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Oct. 21, 2016, 12:37 p.m.

Newsonomics: Here are 10 storylines we’ll be talking about into 2017

The next generations of Murdochs and Sulzbergers step up, two newspaper chains chart the consolidation of the industry, and a Trump-driven shift in straight news reporting.

It’s been a remarkable year for the nation, and its press. Transfixed by the Trump phenomenon, election anxiety has all but consumed us. But soon, what has felt like a national colonoscopy will soon be over, and the press will march (or at least step) forward. As we consider the most newsworthy U.S. press happenings of this year, let’s start projecting forward to 2017. Tronc may well disappear early into it, but in a sons-also-rise scenario, the Murdochs and the Sulzbergers maintain center stage, and the future of Gannett and GateHouse — two companies that collectively own almost one in five U.S. dailies — becomes even more important. Let’s take 10 storylines of 2016 and extend them into the year ahead.

1The next Gannett

How big will Gannett become? CEO Bob Dickey has set a 130-property-plus goal for his company. And with a buy of Tronc (the former Tribune Publishing), he’d be within buying distance of that goal. As Gannett gets bigger though, it also gets smaller. Expect the company’s announcement of a “significant” headcount reduction, perhaps as soon as next week, several confidential sources tell me. Like its peer companies, Gannett won’t have great performance to announce on its third-quarter earnings call Thursday. Revenues — driven by mid- to high-single digit print ad revenue declines — will be down. We’ll see what the company can announce in profit, given this year’s prior cost reductions.

Investors have driven Gannett’s share price down more than 30 percent since it announced its Tronc pursuit, a bigger loss of value than its peers. For them, the question is, as always, “what will you do for me tomorrow.” So expect Gannett to announce its pledge to move more quickly to reduce costs in 2017. Newsroom staffing won’t receive a reprieve, with one editor reporting a coming 10 percent newsroom cost cut; other papers, I’m told, may see cuts in the 5 percent range.

As to Gannett’s acquisition of Tronc, that deal, which I was told was “imminent” at the start of October, should still happen. Let’s now go with “soon,” given the hangups those close to the action describe. We know that final due diligence — the review of contractual obligations receivable and payable, for instance — is underway. Lawyers are being blamed for the slow action. As I noted earlier, one explanation could be a strategy straight out of Monday Night Football: running out the clock. Tronc chairman Michael Ferro’s ownership group, Merrick Media, formally took its stake in the company in early February. If one year ticks by before it sells that stake, its tax hit on a sizable payday is reduced.

2The House of Murdoch in transition

This peculiar chapter in U.S. history will include, as a footnote most likely, the dalliance between the houses of Murdoch and Trump. Rupert tweeted and signaled various approvals early on, and then saw his prize Fox News Channel riven by Gretchen Carlson’s successful challenge to Roger Ailes’ sexual harassment. That Ailes has gone on to advise Trump (though they’re apparently taking a break) only further reinforced the unique politicization of media that Murdoch imported into the U.S. from the U.K.

We know that 2017 will mark a year of transition for Fox News, as it strategizes around the various challenges of Clinton II, an older audience, and digital disruption. But the Murdoch in direct charge of how the channel will now position itself isn’t Rupert. Sons James and Lachlan have emerged. Applying some of the lessons of the family’s last crisis, Hackgate, the duo moved quickly to push out Ailes and create a through-the-election interim plan. Now, it’s onto the long-term plan. As Murdochs fils plot, they’ll see whether the potential monster competitor that they helped enable, a would-be Trump-fronted DNN (Deplorables News Network) actually takes shape, post Nov. 8. (Fox: “Hey, those are our deplorables!”) Regardless, the younger Murdochs know they’ve got to deal with the oldest demographics in an old-viewing business, and where Fox News fits into a new zeitgeist that no one can yet grok.

