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Essay
Intro
By the Project for Excellence in
Journalism and Rick Edmonds of The Poynter Institute
On balance, 2004 was another discouraging year for editors
hoping to rebuild the capacity of their newsrooms or citizens
hoping to see broad improvements in the quality of their local
newspapers.
Newsroom employment actually fell by 500 full-time professionals
in 2003, or about 1%, to 54,200. That cancelled out a small
gain in 2002, and returned to levels below 2001, when employment
fell by 2,000 - or about 4% in a single year.
Firm information on 2004 staffing or newsroom budgets is not
available, but anecdotally it appears to have been a year
of hold-downs and scattered cuts. More of the same seems likely
in 2005.
There is good news in the number of minorities working in
newsroom. While the overall number of staff members was down,
the number of minority newsroom employees rose to 7,000, or
about 13% of the total. Both of those numbers are the highest
they have been.
For chains, Gannett comes closest to matching the diversity
of its community, followed by Knight Ridder, McClatchy and
the New York Times Company.
At the same time, newsrooms saw a slight increase in the
number of women. In 2003, women constituted 37% of the newsroom
workforce. Among supervisors, 34% were female, as were 40%
of reporters.
The first prominent cut was the reduction of 60 newsroom
jobs at the Los Angeles Times in early summer 2004. Ironically
it came just months after the Times won five Pulitzer Prizes.
Tribune Company executives cited soft performance in the L.A.
ad market. Earlier in the year, another Tribune Co. paper,
The Baltimore Sun, dismissed its editor, William Marimow,
noting conflicts but not specifying whether they were over
newsroom resources. He ended up a managing editor at National
Public Radio, recipient of a huge grant from the estate of
Joan Kroc to expand news operations. The Washington Post completed
a buyout program that resulted in the phased early retirement
of many familiar bylines (though like the L.A Times, The Post
retains an enormous and highly qualified staff).
In autumn the other shoe dropped for two of the circulation-scandal
papers. The Dallas Morning News announced it was downsizing
the newsroom by 60 positions, and Newsday announced in mid-November
that up to 110 jobs would have to be eliminated through voluntary
and involuntary buyouts.
The Houston Chronicle announced cuts, and others were in prospect
at other Tribune Company papers. Jack Fuller, the Pulitzer
Prize winner who had run Tribune's newspaper division for
a number of years, took early retirement.
Other cuts came primarily from formal or informal job freezes
and attrition. (This was the case at Knight-Ridder, for instance.)
These cuts were not anything like the shocking wave of deep
cuts experienced in 2001, which reached roughly 10% at Knight-Ridder
papers alone.
It certainly is possible that other papers were expanding
staff unannounced, but the probable net reduction in industry
staff will not become more apparent until April 2005, when
ASNE releases its annual census, reflecting end-of-2004 staffing
levels.
Differing Strategies
The story of newsroom investment in 2004 was not one of unrelieved
gloom but rather of diverging strategies. The big five national
papers, top regionals like The Boston Globe, several major
chains and various independent operations seem to follow the
theory that quality will build circulation and reader involvement,
which constitute a net business plus for advertising performance
and the long-term health of the franchise.
The McClatchy Company highlights a "Good Journalism
= Good Business" banner in all its presentations to analysts
and investors. "Keeping our newspapers compelling to
readers," CEO Gary Pruitt told the Mid-Year Media Review
in June, is integral to the company's 19 consecutive years
of circulation gains. That - and strong markets like Minneapolis,
Sacramento and Raleigh-Durham - in turn has led to a 50% better
ad growth rate at McClatchy in the new century, compared to
industry averages.
The New York Times, even after Jayson Blair and related embarrassments,
prides itself on running the Rolls Royce of news operations,
and is priced accordingly. The Times realizes annual circulation
revenue per customer of $474 a year, by far the highest in
the industry. (Its ad revenue per average number sold is $905
a year, also the highest).
