[Our regular contributor Martin Langeveld spent 13 years as a publisher in MediaNews Group. That gives him an inside perspective on the company's bankruptcy filing, which he shares with us here. —Ed.]

In August 2006, as part of a deal that netted MediaNews Group the Contra Costa Times, San Jose Mercury News, and the St. Paul Pioneer Press, the Hearst Corporation agreed to make a $300 million equity investment in MediaNews. At that point, the peak of MediaNews’ company’s expansion and with revenue and cash flow at an all-time high, the holdings of the principal stockholders — the Singleton and Scudder families — net of debt, were arguably worth more than $500 million each.

But last Friday, whatever was left of that equity, as well as Hearst’s stake (not finalized until a year later), evaporated as part of an announced plan to file a “prepackaged” Chapter 11 bankruptcy. For Hearst, it’s a hefty writeoff of a bad investment. For the Scudders, it’s a bitter payoff after nearly 25 years of active participation in MediaNews management. For MediaNews CEO William Dean Singleton and his financial wizard, company president Joseph (Jody) L. Lodovic IV, it’s a fresh start (which includes a 20 percent equity stake for the duo, and retained control of the company).

Could readers of the company’s papers now see new investment in its newsgathering capabilities, long hammered by budget reductions? For MediaNews employees, could this be an opportunity to participate in the transformation of the company into a truly digital enterprise? Both answers depend on what kind of vision is shared by Singleton, Lodovic, and the former bondholders who are now their equity partners. Keep reading »

[Yesterday, we showed how our Martin Langeveld's predictions for 2009 turned out. A few hits, a few misses, but lots of thoughts provoked. Here's his list of what we can expect in 2010. —Josh]

Newspaper ad revenue: At least technically, the recession is over, with GDP growth measured at 2.2 percent in Q3 of 2009 and widely forecast in Q4 to exceed that rate. But newspaper revenue has not followed suit, dropping 28 percent in Q3. McClatchy and the New York Times Company (which both came in at about that level in Q3) hinted recently that Q4 would be better, in the negative low-to-mid 20 percent range. This is not unexpected — in the last few recessions with actual GDP contraction (1990-91 and 2001), newspaper revenue remained in negative territory for at least two quarters after the GDP returned to growth. But the newspaper dip has been bigger each time, and the current slide started (without precedent) a year and a half before the recession did, with a cumulative revenue loss of nearly 50 percent. Newspaper revenue has never grown by much more than 10 percent (year over year) in any one quarter, so no real recovery is likely; this is a permanently downsized industry. My call for revenue by quarter during 2010 is: -11%, -10%, -6%, -2%.

Newspaper online revenue (included in the overall prediction above) will be the only bright spot, breaking even in Q1 and ramping up to 15% growth by Q4.

Newspaper circulation revenue will grow, because publishers are realizing that print is now a niche they can and should charge for, rather than trying to keep marginal subscribers with non-stop discounting. But this means circulation will continue to drop. In 2009, we saw drops of 7.1 percent in the six-month period ending March 31 and 10.6 percent for the period ending Sept. 30. In 2010, we’ll see a losses of at least 7.5% in each period.

Keep reading »

[A little over one year ago, our friend Martin Langeveld made a series of predictions about what 2009 would bring for the news business — in particular the newspaper business. I even wrote about them at the time and offered up a few counter-predictions. Here's Martin's rundown of how he fared. Up next, we'll post his predictions for 2010. —Josh]

PREDICTION: No other newspaper companies will file for bankruptcy.

WRONG. By the end of 2008, only Tribune had declared. Since then, the Star-Tribune, the Chicago Sun-Times, Journal Register Company, and the Philadelphia newspapers made trips to the courthouse, most of them right after the first of the year.

PREDICTION: Several cities, besides Denver, that today still have multiple daily newspapers will become single-newspaper towns.

RIGHT: Hearst closed the Seattle Post-Intelligencer (in print, at least), Gannett closed the Tucson Citizen, making those cities one-paper towns. In February, Clarity Media Group closed the Baltimore Examiner, a free daily, leaving the field to the Sun. And Freedom is closing the East Valley Tribune in Mesa, which cuts out a nearby competitor in the Phoenix metro area. Keep reading »

“Ten years ago,” says Mark Katches, editorial director of California Watch, “there were 85 reporters covering the California state house; today there are fewer than 25.”

Katches sees California Watch, which officially launched yesterday after a soft launch period and months of preparation, as stepping into a “big void in doing investigative work in California.” Katches has assembled the largest investigative team in the state: seven reporters, two multimedia producers, and two editors.

