Newspapers Need A New Print Model

Philip M. Stone June 3, 2008

“Lean Dean” Singleton has switched from his theory a couple of years back that US newspaper financial woes were cyclical and everything would get back to normal once the economy picked up. No longer, his theme these days is “Newspapers are not a dying business; they are a changing business,” and he told media executives Monday at an international media meeting that it is time to move to a print model that matches the times.

Singleton says the big problem is that newspaper people don’t want to change. “They fondly remember the past as if it will suddenly reappear.” But he says now the old times are not going to return and employees just have to get used to it. And that means less people walking newspaper corridors.

He didn’t say, however, whether he agreed with Frank Bennack Jr., immediate past president of Hearst for some 23 years and now board vice chairman, who told a California audience in March that publishers should give up on the old days of earning 35% profit margins and now they should be willing to be happy with 15-20% margins.

Singleton is undertaking a study, with consultants, of how a newspaper company should be today, if it was formed today. “We expect our business to look a lot different next year,” he told media executives at the World Association of Newspapers annual Congress being held in Gothenburg, Sweden.

But even though the newspaper industry seems to be diverting much of its resources to the Web Singleton believes, as do a few others, that the core print newspaper needs to remain strong because it is from that core that everything else  benefits. “The core must stay strong while we develop our future, because the core will finance the future.”

That gels with what Lee Abrams, Tribune’s new head of innovation, told staff recently, “Make the newspaper the centerpiece of everything you are doing, including the digital businesses. The better the paper is and does, the stronger all of the other brands will be! Creating new brands to reach nontraditional print demos is good...but the stronger and more potent the core paper is – the better everything will be. Sorta (Sort of) like Diet Coke wouldn't have a prayer if Coke wasn’t a powerhouse.... sorta. I do see a lot of ‘whoa great idea... too bad we can't try it on our core brand’ Why???!!! Is it ‘assuming’ that traditional readers won't like it?”

Obviously Abrams is also fighting the resistance to change, too.

Singleton says it is all about losing arrogance, and forgetting old ideas. “Old newspaper models are destined to die,” he said. “If we fail, democracy fails, failure is not an option. The future might be scary, but it also exciting.”

“Scary” is the word many of his employees are using these days as cost cutting, led by layoffs, is the name of the game at many of his newspapers.

His basic theme for more than a year now, which he repeated Monday to the media executives is, “Once and for all, we’re going to have to quit writing and editing for each other and write and edit for that consumer out there.”

He sees the biggest problem facing newspapers today is how to make money off content that they now put on the Internet for free. “We have to get paid for it,” he said. “We either have to come together as an industry or partner with Google or Yahoo or whomever. If we don’t get paid for it, we aren’t going to be able to produce it,” is his standard speech. He has partnered with Yahoo “hot jobs” and Yahoo is set to become his primary search provider on all his newspaper Web sites.

Singleton’s MediaNews owns more than 50 newspapers. He is nicknamed “Lean Dean” for his reputation of running very tight ships – he has not been shy in closing down properties that don’t perform (Dallas Times-Herald sold to competitor Belo [Dallas Morning News] that closed it down the next day, and the Houston Post).

A few days after buying the San Jose Mercury News in 2006 from McClatchy he visited the newsroom and he told staff there would be no layoffs, pay cuts or reductions in health benefits. A few days later, in a visit to the St. Paul Pioneer Press, also bought from McClatchy, he answered staff questions that specifically delved into his business philosophy -- important in St. Paul since the newspaper had only about a 10% profit margin – well below the industry’s average 20%. 

"Margin is something that our company has never paid attention to, because you don't pay your bills with margin, you pay them with dollars. And as long as we can create a growing business with a growing profit, the margin is not really that important," Singleton told staff who said they were relieved by his response.

But just to make sure there was no misunderstanding -- "We make sure our newspapers live within their means. And we make sure they're viable businesses. And sometimes that means that you've got to be very efficient. “I'm not ashamed of that," he warned.

And since then the staff in San Jose and St. Paul have learned exactly what that meant – loads of layoffs.

But Singleton figures that 19 top US papers are losing money so like it or not, things cannot continue as they were. It’s time for a big change.