By Royal Calkins
I never thought I’d be writing something positive – OK, sort of positive – about Gannett Newspapers. I’m forced into it now only because of the very real possibility that this sprawling but lackluster newspaper chain is about to be taken over by a lesser chain, one that would have to step it up dramatically to earn the lackluster label.
For most of my career, my newspaper colleagues and I cringed whenever it was rumored that our employer was possibly being courted by Gannett. Today, however, the scariest three words in newspaperdom are Digital First Media, a creation of vulture capitalism with designs on becoming the ultimate journalistic bottom feeder as well as the nation’s largest newspaper group.
For decades, until the rise of various cost-cutting enterprises such as Dean Singleton’s Alameda Newspaper Group and the Donrey Media Group, Gannett was the chain that reporters tried hardest to avoid.
If you’ve lived in California a while, you may have read some Gannett papers: the Salinas Californian, Visalia Times-Delta and the Redding Record–Searchlight. There have been others at times. Newspapers get traded around like aging right fielders. The Gannett newspapers in California are fairly awful papers these days, like too many papers everywhere, but they haven’t always been like this.
In its heyday, the ‘70s perhaps or the ‘80s, the Salinas Californian produced some solid to excellent work and a full complement of pages, even entire sections. Some of my favorite journalists did some great work there, including Eric Brazil, Rick Rodriguez, Larry Parsons, Claudia Melendez Salinas and Roberto Robledo.
But signs of the decline throughout Gannett were already starting to show around the edges by the time I graduated from journalism school and began my hunt for employment in the early 1970s. For four decades, I toiled in journalism’s minor leagues, from Chico, to Fort Wayne to Fresno, Santa Cruz and Monterey, managing to crank out a few memorable pieces while avoiding servitude within Gannett even it grew to possess more than 100 dailies and more than 1,000 weeklies.
There was always a sameness and a safeness to the Gannett assemblage. On the plus side, the chain was known for promoting women and minorities into editing and publishing positions and for working overtime to promote the appearance of diversity in its news coverage. Gannett editors placed a premium on getting minority faces on their pages.
(I have no evidence to back this up, but I always suspected that the bosses at Gannett pushed diversity not because it was the right thing, but because they thought it might make Congress less likely to step in some day to break up an operation with notable monopolistic practices.)
Noble as all that was, the journalism often fell short of top notch. Gannett editors, publishers and regional managers were not known to take risks. Good journalism requires risk taking.
What has happened to Gannett papers in recent years is the story of what has happened to daily journalism in recent years. The Salinas paper now employs three journalists, I believe. The editor is also editor of the Gannett papers in Visalia and Redding. He lives in Redding.
Today the once proud Californian publishes three skinny editions each week. They have moved out of the cool Art Deco digs across from the Salinas courthouse and are working out of some anonymous office space somewhere. (The Monterey Herald, likewise, is now in rented space along Garden Road and in all likelihood is looking for something smaller.)
So, having said all that, compared to Digital First Media, Gannett is still a professional organization with a decent journalistic pedigree. It has identifiable corporate governance, a board of directors whose names and bios can be found on its web page. There is even a journalist or two on the board. Its corporate operations have declined in size and ability over time, but it still has people assigned to making sure employees receive training and instruction in legal issues including libel. There are Gannettoids who ensure that the various publications operate under the modern rules of personnel management.
Digital First Media, on the other hand, is operated by the mysterious Alden Global Capital hedge fund based in New York that answers to no one except its investors. The only answers the investors seem to care about are decent financial returns. Make that indecent returns.
Conventional wisdom has it that the once mighty newspaper industry is at death’s door, that Craigslist and the rest of the Internet have claimed all the profits and publishers are hanging on mainly for reasons of habit or public service.
The truth is that many newspapers are marvelously profitable, even now. Here’s the secret. Circulation and ad rates may be way down, but not nearly as much as expenses. In absolute dollars, profits have declined over the past couple of decades but as papers and chains have changed hands at bargain basement prices, the return on investment has remained healthy because of gigantic cuts in personnel.
In a chart it released when it announced its Gannett acquisition effort, Digital First reported that its newspaper holdings were providing a 16 percent return, well down from typical newspaper earnings of two decades ago, but still something to write home about.
Two decades ago, more than 450 journalists worked for the San Jose Mercury News, then a Knight Ridder paper. That’s reporters, editors and photographers. Today, under Digital First, there are less than 40. When I started at the Monterey Herald, more than 40 journalists filled the newsroom. Today there are seven. Maybe eight.
Like short sellers on Wall Street, Alden has learned there is money to be made in the decline. As long as there are still some loyal advertisers and loyal readers, money will come in, and if there isn’t enough of it to keep the investors happy, well, we’ll just lay off another reporter or three. Who’s going to notice?
I should mention that my career path did intersect with Digital First Media’s path near the end of my long career.
When I started working at the Monterey Herald in 2000, it was operated by the Knight Ridder chain, once considered the best newspaper conglomeration in the nation, crowned as it was by the Philadelphia Enquirer and San Jose Mercury News, Miami Herald and other serious practitioners of the newspaper arts.
Squeezed too hard by investors, though, the chain was sold off in 2006 to Dean Singleton, one of the cheapest operators in the biz. I mentioned him up top along with his Alameda Newspaper Group. By the time he got his hands on Monterey, he was working under the name Media News Group. Over time, through bankruptcies and other finagling, that morphed into Digital First Media, which, at first, didn’t seem like the absolute worst thing.
Digital First aimed to revive its portion of the industry by delivering news mostly via computer by, true to its name, breaking news on the Internet and turning the printed product into an afterthought. It seemed like a good idea. Alden came along and put some money behind the idea.
Unfortunately, the money went into trying to develop a national product, a New York-based wire service of sorts meant to deliver large chunks of enterprise reporting to be disseminated to the regional holdings. It was a huge mistake. Large chunks of enterprise reporting were already widely available through various well-established news services such as the Associated Press, the New York Times and others. It would have been much smarter for DFM to put any extra money into expanding the local news operations. DFM might have turned things around by expanding, not shrinking, its offerings in Monterey and Santa Cruz and San Jose and Oakland and everywhere else where the DFM label is taped over the names of the previous owners.
Until recently, it appeared that DFM’s new strategy would be to simply hold on to its papers across the country, keep the money flowing toward New York by constantly cutting expenses and eventually close the doors and sell the furniture. Now, DFM could be on another track or, more likely, it has simply decided that the scrap value will be bigger on a larger scale.
It may look attractive to DFM’s investors, whoever they might be. It is a privately held concern and little is known about its activities. For the reading public, however, there is nothing attractive about it.
Bottom line. If you see your congressional representative at a party, tell him or her to support any Justice Department inquiry into the current proposal to create the monopolistic monstrosity envisioned by Alden Global Capital.
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