Yet, the billion-dollar profitable FNC is only one of the Murdoch’s challenges. It’s hard to say this has been a good year for The Wall Street Journal. In a political year that has redefined the American press, it’s been largely missing in action, to the chagrin of many of its industry-leading journalists, a Trump Slump. While a couple of its editorialists have decried Donald Trump’s fake conservatism, the institution hasn’t known how to deal with the phenomenon. Then on Wednesday, Dow Jones CEO Will Lewis announced a Wall Street Journal “2020 Review” to “trigger a transformation program designed to modernize the newsroom.”

Modernization is one thing; announcements of such modernizations at a newspaper company do seem like really old news at this point. The bad ad market is another. Just two years ago, Lewis, who brought the Journal back to sanity from the catastrophic regime of Lex Fenwick, made a major point of his company reaching the 3 million subscriber level. By one count, the Journal — with Dow Jones’ Barrons included — has reached the 2.5 million mark, but that’s an increase of just 200,000 in two years, well short of the target. While the Journal has innovated smartly with several B2B niche products, its consumer product development still seems profoundly stuck. In the innovation game, it continues to fall farther behind its rival New York Times.

If New York, with the forever financially failing New York Post, is tough for Murdochs, the U.K. is tougher. Across the board, papers there are suffering 15 percent losses in print advertising — almost double the dismal loss U.S. dailies are seeing.

There remains one bright twinkle in Murdoch eyes. Hackgate seemed to foreclose the family’s ability — through 21st Century Fox — to gain majority control of prized Sky, in which it holds a minority 39 percent interest. As Brexit and more fuzz up British memories, the Murdochs are readying a new bid for Sky, as James Murdoch once again becomes chairman. One thing about the Murdochs: Their stamina out-distances almost everyone else in industry. Must be in the genes.

3The Sulzberger handoff

It may sound like a tricky football play. The New York Times wrote the long-rumored next chapter of its family saga this week, as A.G. Sulzberger, son of publisher Arthur Sulzberger, Jr., was appointed deputy publisher. “Deputy” as in heir highly apparent, given the Times’ practice/policy of ending tenures around the age of 65, Arthur’s age.

If we think of proud families, we talk of the Murdochs, Sulzbergers…and Corleones. Yes, I know different business, and now far less lucrative. But recall Vito Corleone telling son Michael he’d hoped to transition the family’s business more fully before turning it over to him — but that he couldn’t get there. That’s the Times today, as it transitions and transitions. The truth is that the Times has weathered the Internet’s disruptions relatively well. But it still must find at least one more good trick to make it through to a sustainable, digital-centric future. Even today, only a third or so of the Times’ revenue is driven by digital (though that’s among the highest in the industry). A.G.’s task, working with CEO Mark Thompson on the company’s own 2020 plan, will be to find that trick. Previous generations came up with two key tricks that transformed the Times into the powerhouse global outlet it is today. First, came national distribution, and second came its innovation of the paywall, which now helps the Times lead the industry with almost $6 of every $10 in revenue coming from readers. In 2016, the Times has contemplated a number of third-revolution ideas — but it’s not yet close to finding one that it knows will work.

4The year of living courageously

Donald Trump has wrought a little revolution in the U.S. press. New York Times executive editor Dean Baquet summed up succinctly in my Lab interview a few weeks back: “I think that [Trump] challenged our language. He will have changed journalism, he really will have…We didn’t know how to write the paragraph that said, ‘This is just false.’ We struggle with that. I think that Trump has ended that struggle.”

