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Posts Tagged ‘McClatchy’

The New York Times’ media writer, the iconoclastic David Carr, sawed away mercilessly Monday at two of the nation’s major newspapers chains, Gannett and Tribune Co.

In his weekly column, Carr said that current and former executives at those two companies (and, really, you could lump in several others, including McClatchy, which owns The Star) were just as guilty of corporate greed and self-enrichment as Wall Street bankers.

He cited the case of Craig A. Dubow, who resigned recently as Gannett’s chief executive.

“His short six-year tenure was, by most accounts, a disaster,” Carr wrote. “Gannett’s stock price declined to about $10 a share from a high of $75 the day after he took over; the number of employees at Gannett plummeted to 32,000 from about 52,000, resulting in a remarkable diminution in journalistic boots on the ground at the 82 newspapers the company owns.”

And was Dubow shown the door for that miserable performance? Oh, no, He retired on his own volition and “walked out the door with just under $37.1 million in retirement, health and disability benefits.

“That comes on top of a combined $16 million in salary and bonuses in the last two years,” Carr continued.

Carr said: “Forget about occupying Wall Street; maybe it’s time to start occupying Main Street, a place Gannett has bled dry by offering less and less news while dumping and furloughing journalists in seemingly every quarter.”

The same words could be spoken about McClatchy, which has bled The Star dry, with its overall employment going from about 2,000 several years ago to about 750 now.

It’s even worse at the Tribune Co., which owns The Los Angeles Times, The Chicago Tribune and The Sun (of Baltimore), among others. Sam Zell, a blunderbuss with a background in radio-station ownership, bought Tribune in 2007 and quickly ran it into the ground — and bankruptcy court.

More than 4,000 people have lost their jobs at Tribune properties, and the Zell-appointed leaders who remain are eligible for a bonus pool of $26.4 million to $32.4 million under the current plan to exit bankruptcy.

Carr summed up the situation this way…

“No one, least of all me, is suggesting that running a newspaper is a piece of cake. But the people in the industry who are content to slide people out of the back of the truck until it runs out of gas not only don’t deserve tens of millions in bonuses, they don’t deserve jobs.”

…What a disgrace. What a terrible plague “corporate journalism” has afflicted on the newspaper industry. My heart goes out to the thousands of good, honest journalists who didn’t get in the business to get rich but who are getting the shaft from executives doing just that.

***

Now, observations on a couple of strictly local stories…

:: You know how The Star rates the regional college football teams each week?

Well, the Southwest Early College football coach gets a big, fat “F” this week for failing to call police after someone shot holes in the side of the bus after a game last Friday at the former Southeast High School football field at Meyer Boulevard and Swope Parkway.

According to a story in Thursday’s Star, coach Tim Johnson told police he waited until Sunday morning to file a police report because he had thought district administrators were going to report it.

WTF??!!

The bus starts to leave the Southeast grounds; shots are fired; kids on the bus are yelling and ducking under the seats; and the bus manages to get away without anyone on the bus being shot.

Then, the after the bus arrives back at Southwest, everybody piles out and checks out the bullet holes, and, apparently, the coach either bids the boys goodnight and sends them home, or he reports the incident to an administrator and then sends the boys home.

Holy shit! How would you entrust your kid’s safety to a guy like that? Did he fail to pick up the phone and call police? Or did he talk to an administrator and the administrator said, “Yeah, yeah, don’t worry, I’ll take care of it.”

Either way, it looks to me like the coach should be fired, and, if he reported it to an administrator — and the administrator didn’t report it immediately — the administrator should be fired, too.

Unfortunately, we’re talking about the Kansas City School District, where screw-ups are the norm.

:: Mary Sanchez wrote a nice piece yesterday about plans to raze Kemper Arena, which was built in the early 1970s.

She talked about some of the great musical artists who performed at the arena, including Paul McCartney and Wings in 1976.

My God, do I remember that night!

It was May 29, 1976 (I had to look it up) — a warm, beautiful evening. I was covering the Jackson County Courthouse for The Star, and the country assessor sold me his tickets…The county manager fixed me up with the sister of a friend…I was set.

I picked up the young lady, and we had some drinks and, as I recall, smoked a couple of joints. Our seats were down low, close to floor level, about halfway back from the stage, which was softly lighted in shades of blue, red and yellow.

From the first chords, the music was incredible. Just about the time McCartney and his wife Linda and the band got cranked up, though, my date told me she was feeling bad and was going to the restroom.

