One of my difficult duties as self-anointed watchdog of journalism in Kansas City is to track circulation at The Kansas City Star, from which I retired as an assignment editor in 2006.
I say difficult because, as everyone knows, circulation of print newspapers has been steadily dropping since it peaked, nationally, in the mid-1980s.
I don’t know what The Star’s circulation was back then, but I can give you some figures from more recent times.
:: In 2004, Sunday print circulation was about 388,000.
:: By 2010, the number was down to about 283,000.
:: Last August, it stood at about 80,000.
:: As of Dec. 31, 2018, the number was 67,889.
That’s what you call a cliff drop. It’s also the main reason executives at parent company McClatchy have been mulling when to call a halt to the blood-letting, ceasing print publication and going exclusively digital.
Rumor has it that could occur in 2020. McClatchy CEO Craig Forman was asked about that in a conference call a few months ago but wouldn’t comment.
On May 9, McClatchy executives will have a conference call to announce the company’s financial performance for the first quarter of this year, and it wouldn’t surprise me if Forman is asked about that again; it’s the elephant in the room.
For years, McClatchy executives have stressed the future of its journalism lies in transitioning from print to digital. The problem is they haven’t been very successful at it, and there are few indications that they’ve found the combination to the lock.
According to the Alliance for Audited Media, a newspaper trade group, The Star had only about 12,300 stand-alone digital subscribers on March 31 of this year. (Print subscribers automatically get the digital product.)
In fairness, many other metro dailies are having similar problems making the transition. The Los Angeles Times, for example, has only 160,000 digital subscribers, and that is in a metro area of 15 million. More successful has been The Boston Globe, which has more than 100,000 digital subscribers in a metro area of 4.7 million.
(Far and away the most successful paper, in terms of digital subscriptions, is The New York Times, which has more than 2.6 million online subscribers.)
A positive for both The Globe and The LA Times is that they are now privately owned, and their owners are free of the pressure that comes with ownership by companies whose stock is publicly traded. As Jeff Bezos has done at The Washington Post, Patrick Soon-Shiong, who bought the LA Times for $500 million last June, has invested heavily in The Times and is willing to lose tens of millions attempting to rebuild and revive the paper in his vision. He has said his goal is to have 2 million to 4 million digital subscribers by 2022 or 2023.
No such investment will be forthcoming, however, at publicly owned companies like McClatchy, Tribune Publishing (Chicago Tribune and other papers) and Gannett, the largest newspaper chain. Those three companies appear to be holding weak hands, with no good options for getting new cards. For that reason, speculation abounds in the industry that those companies might be in play for some sort of consolidation.
McClatchy made an unsuccessful run at Tribune last year, so it is now more likely to be in the category of the pursued than the suitor. Further complicating the picture, hedge funds are — or have been — knocking at the door of two of those companies. Alden Global Capital attempted a hostile takeover of Gannett in January, and Chatham Asset Management has been steadily buying up shares of McClatchy and is the company’s largest creditor. Chatham’s ownership share of McClatchy has gone from about 20 to 25 percent within a matter of months.
I have no idea what’s going to happen with McClatchy. I think there’s a good chance Gannett, which fended off Alden, will buy the 29-paper chain. It could end up in bankruptcy. In any event, the future looks bleak. On Jan. 1, McClatchy’s stock price (under the MNI symbol) was about $8 a share. It closed today at $3.12.
Today, the investment research firm Zacks said it was likely that on May 9 McClatchy would announce a year-over-year earnings increase but on lower revenue. It will be interesting to hear how Forman and his henchmen, including former KC Star publisher Mark Zieman, cast that as a positive, but I’m confident they will…They’ve been pitching poor financial results as good news for years now.
**
When I got my first newspaper job, in September 1969, it was in Covington, KY, at a paper called The Kentucky Post and Times-Star. It was a one-section paper delivered to northern Kentucky residents as a “wrap-around” to The Cincinnati Post and Times-Star.
I would have preferred to start at a major metro daily, like The Cincinnati Post or the Louisville Courier-Journal, my hometown paper, but I realized my best bet was to start at a smaller paper and then try to move up. At the time, The Kentucky Post’s weekday circulation was about 50,000, which, I thought, was decent. My goal, though, was to get to a paper that went to hundreds of thousands of people.
I realized that goal a year later when I came to Kansas City. I tell you, I was absolutely thrilled that I’d reached “the big time.”
…I talked about The Star’s Sunday circulation above, but I didn’t mention weekday print circulation. Well, as of March 31, it was down to 53,112, just about the size of my first paper back in northern Kentucky.
