Journal’s -30-

Charlie Sykes, an employee of one of the separate halves of the late Journal Communications (as I used to be):

With the news that the new company that owns the Milwaukee Journal Sentinel will be sold to Gannett, the question arises: what happened here? What killed the JS? What happened to a newspaper that was once as well-established and entrenched as any major metropolitan newspaper in the country?
Obviously there is the economics of the industry, which have affected newspapers across the country, the rise of Craigslist (which killed off classified advertising), the rise of alternative media, and the decline of print. But other factors were also at work.
While the paper was still capable of outstanding journalism on occasion, (Raquel Rutledge, Craig Gilbert) the paper also shifted away from local news coverage to the pursuit of prizes that burnished the resumes of newsroom insiders, while neglecting the actual needs of its readership. Couple this with editor George Stanley’s obsession with narrative journalism and the paper had a formula for alienating a growing portion of their potential (and former) readership.
Even as the staff was dwindling through layoffs, buyouts and retirements, many of the paper’s best and brightest reporters and editors were shifted from daily news coverage to quasi-opinion journalism (Politifact, Dan Bice). The result was that in an area that is striking for its political polarization, the paper really gave up trying to appeal to conservatives except in the most token ways.
“There are very few businesses that have so misunderstood their own market and remained in business,” notes local columnist James Wigderson.
While the newspaper was off pursuing prizes or trying to put Scott Walker’s head on a pike, stories that the public would really be interested in were left ignored. For example, how many resources were spent trying to prove a type of plastic is dangerous just to win a prize that nobody in Milwaukee cared about, and then the story turned out to be flawed? By the way, when do they get around to reporting that?
So while they assigned staff to vanity projects like Politifact, they stopped covering the surrounding communities. I think the kid that covers Waukesha finally got his driver’s license. By the way, those are the communities that actually read newspapers.
But the story is complex and a forensic examination of its long decline requires looking back at the paper’s history. An insider — we will call him G. K. Curmudgeon — offers this analysis:
A key policy that was problematic: Employee ownership. This looked beautiful for decades — kept the paper out of the hands of chains, especially the Hearst chain that owned the Sentinel until 1961 — and it allowed pressmen to retire as, literally, millionaires. It was a model of participatory capitalism, and a homegrown one.
But to buy the shares, employees went into debt, until, by the turn of the century, much of the company’s stock was owned by people deeply in hock. What’s more, it made it hard for the company to use shares to expand by buying other properties.
So the company converted to public ownership in 2003 in what turned out to be a wretched time for making money as a newspaper company. The paper, in fact, was seen by the market not as a reliable informer to a greater share of its market than nearly any other mid-market metro daily but, instead, as the spinster aunt weighting down the pretty broadcast properties. The editors tried for a game-changing move, a grand slam. That meant devoting newsroom resources to potential prize-winning series that took teams of reporters months to put together — instead of covering the school board and City Hall with the thoroughness that readers expected. The Journal Sentinel subjected its newsroom, long insulated from economics by the miracle of the Journal stock plan, to those harsh economic forces at the very moment that things were going very badly sour for the industry:
 So instead of being better at the one thing that no other news outlet could do — having the most coverage on nearly everything that people usually care about — it tried being spectacular at being able to say it won more prizes than practically everyone but the New York Times at exactly the moment that Milwaukeeans (and the advertisers wanting to reach them) were questioning the value proposition.
Result: Multiple rounds of buyouts and a newsroom half the size it was six years ago.
About the time the company went public, it was correctly boasting that, while the largest newsroom in Wisconsin was at 333 W. State St., the second largest was its Waukesha bureau, with something like a dozen reporters. That meant that the economic center of southeastern Wisconsin, the place with the highest concentration of homeowning families in the habit of reading a paper in the morning and shopping at the stores that advertised in it, was covered with unparalleled thoroughness by a huge news staff that lived there. It was a news staff, what is more, unusually composed of veterans kept around by the economic power of that magical Journal stock plan — so the people writing and editing were generally better than any possible competition. The Oconomowoc School Board could not sneeze without 12 inches of reportage the next morning, and good coverage at that.
No more: That bureau is gone. Waukesha County is covered from downtown Milwaukee by a much diminished staff. Ozaukee County once had its own bureau — now gone. There was a nascent Racine County bureau — also gone.
So why bother reading? For the occasional multi-part drumbeat about chemicals in your water bottles? And if there are fewer readers, then fewer advertisers show up, and that is where the great majority of the money comes from. Or came from.
Not that employee ownership was a bad idea. But its isolating, insulating effects — it is hard to express how insular and self-referential the Journal Sentinel newsroom was as a result of a stock plan that strongly discouraged people from ever leaving — meant the paper was not prepared for the industry’s secular downturn. And its badly timed end meant that the ill-prepared newsroom was exposed to that downturn in an economically vulnerable way. The paper’s quality effort to go online did not produce results sufficient to reverse this. Its attempts to branch out — the heavily resourced Mke entertainment tab, for instance — did not pan out. And its core strategy left its basics neglected — as if Wall Street Journal decided to abandon all that boring business coverage.

