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March 17, 2006

Twelve Newspapers in a State of Nature

All the ex-Knight-Ridder newspapers could become active agents in their own future. Exactly what they never were when HQ was in Miami and San Jose. Q: Where is HQ now? And who is there to get orders from? Who's going to tell you: no, you can't use a newspaper for that?

Now this is more like it. New site, new statement. Save the Merc. The ultimate adventure in civic journalism…

We, leaders and residents of Silicon Valley and Santa Clara County, are concerned about the future of the San Jose Mercury News, a highly valued institution here for 155 years.

We do not want the sale of the Mercury News to lead to a smaller, less ambitious newspaper.

Without an experienced news-gathering and advertising sales staff, the quality of the newspaper’s coverage and effectiveness as an advertising tool would be diminished.

Without vibrant, in-depth reporting of valley life, residents and workers will not be as well- informed or have the information they need to engage fully in civic life.

Without a civic-minded owner, many civic, cultural and charitable groups could lose a major financial supporter.

We encourage all potential new owners of the San Jose Mercury News to preserve its excellence and learn of our community’s expectations for its daily newspaper.

Right on, Silicon Valley bigs. My only edit: “And we warn potential buyers that our expectations will be voiced loudly, clearly and often.”

Check out some of the the signers. They’re not journalists or media people. Susan Hammer, former San Jose mayor; Carl Guardino, CEO of the Silicon Valley Leadership Group; Pat Dando, head of the Silicon Valley Chamber of Commerce; Don Kassing, President, San Jose State University; Tom Campbell Dean, U.C. Berkeley Haas School of Business; David M. Kennedy, Pulitzer Prize winning history professor, Stanford University. And more.

Like the head of the SEC realizing the value of investigative reporting, the heads of some Silicon Valley institutions are realizing the value of the Merc’s reporting and forum.

Jump to Philadelphia, where the Daily News and the Inquirer are in the same limbo. Editor and Publisher reported it (March 15):

A former high-powered Philadelphia advertising executive has received commitments “well in excess of $100 million” to buy The Philadelphia Inquirer and The Philadelphia Daily News in an ownership structure similar to the community-owned Green Bay Packers pro football team, he told E&P Wednesday.

Brian Tierney said he has lined up 20 “super-successful” Philadelphia businesspeople in an investment group ready to partner with others, including the Newspaper Guild, to buy the papers… Tierney said the group was committed to long-term ownership. “We’re looking at this as partly a good economic investment, and partly as good community involvement,” he said.

And there are other Pennsylvanians lining up bids, E & P said. (This adds a new layer onto the many in Michael Shapiro’s superb account of Inquirer history and present-day fortunes in the current CJR.)

A lawyer friend once explained to me that in any large transaction there is a moment, which might only be conceptual, and happen on paper, when the asset being transferred isn’t owned by anyone. “And for that,” he said, “you need good lawyers.”

The remarkable thing in San Jose and Philadelphia—and nine other cities where Knight-Ridder once owned newspapers that McClatchy, the new owner, doesn’t want—is that this moment is going to last for three to fourth months, the estimated time it will take to complete the larger acquisition. “We’ll sell them as groups or individually,” McClatchy CEO Gary Pruitt said Monday. “We’re open to all possibilities.”

Did you hear that? All possibilities. That’s the signal to all to start generating possibilities. Do we have to spell it out for you, orphans of Knight-Ridder who still have newspapers that circulate widely and serve as local forums?

Maybe we do.

This means that in St. Paul and Duluth, MN.; Grand Forks, N.D.; Aberdeen, S.D.; Akron, Ohio; Fort Wayne, Ind.; Contra Costa, San Jose and Monterey, Calif.; Wilkes-Barre, Pa.; and Philadelphia there are newspapers that could become community-owned, locally-owned, owned by a non-profit trust, owned by an educational institution, owned by a family with a special sense of stewardship (there are some) or owned in some new combine, uninvented as of today, that incorporates the lessons of the previous era in newspaper ownership— and its contradictions.

Lovers of mystery in Philly: got one for you. In a sense the Inquirer and the Daily News aren’t owned by anyone right now. So who is actually publishing them? What “person,” if you will.

Knight-Ridder has said: we had to sell you, and we’re sorry. McClatchy has said: we’re sorry, we don’t want to own you. It’s like a sudden state of nature, where there’s just the newspaper, putting its editions out, and no social organization around it.

Shapiro on the situation in Philly in December:

It was a moment unlike any other at the Inquirer. The potential sale of the chain had, at once, left the newsroom in limbo and effectively removed Knight Ridder from the everyday business of the paper. Bennett had been freed to proceed without corporate interference.