It’s not only the Times that deserves plaudits for stepping up to this unprecedented challenge. The Washington Post and CNN both have found new voices, ones with greater assurance and authority to cut through the he said/she said that has afflicted the news business (calling Jay Rosen) for at least a half century. These companies have found a bit of swagger, and while the line between swagger and arrogance can be thin, some swagger is better than none at all. Just as Rupert Murdoch politicized U.S. news when he brought his Brit tabloid sensibility to TV with Fox News, the Times and the Post now seem to resemble The Guardian, if only to some degree. It’s totally unpredictable how readers — and potential readers — will find this new attitude post-election, but it may signal a profound change in the American press. Similarly, we’ll have to try to gauge the impact of conservative editorial pages across the country — at The Dallas Morning News, the Houston Chronicle, The Cincinnati Enquirer and The Arizona Republic among them — on the election with their endorsements of Hillary Clinton. If big local journalism operations are to survive — and that jury is profoundly out — my sense is that their products must speak more honestly and less equivocally to their audience. Otherwise, no new business model may save them. Clearly, the Trump and Sanders phenomena display a wide passion for dealing differently with a stuck status quo, and not just in Washington. That’s a big opening for local media that can use its talents appropriately.

5What SNL has — and hasn’t — wrought

Even as the phrase Trump has gone “full Baldwin” moves gloriously into the language, Malcolm Gladwell challenges us with what we believe is the power of political satire. In the final episode, The Satire Paradox, of this season’s highly popular Revisionist History, Gladwell described the work of academic Heather LaMarre and writer Jonathan Coe (“Sinking Giggling Into the Sea”). The bottom line: Surprisingly, conservatives saw an entirely different Colbert Report than progressives did, both seeing in their laughter the affirmation of their own beliefs.

The research and the thinking does challenge our sense of the importance of such shows, though I’m more interested in what we can call the journalist/comic continuum. In 2008, it was Katie Couric and Tina Fey, in some strange combination, that alerted the nation to the utter strangeness of Sarah Palin. In 2016, it may be the Megan Twohey (of The New York Times) and David Fahrenthold (of The Washington Post) and Alec Baldwin that capture the essence of Trump. Jon Stewart — the ultimate I’m-not-a journalist-I’m-a-comic tweener — deserves credit here as a godfather. His spawn, especially John Oliver — with one of the best journalism-like shops behind him — and Samantha Bee, have newly (and hilariously, and effectively) further blurred the lines.

6Now that’s a public/private partnership

Many have already forgotten the story of Sheldon Adelson’s takeover of Nevada’s biggest daily, the Las Vegas Review-Journal, even though it only happened last December. One big question: How would Adelson use his influence?

Last week, the country got a peek at his newfound power, a sense that those of us who don’t live in Nevada don’t get regularly get. In a special session of the Nevada legislature, called by Gov. Brian Sandoval, the state committed $750 million in taxpayer funds to make Las Vegas a proud NFL — Las Vegas Raiders — city. Who brokered the deal? Adelson, according to the Wall Street Journal, was square in the middle of it, and will invest $650 million in the project. Stadium construction, a profoundly uneconomical use of taxpayer monies, is particularly egregious in states like Nevada (ahead of only Mississippi, Arizona, Utah, Oklahoma, and Idaho in per-pupil education spending). But it’s great for Adelson’s big business, gaming. We’ll soon see how Nevada, one of the purplest states, moves in the election. As Democrat Catherine Cortez Masto contests Republican Joe Heck, strongly endorsed Wednesday by the R-J, for Harry Reid’s open Senate sat, the fate of Senate control could lie in the vote.

7GateHouse gets its house in order

Adelson’s purchase of Nevada’s most influential daily was concerning. But so was GateHouse Media being willing to sell it to him — self-inflicted damage. Literally making a highly profitable quick buck with a devil of a buyer, GateHouse never adequately explained how it ordered up journalistic malpractice on a judge presiding over a case involving Adelson. It was an embarrassment beyond embarrassment for any self-respecting journalism company. Then, late last month, the company finally moved to fix the wound. It appointed Bill Church, a well respected top editor at its Sarasota Herald-Tribune (and recent Nieman Knight Visiting Fellow), as its first senior vice-president of news. It’s a doubly welcome sign. Church served as a significant player in that bizarre judge-investigating disaster; he’s the GateHouse editor who said no when asked to take it on, from 2,500 miles away. Further, while we don’t know what kind of sway Church will really have in the corporate offices of the fast-changing, consolidation-focused GateHouse, the appointment itself is a small sign that the company understands that is more than a vehicle for funder Fortress Investments to wring profits out of a declining industry. GateHouse Media, let’s remember, operates more dailies than other company in the country. As the newspaper industry continues more rapid consolidation, both the “new Gatehouse” and the “new Gannett” are worth watching.