Another newspaper that probably should be cited as a stalwart
on news investment is The Wall Street Journal. Despite the
worst ad losses and stock performance in the industry over
the last five years, the company has reinvested in the product
with enhanced color reproduction and the successful launch
of a Weekend section and a reformatted Personal Journal daily
section (all ad-friendly as well). In the same vein, The Journal
has announced the September 2005 launch of a Saturday edition,
a vehicle for yet more ad sales and daily reporting of breaking
Friday business news that will require 150 additional editorial
and business-side employees.
Some analysts and academics also offered new support for
this "virtuous cycle" approach to news investments:
- Paul Ginocchio of Deutsche Bank Securities applied a fresh
mathematical analysis to 150 large markets. He found that
papers recognized for superior news performance, like The
Washington Post, the Lexington Herald Leader and the Arkansas
Democrat-Gazette had superior "brand power" -
defined as circulation numbers and ad rates above expectations
for their markets.
- Coming as "a new kid on the block" to the newspaper
industry, Ginocchio broke with the Wall Street tradition
of considering the news department mainly an expense to
be controlled. Instead, he hypothesized that it was the
heart of any paper's value. "At their core, newspapers
'own' the news," he wrote. "They are the only
media with the organizational and cultural structure capable
of generating the volume, depth and quality of original
news (and analysis) demanded by the public on a daily basis."
Those who do the news/editorial job with distinction will
be rewarded with a stronger franchise in their market; those
who short news quality will be more vulnerable to competing
media. He concludes, again in a break from the Wall Street
norm, that brand power merits consideration alongside earnings
and profit margins in assessing a company's future prospects.
- The Duke economist and political scientist James Hamilton
explored the reverse side of the same idea, that short-term
business thinking drives companies to maximize profits at
the expense of public service and high-end reporting. His
book, "All the News That's Fit to Sell," recommended
that nonprofits take up the slack by producing quality journalism
themselves or subsidizing it in mainstream commercial media.
- Phil Meyer of the University of North Carolina, a longtime
scholar of the connection between news quality and business
success, published his most recent work on the subject,
"The Vanishing Newspaper: Saving Journalism in the
Information Age," in December. He concluded that real-world
managers are largely numb to the evidence of the benefits
of larger news investments, and that many are managing for
profits as if newspapers were on an inevitable slide to
obsolescence and thus should be milked while they can. Much
larger news investments would be needed to reverse course
at the typical regional newspaper, Meyer concludes, and
like Hamilton, he suggests that the non-profit sector may
provide some of the support for serious journalism that
is falling by the way.
- Northwestern University's Readership Institute continued
studies showing that broadened content targeted to tested
reader preference and strong promotion can reverse the slide.
But it cautioned that half-measures do not appear to be
effective and that newsrooms need to change tradition-bound
work cultures.
- Stephen Lacy of Michigan State University, a longtime
scholar of newspaper competition, published a new study
showing that high-margin public-company operations attracted
stronger competition from weeklies than did privately owned
dailies.
- Rick Edmonds (co-author of this chapter) published a study
of news expenditures per subscriber, which he called news
EPS, showing that in any circulation range, the top papers
are typically spending twice as much for each reader as
the least generous are.
The Project for Excellence in Journalism has also continued
work with the University of Missouri on an econometric model
of newsroom investment. The model, based on data from the
Inland Newspaper Association, shows that papers that invest
more in news derive significant long-term payoff, and those
that do not will see their business atrophy. The team is
now working with some newspaper groups to refine and test
the model in individual markets.
There are also strategies in place to maintain or improve
quality within a context of cost constraints. Many chains
are using the findings of the Readership Institute (which
doesn't bill its recommendations as cost-free) to produce
more of the material and presentation found to be most engaging
to readers, using existing staff and budget. This approach
has taken root in two companies frequently faulted for putting
profits ahead of maintaining a strong level of news investment.
It may be more accurate to say they have become prescriptive
about what they want the tightened staff to do:
- Gannett is pushing an idea it calls "Real Life, Real
News," mandating much heavier coverage of ordinary
shared experiences like high-school graduation or holiday
observances and increased efforts to draw story ideas from
meetings with readers.