McCartney poured on, great song after great song — “Maybe I’m Amazed,” “Jet,” “Let Me Roll It,” “Lady Madonna,” “The Long and Winding Road,” “Blue Bird,” “Listen to What the Man Said,” “Hi, Hi, Hi,” and the incomparable “Band on the Run.”

After a few songs, I was torn between the music and thoughts about my date, suffering in the restroom. I walked up to the concourse and found her outside the restroom, looking pale and weak, and I asked her what she wanted to do. Selflessly, she told me to go back and watch the concert, assuring me she would be OK.

Well, I don’t know whether this was the right thing to do, but…I followed orders. I went back and watched the rest of the greatest concert I’ve ever seen. I whooped and hollered and swooned and felt like I’d been transported to a magical world.

I don’t remember much about the aftermath of the concert. I hooked up with my date and took her home…Pretty sure I didn’t get kissed. And, of course, that was the only date I ever had with her.

She was a nice kid; her name was Kathy. I’m sure she was a good catch for some guy.

If for no other reason than that concert, I will never forget Kemper Arena. I sloshed through the muddy grounds of the place many times, going to lousy Kansas City Kings basketball games, circuses and other stupid events, but the event I’ll always remember was Wings Over America!

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Talk about continuing the youth movement at The Kansas City Star.

Wow.

The woman who will become the new publisher later this month is 40.

She succeeds Mark Zieman, who was 47 when he was named publisher three years ago.

And…Mike Fannin, the editor, is only 44.

Parrish

The new publisher of the McClatchy-owned paper is Mi-Ai, Parrish, who has been publisher of the company-owned Idaho Statesman since July 2006.

Parrish, whose first name is pronounced MEE-uh, had been deputy managing editor for features and visuals at the Minneapolis Star Tribune before being tapped for the Idaho post.

I sure hope that Parrish works out, and I wish her the very best. But putting a 40-year-old person with five years of publishing experience — especially small-market experience — looks like a rather big roll of the dice to me.

On the plus side, reporter Mark Davis reports in a story on The Star’s website that Parrish led the Statesman’s effort to “transform and diversify business operations, introduce new print and digital products, grow digital traffic and revenue while improving the core newspaper and enhancing its reputation for quality journalism.”

This year, for example, the Statesman rolled out a new product called Business Insider, a weekly business-to-business magazine. And in 2008, the Statesman was named a Pulitzer Prize finalist in the breaking news category for its coverage of events triggered by the men’s room arrest of former Idaho Sen. Larry Craig in Minneapolis.

But look at some statistics.

The Star has an average Monday-Friday circulation of 210,000 and a Sunday circulation of about 300,000. By comparison, the Statesman, in Boise, has an average weekday circulation of about 50,000 and Sunday circulation of about 73,000. (Sunday circulation has been up slightly the last two years, while daily circulation has declined each of the last four years.)

So, The Star is about four times larger than the Statesman. That’s quite a jump.

Parrish also will be tested right off the bat with her choices for top managers. Among other things, she’ll have to decide whether to keep vice presidents such as Editor Mike Fannin and advertising executive Tim Doty in place.

On the digital side, her youth should work to her advantage because that appears to be where the future lies for newspapers. But her youth could work against her on the personnel side, unless she gets some very good advisers.

On that front, my recommendation would be that, in the newsroom, she turn to long-time managing editor Steve Shirk, a tried and true leader at The Star for more than 35 years.

Steve’s an old guy — about 60. He’s got the wisdom and the temperament to help a new publisher make a safe jump from a small pond into the churning waters of the Lake of the Ozarks.

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I hate to say this, but I am losing confidence in Mark Zieman as publisher — and ultimate leader — at The Kansas City Star. 

My colleague John Landsberg of Bottom Line Communications reported yesterday that there will be another round of layoffs at The Star. I can’t keep track of how many rounds there have been in the last few years, but I think this will be at least the fifth.

This latest news is particularly maddening and frustrating not because The Star’s staff apparently will get even thinner, but because of Zieman’s optimistic tone when he announced the previous round of layoffs last September.

Back then he said The Star was approaching the end of the year “financially strong” and that the industry was at a “turning point.”

To me, that not only was irresponsible, it was misleading and showed Zieman was indulging in wishful thinking. While such words might buoy employee morale temporarily, the words make it all that much harder for employees to swallow another round of layoffs. The real danger of statements like that is that they spread a sense of false hope and paint the publisher as someone trying to buy time before something even worse happens.

Employees of every organization like to hear words of encouragement and hope from their leaders, but, more important, they want a candid assessment of where things stand. Zieman has failed miserably on that front, not just in September but with unrealistically optimistic words with each round of layoffs.

