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Newsonomics: Is Tronc about to go on the market?
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Jan. 18, 2018, 9:48 a.m.
Business Models

Newsonomics: Inside L.A.’s journalistic collapse

Southern California has gone from five significant daily newspaper companies three years ago to two today. And they’re both in trouble.

How far is The Post from Los Angeles? Figure almost 50 years, as well as 3,000 miles. While big audiences and the remaining fully paid journalists can delight in the triumphant Spielbergian tale of The Washington Post’s decision to follow The New York Times in publishing the Pentagon Papers in 1971, the grim reality of daily newspapering in 2018 grows grimmer each week. While Jeff Bezos’ Washington Post serves as a wonderful contrarian model of business, product, and staff growth, 2018 looks like a year of great reckoning for much of the America’s 1,350 daily newspapers. That’s especially true this week in the greater Los Angeles area.

There, the newspaper drama, which I’ve covered for years at the Lab, intensifies. In southern California more widely, including San Diego, where five significant daily newspaper company owners existed only three years ago, there are now but two. Those survivors, Tronc and Digital First Media, both grapple with the further industry-wide loss of advertising revenue. This week, DFM’s Los Angeles News Group has acknowledged yet another set of major layoffs, while Tronc management, sources tell me, outline their own next set of job reductions, which have occurred serially over time. Meanwhile, the region’s other media — from the just-sold and now denuded L.A. Weekly (the whole cannabis-driven story here) to the recently and abruptly shuttered LAist — reel from cutbacks.

“It does feel like there is something bad happening,” Kevin Roderick, publisher and creator of LAObserved, which covers L.A. politics, media, and more, told me Tuesday.

“The environment that we’re talking about is trying to cover this place — 88 cities, and that’s just L.A. County,” says Roderick, who spent 25 years at the Times before founding LAObserved in 2003. “Then you’ve got four other counties. We’re talking about shifting away from covering anything to do with these 88 cities and thousands of school boards and local politicians, who have been inflating the ability to be corrupt without being watch-dogged much.” That fundamental mission of newspapering is eroding ever more quickly in the nation’s second-largest metro area.

The known big event on the calendar comes Friday. On Friday morning, at 10 a.m. on the 9th floor of the National Labor Relations Board’s Region 21 Office, at South Figueroa and 130th, representatives of the Guild and Tronc’s Los Angeles Times, will watch the count of newsroom ballots for and against Guild representation of the newsroom. The notion of a unionized L.A. Times may be roiling long-time publisher Otis Chandler’s final resting place. But it may also signal both new opportunities for the Guild and more issues for financially struggling Tronc. Today, only Tronc’s Baltimore Sun and several of its Chicago-area smaller titles have union representation. Expect that a positive vote in Los Angeles may lead to the newfound Guild confidence, and a set of organizing wins, at some of Tronc’s other 11 titles. That it would further an under-covered trend, the unionization of newsrooms legacy and new (consider the recent vote at Vox to join the Writer’s Guild of America East), picking up speed in the wake of the uncertainty brought by digital disruption.

At the Times, Tronc’s turmoil — which was preceded by Tribune Publishing’s turmoil, which itself was preceded by the five-year bankruptcy hangover associated with the brief Sam Zell era of Tribune newspaper ownership — has clearly driven the passion of the unionization movement. “I’ve seen five publishers in five years,” union leader Matt Pearce told me Wednesday. “We want to see some stability for our staff,” says Pearce, who works as a national reporter for the Times and is a member of the local organizing council. It’s no surprise that better communication and transparency are among the Guild’s objectives in L.A. In addition, issues include 1) cost-of-living raises; 2) higher minimums, especially for reporters hired and retained through the Times’ MetPro diversity program, and 3) a say in such decisions as to the siting of the Times’ next office. In 2016, its office and the land under it was sold to make way for condos and offices in downtown L.A.

“We’re also concerned about the stewardship of [Tronc chairman] Michael Ferro,” says Pearce, citing, among other points, the agreement Tronc announced not long before the union vote that provides Ferro’s investment vehicle a $15 million, three-year contract for consulting. “We’ve seen what’s been happening at The Washington Post, under Jeff Bezos, and we’d like to see the Times build on its history, too.”

Mum’s the word from Los Angeles Times management, as the vote tally approaches. Last week, editor-in-chief Lewis D’Vorkin told me, when asked about upcoming management hires, “It’s not something I can talk about, until the union vote is resolved.”