That’s Amanda Bennett, the editor. If she felt free in December, she’s even more free now.

“For the 12 newspapers that will be sold, the uncertainty is not over, and I regret that very much,” outgoing boss Tony Ridder said in a prepared statement this week. But at the end of the week we can see that this uncertainty, which is nerve-wracking, could also be life-giving.

Uncertainty means something new and unexpected could happen. (And I suspect that behind the scenes people in Philly, San Jose and maybe elsewhere are working on just that.) It’s even possible that a new social organization for the newspaper could come about, as with the model of the Green Bay Packers. What other schemes are there? We barely know. But a newspaper makes an excellent forum for finding out. So does a blog.

Now a newspaper state of nature is a condition so rare, and so wild, that some of the people who are “in” it don’t realize how unbound they actually are. Here’s St. Paul Pioneer Press columnist Dave Beal (May 14):

McClatchy faces the job of finding a qualified buyer for the Pioneer Press, one that many of us at the paper and throughout the Twin Cities hope will value good journalism enough to continue to provide worthy competition for its very own Star Tribune. Will McClatchy be up to the challenge?

McClatchy faces… Will McClatchy be…? What about St. Paul? (What about Dave Beal?) Are the people there up to the challenge of finding a qualified local buyer who gives a hoot about journalism, and about St. Paul, who might also have some business acumen? Beal speaks in a strangely passive voice, probably bred into him during the era of corporate ownership. He seems to think that all the moves will be made in Sacramento; but that is just not correct. (Save the Merc is a move, initiated by the newspaper’s staff.)

John Welbes and Jennifer Bjorhus, reporters for the Pioneer Press, showed some awareness of the state of nature. By writing about a vacuum of activity (a dog that hasn’t started barking) they imply there ought to be some.

There was little immediate buzz Monday about any local groups expressing interest in pursuing the Pioneer Press.

“It’s been almost too quiet, for whatever that means,” said Dan Foote, president of St. Paul ad agency Foote & Co. “I just hope that we’re not being complacent.”

Indeed. “The Pioneer Press’ [publisher Par] Ridder said Monday that he had received ‘no serious phone calls’ from interested buyers yet.” With no calls coming in, Welbes and Bjorhus made some calls out.

Gene Carr, chief executive of American Community Newspapers in Eden Prairie, said in an interview that he was very interested in growing his cluster of Twin Cities publications.

“Anything that comes to market we will take a serious look at, without question,” Carr said.

Carr is a player to get other players thinking: should I play? It’s basic journalism. Report into a vacuum and people will fill that vaccum if you’re onto something. “Carr wouldn’t discuss financial information but said that it would not be a stretch for the company to consider buying the Pioneer Press.”

And it’s not a stretch for any of the ex-Knight-Ridder newspapers to become active agents in their own future, which is exactly what they never were when HQ was in Miami, or San Jose. Think about it, Duluth, and Contra Costa: who is there to get orders from? Who is going to tell you: no, you can’t use your newspaper (your column) for that?

Another columnist too stunned or beaten down to see this is Diane Evans at the Akron Beacon-Journal. Instead of phoning around Akron to see who is talking about local ownership, community involvement and long term investment, or the Green Bay Packers model, she wrote about the long last days of Jack Knight, who started his newspaper empire in Akron.

Evans described what it used to be like before the money-changers entered the temple. “People believing so much in what they do that they get worked up if the results don’t meet their expectations for greatness,” she writes (March 16). “I relay this only to try to shed a small bit of light on the Knight tradition and what it has meant to so many of us.” Then like Dave Beal she goes spectatoring:

My fear is that whatever happens to the Beacon Journal in the future will be more about profit margins and less about doing the best we can for the community.

Yes, times are different. In Mr. Knight’s day, “profit margin” wasn’t even an expression you heard in the newsroom. Now it has forced the sale of a fine newspaper that continues to make money, yet not enough for a handful of investors.

Today when I hear journalists get worked up, it’s over this perversion of the Knight ideal: Instead of thinking about what more we can do for readers, we worry about taking too much away from them.

I hope for the best. Right now, we wait to see.

You wait to see? I’m sorry, but no. You get off your columnizing butt to see if there’s a Brian Tierney plus ten investors in your town. Or some better combo, a neater idea. And if there isn’t, at least write an angry column about people in Akron who won’t step up. Don’t give us hope-for-the-best, wait-and-see when you can do a lot more than that.

You can tell the people what other forms of ownership exist for successful newspapers, beyond the “likely buyers” who hypnotize the financial press, and the Knights of a golden past. You can even get involved in the events that might bring a better buyer to the fore.

What are the bosses going to do, get mad and sell you?