The site is focused on investigative watchdog journalism. It won’t cover the ins and outs of the California legislature or other governmental minutiae, aiming instead to “expose injustice, waste, mismanagement, wrongdoing, questionable practices and corruption, so that those responsible can be held to account and the public is armed with the information it needs to debate solutions and spark change.” Besides political topics, the site will cover higher education, health and welfare, and criminal justice. Keep reading »

The Texas Tribune lifts off this morning in Austin — there’s an election today — offering not only a slew of innovative features but also a unique content-sharing plan, by which the state’s legacy media can freely publish any content generated by the Tribune and dip into its multi-faceted information databases.

Tribune CEO and editor Evan Smith took me on a tour through the site last night, showing off what he and a staff of just 16 (plus some outside help from Austin design group FlashBang) have put together in just three months of ramp-up time. Smith points out that Trib (as it tends to call itself) is not just about journalism, but about information and context. And in fact, the depth of political information already offered on the site puts to shame the offerings of many metro newspapers with vastly larger reporting, technical and design resources than the Trib.

The Trib is offering all of its content as a “free syndication service” to print and broadcast media throughout Texas, as long as it’s credited to Texas Tribune. The reception of this offer, especially among the larger newspapers, has been cautious, Smith says, but has been welcomed by smaller papers without a statehouse staff of their own. The Waco Tribune-Herald has already published some Tribune content, according to Smith. Texas media will also be able to offer their readers access to Texas Tribune databases via apps they can embed on their sites.

On the Trib front page, Smith points out: Keep reading »

It’s hard to put a good face on this kind of news; in fact, it reminds me of the old “bus plunge” meme. The Audit Bureau of Circulations (ABC) reports that newspaper circulation for the six months ending Sept. 30 dropped 10.6 percent from the same period in 2008 (7.5 percent on Sundays).

And this is an accelerating trend. Here are the results for the three previous six-month reporting periods (in each case, versus the same period one year earlier):

— Oct. 1, 2008-Mar. 31, 2009: down 7.1 percent on weekdays, down 5.3% on Sundays
— Apr. 1, 2008-Sept. 30, 2008: down 4.6 percent on weekdays, down 4.9 percent on Sunday
— Oct. 1, 2007-Mar. 31, 2008: down 3.5 percent on weekdays, down 4.5 percent on Sundays

In each case, the decline was the worst ever reported by ABC. The bus-plunge, cliff-drop analogy will get additional support when the Newspaper Association of America’s third-quarter advertising revenue report comes out (typically at Halloween); it’s likely to continue the trend of the previous two quarters with a drop in the 20-30 percent ballpark.

The NAA has not provided positive spin on the circulation news (it usually distributes an internal memo with upbeat talking points for publishers), but last week it did report gains in newspaper website traffic along with this comment from NAA President and CEO John Sturm:

Newspaper publishers continue to aggressively reinvent their business models, leveraging trusted brands to attract a growing and sophisticated audience in the digital space. At the same time, industry executives have adopted smarter circulation strategies that are growing circulation revenues even though paid circulation numbers are lower. This places the focus where it belongs: retaining core readers who deliver maximum value to advertisers while harnessing digital platforms to broaden our medium’s audience and position us strongly for the future.

Keep reading »

During the last few months, as newspaper stock prices rebounded somewhat from  their lowest points, and as newspaper execs suggested, in conjunction with second quarter results, that having made all the cuts they did, they would be in good shape “once advertising rebounds,” I found myself nevertheless thinking the same thoughts as the crystal ball-gazers consulted by the New York Times who said that the bottom, for newspaper advertising revenue, had not yet been reached.

The good news is that the third quarter of 2009 won’t be quite as bad as the second: the consensus is that revenue will drop just 25 percent, compared to about 30 percent in Q2.  That means that even if the fourth quarter somehow manages to be dead even with last year’s Q4, revenue for the year will be down 20.4 percent.  But dead even would be a big stretch, because the first three quarters of 2009 will average about $6.7 billion, while Q4 of last year was $10.1 billion.  Typically, Q4 beats the average of the first three quarters of the year by about 22 percent in good years, less in bad years.  Even with the benefit of the doubt at a 20 percent differential (Q4 vs. the average of Q1-3), that puts Q4 at $8.1 billion (down 20 percent from prior year) and the full year 2009 at $28.2 billion, down 25.5 percent from last year’s $37.8 billion. (My recent guess for the year stands at $27.5 billion.) For newspapers to get to  around $28 billion for the year, however, advertisers would have to invest in newspapers in Q4 with the assumption that the recession is mainly over and that consumers will be loosening purse strings significantly during the holiday shopping period.

