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Archive for March, 2019

Quarter after quarter and year after year, McClatchy Co. officials have been trying to convince investors that they are producing butterflies when, in reality, they have been mired for more than a decade in the caterpillar business.

And so it was again today when Craig Forman, McClatchy’s CEO, emphasized only the few positives about his company in the fourth quarter, 2018, earnings-report call with analysts and investors.

Before the call — which lasted about 45 minutes and which I listened in on — McClatchy released its fourth-quarter results.

The headlines from those results were impossible to sugar coat: McClatchy incurred a net loss of $27.5 million, or $3.52 per share of stock, in the fourth quarter of last year.

For all of 2018, the company reported a net loss of nearly $80 million, or more than $10 per share. (The stock price closed today at $5.25 per share, down almost three percent.)

For years, McClatchy has stuck relentlessly to one refrain: its “continuing digital transformation.”

It is in that area that McClatchy is always looking for signs of hope, and Forman found some.

Forman

“We grew digital-only subscribers by 51 percent year-over-year in the fourth quarter, and they were up 13.5 percent…from the third quarter of 2018,” Forman said in the news release accompanying the fourth-quarter report.

Another point he could brag about: “This is the eleventh consecutive quarter of digital subscription growth, and indicates that the digital subscription platform we have built is delivering value, keener insight and benefit to our business.”

The problem is the platform is unsteady. McClatchy owns and operates 29 daily papers, and its total number of digital-only subscribers is 155,500. That’s about 5,360 per paper — lame when you consider that The New York Times has more than three million digital subscribers (to its various digital products), and The Boston Globe has more than 100,000.

The Kansas City Star has about 8,500 digital-only Sunday and weekday subscribers.

**

In the conference call, a media-industry analyst from Connecticut, Craig Huber, asked Forman about the prospect of shutting down its print operations in the next “three, four, five years.”

Deciding when to go all-digital, Forman replied, “has been the $64,000 question.”

Beyond that, he would not speculate, saying, “I’m not going to put some sort of date on (eliminating) print.”

He acknowledged, however, that print was becoming a “premium product,” meaning McClatchy has begun demanding extremely high rates from people who are wedded to their print subscriptions…Although the price of print subscriptions is somewhat negotiable, The Star is now asking upwards of $700 a year for seven-day-a-week print subscriptions. (The only reason I still take the print edition is I get a “retiree” rate of $129 a year.)

I’ve told a few people it wouldn’t surprise me if, in the relatively near future — this year, next year, the year after — McClatchy announced one day that it would be eliminating all print publications on a certain date.

Such a move would cost the company a lot of revenue, but it would significantly reduce expenses and would force people to make the transition to digital or find their news elsewhere.

**

One final point…That big debt that McClatchy has been hauling around lack a sack of coal since it bought the Knight Ridder chain in 2006 is still very heavy.

The company’s principal debt was $745.1 million at the end of 2018. The company finished the quarter with $21.9 million in cash, resulting in net debt of $723.2 million.

At the end of 2017, net debt was $705.6 million.

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The more I think about the state of the Kansas City area’s second largest political jurisdiction — Jackson County — the more galling it is and the angrier I get.

This is the most inept and anemic political organization — the combination of the county executive and the County Legislature — you could ever find.

It’s so bad that when the downtown courthouse closed for three weeks earlier this year because of water main breaks and flooding, there was very little publicity, and I didn’t hear one complaint. That told me one thing: Most people just didn’t care and didn’t need county government’s services very badly.

By comparison, when City Hall closed for a day and a half for the same reason, the news was all over TV and other outlets, and there was a palpable sense of urgency to get the building reopened as soon as possible.

…I wrote last week about KC Star reporter Mike Hendricks’ big scoop regarding County Executive Frank White covering up and watering down a damning report about shortcomings at the Jackson County jail. I wrote that relatively few people knew about it or cared about White’s chicanery mainly because The Star, which carried the story on its front page, no longer has the clout or readership it did as recently as 15 years ago.

The public’s tepid reaction to that revelation was disturbing but not surprising because I’ve been painfully aware of The Star’s fading influence. But what did surprise me was the County Legislature’s collective reaction to White poking his index finger in the Legislature’s eye.