Back in November, Will Bunch at his Philadelphia Daily News blog Attytood wrote about an unlikely buyer. “We only see one good solution here, and it’s a long-shot — but I’m going to throw it out there. It’s clearly possible that some Knight-Ridder papers could be sold off individually. Wouldn’t it be great if the stock in a new Philadelphia Daily News Corp. were owned by the non-profit Pew Charitable Trusts?”

Actually, I don’t know that it would be great. We would have to see their plan. We would have to know their agenda. We would have to ask some good hard questions of the Pew people, who later said they weren’t in the game.

Bunch pointed out that the mighty good St. Petersburg Times (the 22nd largest newspaper in the U.S.; the Inquirer is 20th) is owned by the non-profit Poynter Institute. For smaller markets, there’s the Anniston (Alabama) Star and the Ayers Family Institute.

In both cases, an educational mission is intertwined with the newspaper’s public service creed, and business model. Where do the profits go? To the school. No one’s trying to take them out and put them somewhere else. You can get better journalism that way.

In the U.K. the Scott Trust owns the Guardian, and the Guardian is leading the way as the British press meets the Web. What does that tell you?

This state of nature is only going to last a few months, during which the social contract for newspapering could be re-written in one or more of these limbo towns. But here’s the thing. The journalism contract has to be up-for-grabs too.

Shapiro in CJR captures this. With all the cutbacks and setbacks Amanda Bennett had to recognize the end of an era: “The Inquirer could not and would not continue trying to be Philadelphia’s paper of record.” It’s similar to what Andrew Heyward of CBS News said in his PressThink post: The Era of Omniscience is Over. It’s too expensive to manufacture authority that way.

Instead, you grow your credibility by not claiming as much for the news, and then delivering big on the fewer things you do claim to do well.

“That, in turn, meant that the shrunken staff was now free from the burden of covering everything, and given that freedom, the paper would begin to be filled with the boldly conceived and written pieces that had once been its hallmark,” Shapiro writes.

Which sounds like a new social contract for the news from that newspaper. Classically, that is how a state of nature ends.

After Matter: Notes, reactions & links…

Bob Stepno reminds me that The Day of New London, Ct. is also organized as a trust dedicated to community service.

See also Jeff Grammage in the Inquirer: Newspapers as a public trust.

Dan Gillmor (March 19): Saving the Mercury News: Could Yahoo Help? He’s a former columnist for the Merc, and knows Silicon Valley well. “Some impressive people have endorsed the Save the Merc campaign,” Gillmor says.

Missing from the list, at least so far, are members of another and I believe much more important Valley power structure, namely the technology crowd. Where are the CEOs of major corporations, venture capitalists, investment bankers and the like. Where are the Web 2.0 and 1990s superstars — the younger entrepreneurs, programmers, etc. who don’t run big tech companies but who have massive credibility with the tech world’s rank and file. Were I running this campaign, these are folks I’d pursue.

Chris Nolan of Spot-on, also a former columnist for the Merc, e-mails: “The short version is that there is no one on that the list who can get anything done in Silicon Valley. It’s a list of San Jose movers and shakers, mostly civic and political activists. No John Chambers, no Andy Grove, no John Doerr. Those folks could care less about the Merc. They read and the WSJ.

“I would support community involvement in saving the Mercury News, if the Mercury News would become a pioneer in community journalism, writes Dave Winer. “…To get people excited enough to rally behind it, they’re going to have to do something exciting.”

I agree, which is why I said in my post that “the journalism contract has to be up-for-grabs too.”

Ryan Sholin’s J-School Blog: The Mercury News, Silicon Valley, and the Future of Newspapers. Interesting.

Here’s the Los Angeles Times on the launch of Save the Merc:

The newspaper’s executive editor, Susan Goldberg, cautioned that although she appreciated the support, the situation wasn’t so dire. “We intend to continue doing great journalism.”

That kind of caution is going to get you Dean Singleton.

Tom Mangan, an editor at the Mercury News who also has a blog, says in the comments: “What a lot of folks in these towns need to understand is that they’re looking at a once-in-a-lifetime opportunity to restore local ownership to their bedrock news institution.” Agreed. He adds: “If there were to be a Poynter of the Pacific Rim, the Merc would be the place to make it happen.”

Also see Mangan’s post, Why I’m not bailing on the Mercury News.

The American Spectator: “The purchase of Knight Ridder Inc. by McClatchy Co., announced Monday, presents possibly the best opportunity to date to experiment with the next inevitable leap in journalism: jettisoning print.”

American Journalism Review on the fate of Knight-Ridder’s DC bureau after the McClatchy takeover.