So, now, unfortunately, it’s like the boy yelling fire in the theater. Except it’s the reverse because there is a fire and Zieman keeps trying to convince his troops it’s just about extinguished, when it’s obviously out of control. 

I mentioned that something big could happen. Like what? Well, how about a decision to drop the print edition several days a week. That seems like the next likely step to me.

Zieman probably won’t admit it until it happens, because he’s obviously reluctant to take off the rose-colored glasses. But it could easily happen, and it wouldn’t surprise me to see one or two weekday papers — maybe Monday and Tuesday — dropped within a year or two.

Several papers around the country have already dropped some or all print editions, and the St. Louis Post-Dispatch took a step in that direction last year, when it dropped single-copy sales — in boxes and convenience stores — of the Saturday paper. It still puts out a Saturday paper, but it goes only to subscribers.

In reporting the story last October, the Riverfront Times, the St. Louis alternative paper, asked Editor Arnie Robbins how long it would be before the Post-Dispatch would cease putting out a print publication altogether.

“I’m not feeling particularly clairvoyant this morning,” Robbins replied. “But I think in the next 10 years you could see the elimination of the weekday paper, with the Sunday still coming out in print. The rest of the week would be online or delivered through niche products and phone and e-reader apps. We’re working on a few of those projects right now that we’re excited about.'”

Well, let’s credit Robbins with some degree of candor. Ten years very likely is an overestimation of how much longer the daily P-D will survive, but at least he doesn’t have blinders on.

Now, compare that statement with what Zieman told employees in the September memo announcing that round of layoffs:

 “I know that weathering this recession has been exceptionally hard for each of you. But we will begin next year with a steadily improving revenue trend. We are posting record online traffic and revenue, we remain the dominant media company in our region, our presses and readership metrics are among the best in the country and our news products are recognized nationally for their journalistic excellence. The Star won’t die, but this recession will.”

Metrics. Journalistic excellence. The Star won’t die. Uh huh.

This is really a desperate situation in my view. I think The Star’s owner, McClatchy Co., is headed for bankruptcy.

As I reported in June, Morningstar, the independent investment and stock research company, had a grim outlook for the company. An article in Morningstar StockInvestor, a periodical available to Morningstar members by subscription, said this:

“Our fair value estimate on McClatchy shares is $0.”

Are you listening, Mark? That’s zero. Nothing. Worthless shares for the stockholders.

At the time, McClatchy’s stock was selling at $4.28 a share. The stock closed Friday at $4.89 a share, but that’s no indication of a significant upswing. Sprint, as difficult as its situation is, has a much better chance of surviving than McClatchy does.

The company paid too much for KnightRidder in 2006 and bought the KR papers at precisely the wrong time.

Do you remember when Payless Cashways senior managers, led by then-chief executive officer David Stanley (fondly known to some as Minnesota Dave because he flew back to his home in Minneapolis every weekend) took the company private in 1988? They paid too much ($900 million); the company muddled along for about 10 years and then rolled over and died.  

McClatchy, too, is going to roll over and die, I believe…or get bought out for a song. I can hear the late “Dandy” Don Meredith singing from heaven, “Turn out the lights; the party’s over.”   

And what will happen with the papers McClatchy owns? I don’t know. But it isn’t a bright picture, and I hope Zieman doesn’t weigh in with more irrationally optimistic statements when he officially announces the newest round of layoffs.

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At 6:38 p.m. on Friday, The Star’s web site, kansascity.com, posted a headline that said, “Sprint-Nextel merger among the nation’s worst, Bloomberg says.”

Well, the headline certainly piqued my interest, so I clicked on the headline to see the story. 

That’s where things got more interesting. The story, written by The Star’s Mark Davis, was about a Bloomberg evaluation of bad deals, based on a benchmark index that Bloomberg had formulated.  

As the headline suggested, Davis led his story with the Sprint-Nextel deal, saying it was the third worst deal out of 100 that Bloomberg had ranked.

But Davis waited until the fourth — and second-to-last paragraph — to unveil a surprise. Which deal do you think ranked at the top of Bloomberg’s list? What was the worst merger or acquisition among the entire 100? Give up? Well, it was none other than McClatchy’s $4.1 billion purchase of Knight Ridder in 2006.

The Star, of course, is one of the papers that McClatchy obtained in that infamous transaction.

Odd, then, isn’t it, that Davis and Star editors chose to highlight the Sprint-Nextel merger when the very worst deal was, literally, right under their noses? I’m sure that Star editors would rationalize the leapfrogging act by arguing that Sprint is locally based and has far more employees in this area than McClatchy. 