8Declaring Independence from print

With those deep print ad losses in the U.K., all the press is reeling. Except, apparently, the new digital-only Independent, which reels newsprint off presses no more. The paper dropped print six months ago, and Monday announced its first profit in 20 years of operation.

Of course, digital-only “papers” can be profitable; the question is how large — and good — a newsroom they can support. Remember the Seattle Post-Intelligencer that made that transition in 2009. In that case, the digital-only publication still exists, but as a shadow of its former self, and not a major player in Seattle.

In 2017, publishers will be looking whether The Independent establishes new ground. Maybe it will, but it’s fairly unique ground. As a national newspaper in Britain, where the national press is disproportionately dominant in a relatively small geography, it can draw on much bigger potential audiences than a regional publication. Its new numbers are intriguing, and we’d like to know more about “profitability,” with disclosure of deeper numbers. But even assuming it’s a real profit, we see a big tradeoff. In the transition, The Independent cut half of its newsroom staff, including much of its experienced (and higher paid) staff. The old Independent, indeed an independent-streaked pub that broke early on with some journalistic orthodoxies, is gone. From afar, it’s tough to see the impact of that, but observers report a different experience. And that’s the crux of the issue here for other publishers: Can they make such a switch and still retain the essence of what they are, have been, and want to be to their readers? That’s an identity question now that will confront more publishers soon.

Finally, the vagaries of dependence on digital advertising remain worrisome. With Google and Facebook ever more dominant, claiming 85 to 90 percent of all new digital spending, The Independent has made itself more dependent on digital advertising, while many of its peers believe (rightly, I think) the best route to sustaining the newsrooms and editorial spirit is reader revenue.

9Time Incs., new and old

How many lives can Time Inc. live? As both CEO Joe Ripp (who left last month) and CFO Jeff Bairstow (who exited unexpectedly this week) exit, the former lion of American magazine publishing is in for yet another strategic rethink, as new CEO Rich Battista promises an entrepreneurial restart. Consider the Time Inc. model, one that worked so well for so many years: Assemble a broad group of titles serving different audiences (and often differing advertisers) under a single corporate structure, achieving the synergies of both mass and niche. In print magazines, for Time, Condé Nast, Hearst, and Meredith, it worked remarkably well for so long.

As Jim Bankoff and Marty Moe invented Vox Media, they borrowed that Time Inc. metaphor for digital startups, as did Nick Denton in building Gawker Media. Now as we watch industry stalwart Raju Narisetti shape the new Gizmodo Media Group — the former Gawker properties now owned by Univision — we’ll see how much the old Time Inc. model works in this new Google/Facebook-dominated digital era. “Synergy” is the holy grail, but parsing its new meaning in these fast-changing times usually proves easier on a whiteboard than in real life.

102017’s must-reads

Okay, confess: How many times a day do you check The New York Times’ Upshot, or Nate Silver’s FiveThirtyEight, or The Huffington Post’s Poll of Polls to see the Clinton/Trump odds? You’re not alone. Yes, these are anxiety-driven must-reads, but they’re far more effective than the old daily newspaper could be. In that world, the most views a news company could count from a customer was one. So, there’s a challenge: What is it in readers’ daily lives that could encourage similar — if not as similarly manic — behavior. National or local. Remember, it doesn’t have to be just “news.” Whoever figures out similarly addicting behavior post-election gets bragging rights at reinventing the essentiality that can propel a next generation of sustainable news companies.

Photo of question marks on pavement by Véronique Debord-Lazaro used under a Creative Commons license.

POSTED     Oct. 21, 2016, 12:37 p.m.
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