On that topic, I can add further clarity to last week’s report. In that Lab story, I noted unannounced top newsroom management hires. While those hires are still unannounced — despite the fact that the Times’ journalists have asked their own management what they mean, given that the hiring leaked through a human resources system visible to all employees — I’ve learned more on the scope of new managing editor Louise Story’s position. Story, a well-regarded hire from The New York Times, will indeed become a managing editor. However, she will be based in New York City, where she lives, and her role includes Tronc-wide responsibilities. Story will lead a team of at least a dozen journalists, a new national Tronc investigative and/or enterprise news team. It’s so far unclear the nature of Story’s relationship with Tronc’s newsrooms or their editor/publisher leaders. Could she be taking on a major Tronc role — similar to the one Joanne Lipman recently left at Gannett — with wider responsibilities for Tronc content? Neither Tronc nor Story returned inquiries on the appointment, which I’ve had verified by multiple sources. A “gag order” — something that seems like an oxymoron for a public-facing, public-serving news company to adopt — apparently has stilled any comment.

The Times’ new management — which includes The Washington Post’s Sylvester Monroe and long-time Forbes editor Bruce Upbin as assistant managing editors — will confront many issues as it is re-organized by D’Vorkin. The newsroom, long a fractured place, must be given a new vision of Times editorial strategy, one that will certainly be greeted with at least journalistic skepticism. About the same time, the newsroom contingent of more than 400 will hear how many more jobs Tronc plans to cut as an anxious 2018 sets in. Last year, print advertising revenue, say sources, was down approaching 20 percent.

“This Sunday’s paper was extraordinarily thin to the point, that people were emailing me about how thin it was,” says Kevin Roderick. “There are no ads there. If they are still making a profit, it’s not from anything that print paper’s bringing in, because there’s nothing there. It’s house ads most of the time.”

For a single-class public company, like Tronc, that collapse of advertising mean more cost-cutting is inevitable to satisfy the profit expectations of shareholders.

The wider L.A. environment tells that story. Just this week, DFM’s Los Angeles News Group acknowledged that it would lay off more newsroom positions, following last summer’s buyouts. That means LANG will cut more than 65 positions among its eleven local dailies, anchored by the Daily News and the bought-out-of-torturous-bankruptcy Orange County Register. (Ironically, a bankruptcy court allowed DFM/LANG to buy the Register last year, citing, in part, its ability to maintain the Register as a local news company.) That means that a company that as recently as mid-year 2017 paid 380 daily journalists will now pay no more than 250. Already, many of the remaining newsrooms have been described by visitors as “skeletal.” Soon, archeologists may be required to find the bones.

That descent is matched in DFM’s operations in northern California. There, too, a new round of buyouts will cut jobs, leaving the Mercury News — once a top-10 daily — with a newsroom well less than a quarter of its at peak 400-plus staffing.

In fact, Digital First Media’s meltdown seems to be growing by the day. On Wednesday, Denver Post publisher Mac Tully surprised both his staff and DFM management by resigning.

“I’m not ready for retirement yet,” he wrote in his farewell note to staff, “but after 40 years in the industry I’m ready for something a little less stressful. I’ll miss the stellar and most talented people I’ve had the great fortune to work with at The Post and throughout the rest of the company. I’ve always believed the only real asset is your people and I’ve been blessed to work beside some of the best in the business. My last day will be January 31st.”

In L.A., who is filling the vacuum left by all the newspaper layoffs and buyouts?

“[L.A. public radio station] KPCC is a pretty important part of this local news scene now because, they will cover some government institutions, and they’ll just cover some news that isn’t going to go viral on the web. It just needs to be covered,” says Roderick. “There are TV stations that are doing the same thing. I think they become a more important part of the mix. Like everywhere, stations here have always taken their lead from the L.A. Times. I haven’t seen anybody picking up institutional coverage, but they all — you know how it goes in cycles — they all seem to have an investigative reporting now, and doing the relatively quick gotcha stories. KNBC has a pretty active investigative team right now, as does CBS LA, which is called that because it’s two stations here. They have a pretty active team, and they promote their investigative team really hard. So they’re doing things. And The New York Times definitely has a presence here.”

On Wednesday, KPCC did a five-minute segment headlined “Save the presses! Southern California news is in danger,” for which I was interviewed. Host A Martinez asked about the business realities of publishing, and then asked a fundamental question: “What can citizens do?” That’s getting to be a more profound question day by day. In truth, in few cities, including L.A., do they have strong alternatives, though KPCC’s work is promising.

One thing citizens have long done: subscribe.

When companies like Digital First Media continue to cut deeply into the staffs and products, readers notice. (Even the L.A. Times — still housing the largest metro daily newsroom in the country — has shed 54,000 daily subscribers in the last three years.) And, to add insult to reading injury, price increases seem to be landing on subscriber’s doorsteps with increasing ferocity. Newspaper products that offer far less than half the content they did just five years ago now cost twice as much as they did then. The paid circulation declines of the DFM papers show that damage, with deeper losses than the industry average. My sense is that the conversation about finally “dropping the paper” is becoming a more common one, even in the most civically engaged households.

Photo of the 101 freeway in Los Angeles by BLK ART used under a Creative Commons license.

POSTED     Jan. 18, 2018, 9:48 a.m.
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