JimmyCsays: At the juncture of journalism and daily life in KC 
Be grateful you missed derby this year The weather is AWFUL both days.
I’m always grateful to be alive for another Derby, Marcie, and hate to miss one, even if it’s rainy. Now, if it’s cold, it can be pretty challenging, but that shouldn’t be the case tomorrow…I will also miss seeing my family and friends in Louisville, including you, Marcie.
My bet? Tacitus to win and place. Happy Derby!
I wonder when the media will get the fact that although they have a liberal and biased view the average reader does not. When the media went from reporting to slanted opinionating it was the beginning of the end. How do they not get it? Well, their demise is on them plain and simple.
I don’t think it’s that simple, Jeff, but the turn toward conservatism — particularly in the southern states and the Midwest — certainly had a big impact on newspaper circulation.
As I have said before on this blog, I would dare one to find a conservative publication (note I said publication) that pays it’s own way. All the conservative newspapers or magazines have some kind of well-off individual(s) funding their losses in order to keep them publishing. Two notable examples: The Washington Examiner is said to lose upwards of $40 million a year. I would be stunned if Rupert Murdock’s NY Post makes any money – he’s there because it’s biggest media market in the country and he is willing to lose money to be part of it.
Tribune Company’s (also a company in trouble) largest paper is the Chicago Tribune, long a conservative stalwart. The Tribune is hemorrhaging circulation despite have a conservative tilt. All of the conservative magazines have owners behind them that subsidize the losses.
Also, do you think all of these small town newspapers that are folding up are because they are too liberal? No. One reason is that print publication readership is growing old and passing on. As Warren Buffet recently said, newspapers are a dying business. Ad revenue is dramatically shrinking (and has been for some time) and the cost of having a paper publication is now increasingly placed on the subscriber when means subscription rates have shot skyward which I am sure accounts for a good portion of the decline.
Print has never been never been able connect with younger readers. I hear comments from younger (and some not so young) folks that why should I pay for something when I can get virtually the same thing on online for free. People got use to getting free access to news sites when the Internet was young and that is now a hard habit to break. None of my conservative friends would subscribe to The Star if it suddenly turned conservative – they’ve developed their own free or very low cost alternatives that tells them what they want to hear. That was the case 5-10 years ago and remains the case now.
And yes, conservative talk radio has exactly the same problem facing them as their core listeners are generally 60-65+. But that is a whole other subject.
News today that the New Orleans Times-Picayune was bought out by the upstart owner of the Advocate. The two papers will merge and in 60 days the entire news room of the TP will be terminated. Could that happen in KC?
Simple fact is that Tony Berg has been an utter failure. He cans his institutional memory in the news division, dumps covering many of the wealthy suburbs that would probably buy the paper regardless of what it printed and, instead, wastes valuable resources hiring a pack of overpaid east coast losers who have absolutely zero connection with the community, to write opinion columns either no one reads, or that they hate. The perfect demonstration of Berg/Fannin stupidity is that they hired a bubble-gum blowing college student to cover the Kansas legislature (and why not, surely nothing of import ever happens there?)
Sure, times are tough, but both Berg and Fannin need to hit the unemployment line (along with Forman and Zieman).
Someone should investigate Chatham and how it is they continue to print unblemished glorious and steady monthly returns as McClatchy (MNI) goes down and down and their other big holding AMI is also a mess.
Chatham Asset Private Debt and Strategic Capital Fund II, LP
April, 2019 +2.63% (net) +3.25% (gross)
2019 Q-T-D +2.63% (net) +3.25% (gross)
2019 Y-T-D +7.69% (net) +9.61% (gross)
2019 I-T-D* +7.69% (net) +9.61% (gross)
*(from 1/1/2019)
Estimated capital at May 1, 2019:
Chatham Asset Partners High Yield Fund, LP $ 598.3mm
Chatham Asset High Yield Offshore Fund, Ltd. 993.6
Chatham Asset Private Debt and Strategic Cap. Fund LP 498.8
Chatham Asset Private Debt and Strategic Capital Fund II, LP 139.3
Separately Managed Accounts 1,216.6
Sub Advised Liquid Alternatives 784.3
Total $4,230.9mm
They are blood suckers. They close in on “distressed” companies and suck out the cash, reinvesting it elsewhere.
I subscribe to both the KC Star (print M and Su which gives me their digital) and digital NY Times. The Star and I have had countless divorces over the years but I’m always lured back because I love reading a real newspaper. Even one that’s often pretty sub-par. And I do gain insights into local issues that are useful.
I do find the Star’s digital edition very laborious to navigate, compared to the NYT. Alas, I guess we are an aging breed (I hesitate to say dying, too sad.).