And here’s the LA Times on the limbo in Philly: Feeling Like an Orphan in Philadelphia, by David Zucchino, staff writer who once worked at the Inquirer. It has this sketch of the situation:

The paper’s circulation is 357,000 daily and 715,000 Sunday; in the 1980s, it was more than 500,000 daily and 1 million Sunday. The newsroom staff has been trimmed to 425 from a peak of 721 in 1989. The operating profit margin of Philadelphia Newspapers Inc., publisher of the Inquirer and the Daily News, is about 14%, according to company insiders — compared with 16.4% for Knight Ridder and 22.8% for McClatchy.

Possible bidders for the Philadelphia papers, and the other former Knight Ridder properties up for sale, include MediaNews Group of Denver, whose chief executive, W. Dean Singleton, recently toured the Inquirer and Daily News. Several Philadelphia-area investors also are interested, according to the Inquirer.

Also in play is a bid by the Newspaper Guild-Communications Workers of America, which represents workers at both Philadelphia papers and eight of the others for sale. The guild is partners with Yucaipa Companies, an equity group in Los Angeles that is controlled by billionaire investor Ron Burkle, a Democratic fundraiser who has a history of working well with organized labor.

Joseph N. DiStefano of the Inquirer has an informative FAQ about the Philly newspapers’ predicament (March 18). Here’s the page for all the Inky’s Knight-Ridder sale coverage.

Jill Porter, Daily News: Telling doomsayers to shove it since 1925. Inspired.

Will Bunch of the Daily News is quite skeptical about the local buyers who have surfaced so far.

Chris Satullo, the Inquirer’s editorial page editor, in the comments here: “Let me assure you that a great deal is being thought, dreamed and done in Philly right now by people who care about the papers, the web site and about journalism.” And see his follow-up: “I just don’t see that this is game over. With the right owners and attitude, it could be game on.”

Also in comments, PressThink regular Daniel Conover has a different idea— go all-Web:

Why not get your investors together, create a business model for a great news website to go head-to-head with your troubled former KR paper? Then hang out your shingle and start hiring away its staff. Offer them what they’re making now — or better…

Start up your online news organization and kick the old paper’s ass. No, you won’t have all that print revenue, but you won’t have any of its overhead, either.

Recommended… Susie Madrak: I Heart the Daily News. Snippet… “The columnists aren’t so hot anymore (HIRE ME HIRE ME HIRE ME), but we do like their blogger. And the beat writers’ beatific, twisted humor still runs deep, like an undertow…”

They should hire her, when they get to hiring again.

McClatchy CEO Gary Pruitt visits the Kansas City Star and tells the staff: “You’re the last mass medium left in this community.”

Julio Garcia, who used to work there, goes over the history of Knight-Ridder Digital. “Let’s face it; KR/D didn’t have the best decision making track record.” Read why he says that. Also see this analysis by Bill Mitchell of Poynter comparing McClatchy’s online strategy to Knight-Ridder’s.

Star-Tribune: Hefty price of Pioneer Press may rule out local buyers.

Lex Alexander comments on this post: “Could we be reaching a tipping point?”

Diane Evans of the Akron Beacon-Journal thickens the plot in the comments:

Jay, I’m going to give you news for your blog. I am part of a small group of very talented journalists, steeped in the Knight tradition, and WE ARE TRYING TO DO SOMETHING to reclaim some of the Knight legacy in a new way. You say I should get off my “columnizing butt.” Well, I’ve been busy, and so have the others working with me. We have plans that are nothing short of pioneering in our field. We’ve got the people to carry out these plans, but now we need the financing. We’ve had some success, in terms of investment, but now we need more. Any ideas? You can email me.

I wrote about some of these possibilities in November: The Main Street Strategy For Selling Knight-Ridder.

Shareholders expecting what Wall Street expects—margins of 20 percent and higher—are to be exchanged, in the Main Street Strategy, for owners who understand that at 10 percent newspapers can have excellence and longevity and make money. When critics ask: why would local owners succeed any better than current management? the answer is: they can succeed at 10 percent; Knight-Ridder executives could not.

Just came across this beautifully designed blog— a local press review for the Quad Cities area in Iowa. QC Media Review, started by three local journalists.

From Fort Wayne—where one of the 12 McClatchy orphans is published—comes Fort Wayne Observed, which recently published Nancy Nall’s essay and extended report: What’s black and white and troubled all over? The newspaper industry’s terrible, horrible, no-good, very bad year. Aside from the quotes from me, there’s a lot of good stuff in her overview of the troubles.

The model for all such “city media” sites is LA Observed.

Posted by Jay Rosen at March 17, 2006 1:48 AM