That’s true, but The Star is no small employer; has at least as high a profile locally as Sprint; and…well, No. 1 means No. 1, right? 

The Star could have gone a long way toward presenting an intellectually honest account by simply changing the headline to say, “Sprint-Nextel, McClatchy-Knight Ridder deals among the nation’s worst, Bloomberg says.” It could have kept the story exactly as it was, even while fudging on the rankings. Instead, The Star took the low road.

There’s a saying in the news business for what Davis did. It’s called “burying your lead.” What that means is that the biggest, most interesting news is down low in a story, rather than at the top, where it should be.

And that’s just what Davis and Star editors did. They took the biggest and hardest kick at Sprint — a more convenient target — and gave their parent company the equivalent of a slap on the wrist.

Here’s what Bloomberg’s Zachary R. Mider said in his initial story, which Bloomberg posted on Thursday and which spawned Davis’ story:

“McClatchy’s purchase of the Knight Ridder Inc. newspaper chain, for $4.1 billion in 2006, ranked the worst of the 100 on Bloomberg’s list, with McClatchy shares underperforming the Bloomberg Advertising Age AdMarket 50 Index by 93 percentage points. Sacramento, California-based McClatchy borrowed cash to buy the chain as newspaper real-estate advertising plunged.”

All I can say is shame on you, KC Star, shame on you for playing a journalistic shell game.

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The latest edition of Morningstar StockInvestor, a monthly publication of the renowned independent investment and research firm, contains a very grim forecast for the McClatchy Co., owner of The Star and several other newspapers.

McClatchy stock , which traded at about $50 a share when the company bought out Knight Ridder in 2006, closed Friday at $4.28 a share.

Morningstar StockInvestor, which is available by subscription only, opened its review of McClatchy this way:

“Since its poorly timed acquisition of Knight Ridder in 2006, McClatchy has struggled under the multiple weights of declining revenues, high debt, large exposure to troubled housing markets, and the continuing shift of readers and advertisers from print to online. Given the persistence and severity of these conditions, we think equity shareholders are at risk of losing the entire value of their investment.”

Gulp. Those two sentences should make everyone working at The Star and other McClatchy papers, like the Sacramento Bee and the Miami Herald, not only cringe but start looking for new jobs.

While McClatchy and other newspaper chains have tried to paint a rosier-than-real picture of the industry by saying, essentially, “the losses are lessening,” Morningstar throws the tinted glasses aside.

“Our fair value estimate on McClatchy’s shares is $0.”

That’s right, Morningstar analyst John Ayling, who wrote the piece, thinks that the balance eventually will tip from stockholders’  interests to creditors’ interests and that stockholders will be left empty handed.

“McClatchy’s $4.6 billion purchase of Knight Ridder was a bold bet on the future of print journalism,” Ayling wrote. “The acquisition added more than $2.5 billion in debt to McClatchy’s balance sheet. It more than doubled both the company’s portfolio of daily mastheads and its annual revenues. However, in 2007, it took a noncash impairment charge of $3 billion — evidence that McClatchy overpaid for the Knight Ridder acquisition.”

Ayling sees newspaper industry weakness continuing. “During the next five years, we think that advertisers and readers will continue to gravitate away from newspapers and toward the ease and flexibility of the Internet. Internet-based classified ad sites allow advertisers to target readers with specific interests at lower cost than print classifieds.”

I want you to know that as I sit here and write this, I don’t feel good about it at all. One reason is that I bought a significant chunk of McClatchy stock (at about $50 a share) just before I retired in June 2006. Like McClatchy, I wanted to make my own bet on the future of print journalism. I also wanted to demonstrate my confidence in the new owners of The Star.

I remember clearly when McClatchy CEO Gary Pruitt came into the newsroom shortly before the deal closed and talked about how he believed things would go well for McClatchy and us, the employees. When I asked him, in front of the newsroom audience, if he was planning any employee buyouts, he said, no, that McClatchy believed in adding people, not subtracting.

At that point, having been thinking about retiring after nearly 37 years with the paper, I knew that I had to make my own arrangements; there wasn’t going to be any golden parachute. A couple of months later, I retired, and the paper paid for a send-off pizza party in the Independence bureau, where I was an assistant metro editor.

I might have been the last person to get a company-paid going-away party.

The memories of that party, which marked a happy culmination of my career, help ease the pain of the subsequent stock-market loss I endured. For McClatchy stock, along with that of other newspaper companies, soon began a steep, steady decline.

In 2008, I sold out at $8 a share.

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