Keep reading »

Without the fanfare that accompanied the recent release of its online readership data, the NAA quietly posted last week its latest compilation of quarterly revenue data for U.S. daily newspapers, in a data set it has maintained for 50 years. The latest figures, for the second quarter, show an alarming drop of 30.15 percent in print revenue and 15.90 percent in online revenue versus the same period in 2008. Despite signs elsewhere that the recession may have bottomed out, these figures are even worse than the first quarter results (declines of 29.70 percent in print and 13.40 percent online).

Alan Mutter, the Newsosaur, analyzes these numbers by category and projects that for the full year 2009, combined print and online revenue will be “no more than $27 billion” — and worse if the economy doesn’t pick up —  a drop of more nearly $11 billion from 2008’s $37.8 billion. My guess is slightly higher: print revenue of $25 billion; online revenue of $2.5 billion, total $27.5 billion — a drop of $10.3 billion.

How did this happen to an industry that in 2005 garnered record revenue of $49.4 billion ($47.4 billion of it in print)? By adjusting the historical numbers for inflation, as Mutter did, the industry is half the size it was in 1986, when it scored $52.3 billion in 2008 dollars. But that doesn’t paint the whole picture.

A better way to look at the historical revenue record is to place it in the context of total advertising expenditures across all U.S. media. I’ve done that, and here’s what it looks like:

(Click here to see a larger version of this chart.)

That ever-declining line of dark blue diamonds is the newspaper share of total advertising expenditures. In other words, with very few plateaus or upticks, newspaper share of market dropped steadily since 1949 (and even earlier – the peak was actually in 1933 with a share of close to 50 percent), and in the last few years the steady decline has become a precipitous one.

Keep reading »

A scenic ride along the Connecticut River valley from my abode near Brattleboro, Vt., on the New Hampshire side of the valley, is the city of Claremont — a typical New England mill town with a population of 13,000, a regional hospital, a state college branch, a relatively sound local economy (unemployment rate of 6.0 percent), and until last Friday, a local daily newspaper with a circulation of about 7,800, the Eagle Times.

But on Thursday, Eagle Times owner and publisher Harvey Hill threw in the towel, after subsidizing losses in his operations to the tune of “seven figures”.  He gathered his employees and announced that Eagle Publications was filing for Chapter 7 bankruptcy (some were told by e-mail), that Friday’s edition of the paper would be its last, and that the company’s three weekly publications would not publish any more issues. Chapter 7 means the company is heading for liquidation, not reorganization.  (Note: links to the newspaper’s web site may not last much longer.)

Locally, the big concern is what will move into the void. At least one entrepreneur has a plan (after the jump). But more broadly, the big question is what the Claremont situation portends for small “community” newspapers — both weeklies and dailies — across the country.  The conventional wisdom has been that it’s primarily the big metropolitan newspapers that are in trouble; that papers in smaller markets remain profitable, if less so than in the past.

An Inland Press Association study cited by Alan Mutter, the Newsosaur, in several recent posts suggests that papers under 15,000 in circulation have seen revenue grow slightly from 2004 to 2008, while suffering a 64.8% drop in profits. But the study is based on data from only 120 newspapers of all sizes, and may not have a representative sample of papers in any particular size group.

Keep reading »

You have to admit, Gannett Blog kind of jumped the shark.

When Jim Hopkins got started with it, Gannett Blog was a useful compendium of news, gossip, tips and analysis about the country’s largest newspaper publishing company, and occasionally he would uncover something nobody else had noticed, like CEO Craig Dubow’s self-serving direction of $40,000 in Gannett Foundation money to an endowed scholarship, in his and his wife’s names, at Western Carolina University.

But lately the site has degenerated into a rather odd mix of self promotion, beefcake, travelogue from Ibiza, more beefcake, and a countdown toward oblivion, which is slated for Friday.  Time’s running out! You have just two days left to comment!

Hopkins is redirecting his traffic to Gannettoid, which started up in December.  Gannettoid is not a blog; its content lacks clear dates, so it’s not clear that it will be as useful to Gannettoids as Gannett Blog was, at least before it succumbed to self-admiration and hype.  Until recently it lacked commenting, as well, but it has recently added a forum for discussion.  Maybe it will get around to RSS, also.

Not every major newspaper group is favored with a meta-site where employees and others can get the latest news, leaks, gossip and analysis on their favorite company.

MediaNews groupies can turn to MediaNews Monitor, operated by the Newspaper Guild-CWA, which doesn’t do much reporting of its own, but links to stories and blog posts published elsewhere. Keep reading »