A couple of legislators had reacted angrily in Hendricks’ story, but when the legislators had the opportunity to grill White at Monday’s regular weekly legislative meeting, not one of them dared to confront him as he sat before them.

White had essentially said, “Fuck you,” to the Legislature, and the nine of them (assuming they were all present) sat on their hands and pinched their tongues.

And The Star’s editorial page — which we could look to in the past to bring the hammer down on cowardice in the face of bad government — offered a very pablum-esque assessment: “Such avoidance tactics are counterproductive because the jail story isn’t going away.”

Counterproductive? Are you shitting me? Where the hell is the outrage? Where’s the cudgel, calling the Legislature cowardly and irresponsible and demanding members speak up on behalf of the public?

God this is maddening!

**

Let’s take a closer look at this increasingly awful debacle…

Everyone knows we need a new jail. The place is a disaster and it’s extremely dangerous as far as the health and safety of the inmates and the corrections officers. But how can we, the public, possibly put our faith in Frank White and this spineless Legislature to arrange financing and oversee construction of a new facility? It’s impossible. White and the Legislature and Sheriff Darryl Forte (he who ran from the Police Department so he could collect a fat salary as sheriff on top of his police payout and pension) have Zero Credibility with the public.

Who among you, Jackson County residents, would vote for a sales tax, a property tax or any kind of tax to build a new jail with that bunch in charge of the money? 

The previous administration, under County Executive Mike Sanders, was crooked to the core. Smilin’ Mike is now in prison for engineering a  kickback scheme, and so is his former chief of staff, Calvin Williford, a willing accomplice. Succeeding Sanders was White, a former star second baseman for the Kansas City Royals. White has shown himself to be completely in over his head and totally unqualified to manage not even his personal finances, much less the public’s.

Mike Sanders, after being sentenced to 27 months in prison last September

The County Legislature is an alarming mix of relatively inexperienced people and some who have been slurping at the public trough for decades.

Pop quiz: Have you heard of any of these people…Theresa Galvin, Charlie Franklin, Jeanie Lauer, Jalen Anderson and Tony Miller?

Theresa Galvin, the current legislative chairwoman, and Tony Miller are just starting their second terms on the Legislature, while Charlie Franklin, Jeanie Lauer and Jalen Anderson are in their first terms.

Crystal Williams, one of the more prominent members, was first elected in 2010.

Dan Tarwater

Scott Burnett

Then you’ve got the dinosaurs — Scott Burnett, Dan Tarwater and Ron Finley. Burnett has been drawing a nice paycheck since he was first elected 21 years ago. Tarwater has him beaten by four years — a quarter of a century at the county feed lot.

And, finally, Ron Finley. What a case!

Ron Finley

This guy was elected to the City Council in 1991, re-elected in 1995 and then ran successfully for County Legislature in 1998. He was re-elected to the Legislature in 2002 and then was out of public office for 16 years before deciding to run for the Legislature again last year. On the basis of his name identity in the African-American community, he won.

Before the outgoing Legislature wrapped up its 2018 business, legislators approved a special benefit for Finley: They passed an ordinance allowing him to simultaneously collect his $35,000 annual salary as well as the county pension he earned from his earlier eight years on the Legislature.

But that’s not all: Finley is also drawing a nice pension (not sure how much) for his seven years on the City Council.

…I tell you, this serving on the County Legislature is nice work if you can get it. And all you gotta do is sit there and keep your mouth shut when you see bad things happening.

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Today, sadly, I’m obliged to report another landmark in the contraction of my former favorite newspaper (and longtime employer), The Kansas City Star.

For the first time in at least a century, The Star’s Sunday print circulation has dropped below 100,000.

According to quarterly statistics from the Alliance for Audited Media, a newspaper industry trade organization, the number of Sunday papers being sold through home-delivery, mail and single copies was down to 97,376 at the end of 2018.

For the previous quarter, ending Sept. 30, 2018, the comparable figure was 104,195. At the end of 2017 it was 118,203.

