Category: Big Business

A few days ago, Sam Zell’s Tribune Group announced cutback plans at its newspapers. The announcement sparked an uproar because it mentioned the number of pages produced annually by reporters at different papers. The idea was to contrast how writers at some papers — the Baltimore Sun and the Hartford Courant — each averaged 300+ pages a year, while those at the LA Times produced an average of only 51 pages a year. The Tribune’s goal is to reach the magical 50-50 advertising/editorial ratio (which I always manage to miss in my own magazine, coming closer to a 43/57 split. Seriously. I keep track of this stuff).

The rationale as I understand it is that most newspapers are wasting their time and money on national and international news, given that most readers get that sort of news from the internet. Instead, the Trib plans to focus on local news. According to that NYTimes’ writeup:

In his note to employees, Mr. Zell wrote that Tribune papers would be redesigned, beginning with The Orlando Sentinel, on June 22. Surveys show readers want “maps, graphics, lists, ranking and stats,” he wrote. “We’re in the business of satisfying customers, and we will respond to what they say they want.”

I guess I get where they’re coming from, but I’ve never been a fan of the “shrink to grow” mentality. Cuts may lead to profitability, but they don’t usually create opportunities for growth.

Today, the Times followed up with analysis of the strategy, interviewing publishers and editors. Rather than quote from that, I’d like to share this passage from the NYObserver’s analysis of the Times’ analysis:

“Most readers of newspapers really only consume a small fraction of what the newspaper produces,” [Neuharth] said. “Can you give them the stuff they want, even though there’s less of it over all? I think you can.”

But then again, Neuharth is the founder of USA Today, so we can’t really take advice from that.

Vanity (press), thy name is Observer. Please keep in mind that this newspaper was losing $2 million annually before its purchase by Jared Kushner. No word on how much money it’s losing now.

Kushner’s dad recently served time in federal prison for tax evasion and campaign finance violations, as well as hiring a prostitute to seduce his sister’s husband, videotaping the hookup, and sending his sis a copy of the tape, in retaliation for her cooperation in an investigation of the aforementioned tax evasion and campaign finance violations.

USA Today isn’t hip or NYC-relevant like the Observer, but its ad revenue was up 2% in 1Q08, despite a drop in overall ad pages.

(Update! Here’s a big-ass interview with Jared Kushner, in which he says that the Observer’s revenues were up 61% in 1Q08. It’s privately held, so he could just be lying, or he could be inadvertently showing how truly disastrous the paper’s numbers were before. Anyway, here’s an excerpt —

People are hysterical about the death of newspapers and I would say they’re not dying, they’re just kind of reinventing themselves. What the ultimate body count is in reinvention is still to be determined, but the difference between a weekly and a daily is that my product is a country home, whereas a daily is your primary residence. You need a primary residence so people may choose one primary residence over the other, and internet and the newsprint to some degree are interchangeable for certain people. You’re only going to buy a country house if you know you’re going to use it. You’re only going to buy a country house if you want to go to it. You are only going to subscribe to the New York Observer if you’re going to make time to read it and if it adds something to your life that’s kind of special. The way I look at it is, there’s obviously a lot competing for readers’ attention these days, but the goal of the Observer is to be something very unique. It’s a hyper-unique product. I’d like to think that our editorial mission is to give our readers every week one or two things that they just can’t get anywhere else that would make them smile, or a little bit smarter. We have the smartest readership probably in the world of any publication.

— in which he ignores the definition of the word “unique”.)