I don’t buy all of this, but most of it makes sense, particularly going away from the boring stuff — you know, news — in search of awards and channeling your inner Woodward and Bernstein and bringing down a governor, which rather backfired on them.

I’m not sure that employee ownership had much role in the Journal Sentinel’s problems, though the end of employee ownership certainly did. If you have unmotivated employees who refuse to leave because they have stock in the company, a manager’s role is to get them off their dead butts, or get them out the door. Certainly in my corner of the Journal Communications empire nonperformers were shown the door, both sales representatives, managers and even people with titles.

That’s not to say that the ESOP Journal was necessarily a paragon of business management. When I was merely an employee, and then my last year as a manager, I was always mystified at corporate’s emphasis on revenue. Not “profit,” which, remember, is income minus expenses, but the money coming in. Certainly a chronic money-losing manager would not be employed long, but it always struck me as strange that there was such emphasis on making your revenue forecasts, and not as much on generating black ink instead of red ink.

(A former coworker of mine reminded me last week that he was told by a vice president that if he were ever offered a manager position he should refuse it. I forgot that advice, which made me the first and last publisher/editor of Marketplace.)

In the weekly newspaper/shopper/specialty corner of Journal Communications, I saw two bad things happen. First was the premature closing of a venture called Fox Cities Newspapers, five startup weekly newspapers around the purchase of two weeklies. Too much money was spent on a new office for all of us and stuff (pens, notebooks, billboards, a big public introductory event, etc.), but I think the venture would have been successful eventually. However, 9/11 and the following recession happened, and the newspapers were shuttered. (The previous owners ended up buying the existing newspapers.)

The other was a non-happening. Action Publications was a shopper and printer that was better regarded in the Fond du Lac area than The Reporter, the daily newspaper first owned by Thomson Newspapers (which was to journalism what the Yugo was to cars), and then Gannett. Had we been successful in buying Action upon the owner’s retirement, Action would have filled a hole in our footprint and, even better, prevented Gannett from getting rid of its competition (even though Action Advertiser still exists). Unfortunately, Action sold to Gannett, not us.

The money Journal raised from going public went to buying only broadcast properties. As I wrote last week, that ended up benefitting Scripps, which “merged” with Journal’s broadcast half, and not the print side at all.

The aforementioned Wigderson added on his own blog:

With the expected purges (“the deal will yield about $10 million in immediate savings and the potential for $25 million more over the next two years”), news coverage of Wisconsin will certainly change. Even the sports department will probably not be immune since Gannett already owns the Green Bay Press Gazette. How many Green Bay Packer reporters does one newspaper chain need?

By the way, anyone hoping for a more conservative newspaper obviously hasn’t picked up a local Gannett product. They’re not going to be bringing a standard of unbiased journalism or high ethical standards.

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