The Star was founded in 1880, and by 1915 its circulation was more than 200,000. At its peak, probably in the 1950s, The Star’s Sunday circulation probably was between 400,000 and 500,000. That’s a spectacular fall.

For those of us who care, the time is long past to wring our hands about this free-fall in newspaper circulation. Many major metropolitan dailies are in the same situation and struggling to hang on and find light at the end of the online-era tunnel.

But here’s the tragedy: In Kansas City, at least, The Star has probably lost 90 percent of its former impact. Through the potent combination of its news and editorial pages, The Star used to be able to set and guide public policy, establish community goals and chart the course of civic engagement. With one well-timed editorial, it could kill a popular elected official’s future, or it could have Kansas City Council members or Jackson County legislators hopping to the beat of its drums.

Very seldom can it do that now. Elected officials know full well that The Star is a shadow of its former self and that relatively few people are paying attention either to what’s on the front or editorial pages, or what’s on the paper’s lame and mostly insipid website.

**

Let me give you a classic example…Today’s print and online editions are led by what should be a blockbuster, ground-shaking story by Jackson County Courthouse reporter Mike Hendricks.

The gist of the story is this: Either County Executive Frank White or members of his staff (it would appear with his knowledge), emasculated a damning report about shortcomings in the deeply troubled Jackson County jail.

Here are two key paragraphs from Hendricks’ story…

White gave no hint when he released the Shive-Hattery report at the first of this year that the 53-page document had been heavily edited, despite his outspoken support for government “transparency” during his three years as head of county government.

The Star learned of the extensive omissions — more than 60 pages of singled-spaced text and charts — after obtaining a copy of the original, 118-page draft independently. A reporter then shared the document with the past two chairpersons of the county legislature, which last spring appropriated up to $285,000 for the study that White said would finally lay the factual foundation for replacing the Jackson County Detention Center with a safer and more humane facility.

Even more outrageous than the facts was White’s refusal to accept responsibility for the whitewashing of the report when Hendricks reached him by phone Friday night.

He said some of staff members whom he didn’t identify decided it would be wise to restrict public access to the material. “That’s not my fault,” he told Hendricks. “That’s not my call.”

“Not my call.” That from the mouth of the most powerful person in Jackson County government.

It’s just a lie. It’s thumbing his nose at the public and at the County Legislature.

And how can he do that? How can he get away with it?

One reason and one reason only: The Star no longer carries the big stick it did as recently as the mid-2000s. With its circulation decline and the shocking erosion of its editorial staff (including at least eight top-level reporters and two widely admired photographers who took buyouts last month), White and other elected officials now have little to fear in the way of repercussions from The Star.

Like I said, fewer than 100,000 households will have gotten today’s print edition of The Star. And more than half of those are outside Jackson County, and the residents of those households won’t particularly care what Frank White is up to. Thousands of readers will also be going to The Star’s website for their news, but the first headline they will see is not about Frank White’s chicanery but about “dangerous cold coming.”

And even if The Star decides to embark on a series of editorials lambasting Frank White, they will have little effect. White realizes that relatively few people are reading, and heeding, what The Star has to say. He knows he can do just about whatever he wants to do and that he can throw up yard signs bearing his name and the image of a baseball and he would be hard to beat at the polls.

Here’s the main point, though: This is much more than a tragedy for The Star. People are moving on from The Star. But they’re also moving on without any major, institutional guideposts, which The Star was, to open their eyes to the outrages going on around them.

Largely because of the decline of the newspaper, area residents are much less informed and engaged than they once were…Look at the mayor’s race. The primary is a month away and I would bet most people couldn’t name three of the candidates. Many people are feeling their way along in what is, simultaneously, an informational void and overload.

**

One of my first editors at The Star, a man by the name of Don T. Jones once told me, “Fitzpatrick, you eat your bylines for breakfast, don’t you?”

He was 100 percent right. I loved to report and write stories, and I couldn’t wait to get out to the sidewalk the next morning and get the paper and see where my story was placed and how it read in black and white.

Those days, like the days of The Star’s several-hundred-thousand-copy runs, are over. And I am worried where we are going in this less-informed, less-enlightened era.

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