- Knight-Ridder now partly bases editors' bonuses on whether
their papers improve, as measured by reader surveys in categories
like watchdog journalism and news about "people like
me."
Critics of both companies might consider those efforts modest
at best. The purpose of this chapter is not to make such evaluations
company by company. But we think it fair to note that both
have decided in the current context to take such actions,
and to communicate them to the investment community.
Some also might find modestly encouraging the fact that so
many newspapers are venturing into new youth publications
and foreign-language papers or supplements, together with
other kinds of niche publications. But many of these are small-stakes
bets. Turning to the main event of developing an online report,
the national publications have strong sites. Regional newspaper
sites typically have the highest traffic in their markets.
Some degree of interactive discussions is typical of all
sites. But there are serious questions still about whether
the level of investment online represents real innovation
adequate to the long term or whether the industry is being
tight-fisted and perhaps shortsighted. Rob Burnett, the Newspaper
Association of America's own analyst, faulted the industry
for a lopsided emphasis on developing online advertising,
with little exciting to show yet in content or display. A
July 2004 study from the University of Texas showed that of
30 newspaper sites monitored, only 12 made any substantial
changes during the course of the day. The rest were stocked
with so-called "shovel-ware" from the once-a-day
print edition.
While newspapers cling to the mantra that they own the local
news franchise in their communities, this cautious, defensive
posture could leave them vulnerable the day (and it's coming
soon) when Google, Yahoo and others roll out more sophisticated,
tailored-to-the-individual information products with a local
mix.
An international comparison also suggests a relative complacency
in American newspapers. England is a very different sort of
market: predominantly national, highly competitive among a
dozen titles and reliant on single-copy sales. Starting in
late 2003 and continuing through 2004, all three of the high-end
papers - The Times, The Independent and The Guardian - have
begun conversion to tabloid format. Especially at The Independent,
first to convert, there was strong reader preference for the
tabs, a surge in circulation, and little or no diminution
of the paper's serious tone.
But the change involves enormous capital expense and a range
of complicated issues with advertisers. The Miami Herald included
a tab-shaped two-page news summary in its 2003 redesign. The
Fort Worth Star-Telegram and the St. Paul Pioneer Press (Knight-Ridder
papers, like the Herald) began experiments in 2004 with prominent
summaries in place of a conventional front page or page two.
But no U.S. paper of any size has changed over entirely; the
free youth papers are the closest to a test, and senior executives
have indicated little interest in the tabloid option.
A somber assessment of the state of news investment and public
service reporting also came during the joint portion of the
annual conventions of the ASNE and NAA in April 2004 in Washington.
The ethicist Matthew Josephson kicked off a panel discussion
pegged to the Jayson Blair and Jack Kelley controversies by
asking whether inadequate news-side resources were partly
at the root of a broader problem for newsrooms.
"That is a reality," replied Greg Moore, editor
of The Denver Post. "Either through attrition or budget
cuts, we don't have the resources as an industry to do the
job that we used to do or that we expect to do. Quite frankly,
when you talk about the potential for calamities, one of the
reasons for that …is that the supervisory level has suffered
the most."
Asked how he would grade the industry on its public service,
Moore said, "I'm a tough grader. I would say that we
are probably about a C+."
John Carroll, editor of the Los Angeles Times, said he was
fortunate to have a lot of resources (though like any editor
he could do more with more), but agreed with the C+. When
operations are bled for profit, he said, "they just squeeze
the life out of a paper, and it really is impossible for the
editor to make much headway….You are not paying salaries
or the people are turning over, and it is just a struggle
to get the thing out."
Jack Fuller, then running Tribune Company's newspapers and
Carroll's boss, took a more politic line. He was focused,
he said, on Tribune's own 12 papers and would give them a
B+.
"How would you grade your papers?" Josephson next
asked Tony Ridder, CEO of Knight Ridder and outgoing president
of the NAA.
"Well, I think it varies," Ridder said. "I
think it varies with the size of the newspaper. Some of our
larger papers have the resources to do a lot more. But I would
say it wouldn't be any higher than probably a C."
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