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Journal Register Co. has been sold

Discussion in 'Journalism topics only' started by WolvEagle, Jul 14, 2011.

  1. WolvEagle

    WolvEagle Active Member

    JRC employees got the following email. No firm details on what the future holds. We'll see.

    Journal Register Company, a leading multi-media company in local news and information, announced today that Alden Global Capital (“Alden”) has purchased the Company.
    “This is a great vote of confidence from Alden in our strategy and the work of our employees who I want to personally thank for their efforts during this turnaround. While we clearly have more work to do, our strategy is fast becoming a model for the future of journalism that can properly serve local communities and be economically self-sustaining and profitable,” said John Paton, Journal Register Company’s Chief Executive Officer. “With Alden’s support of our Digital First strategy we look forward to expanding our Company going forward.”
    Since emerging from bankruptcy protection in August 2009, and under the new leadership, the Journal Register Company has been transformed into an innovative, digitally focused multi-media company. It has doubled its digital audience in the past year and is growing its digital revenues at approximately 70% (Q1/11), which is about seven times greater than the newspaper industry average in the first quarter of 2011.
    The Company’s Digital First strategy, which is centered on developing innovative, cost-effective methods for creating, distributing and monetizing content on multiple platforms while reducing legacy costs tied to print, turned the company from bankrupt in 2009 to an EBITDA of $41 million in 2010. While details of the transaction were not disclosed, all lenders have been paid in full (all principal and interest) as well receiving the equity consideration paid by Alden. The transaction was unanimously approved by the Journal Register Company’s Board of Directors.
     
  2. WolvEagle

    WolvEagle Active Member

    Also, from John Paton, JRC's CEO:

    Folks,
    Today we announced that the Journal Register Company has been bought by Alden Global Capital. And that's a good thing.

    Alden has been an investor in our Company for some time and they have had a courtside seat to the Journal Register Company's radical makeover following our Digital First strategy. They know what we do, they like what we do, and today they are putting their money behind our efforts.

    Alden knows the media space well and has other newspaper company investments. Today's announcement is a ringing endorsement of your efforts and demonstrates Alden’s confidence in our business model. Importantly, it also positions us well to continue to pursue our Digital First strategy and expand our Company going forward.

    So, we stay on our Digital First plan with our team and goals intact but this time with a solid financial partner backing us all the way.

    We have miles to go but today marks one very important step on our journey.

    I know you will have questions – email me or post them and I will do my best to answer them.
     
  3. Baron Scicluna

    Baron Scicluna Well-Known Member

    That's all great and all, but what happens when the Little Leaguers' names are misspelled?
     
  4. WolvEagle

    WolvEagle Active Member

    About 90 minutes after John Paton sent the email, one brave soul (who surely put his job on the line) sent a companywide response that elicited about 15 more responses, including a few from Paton.

    It is:

    John:

    You continually talk about moving forward and expanding and being profitable. You sing the praises of “Profit sharing” and boast this as though we are being properly compensated.

    The reality here in the past seven months is, you have outsourced 30 well-paying jobs of building ads to a company in Malaysia.

    July first, you eliminated the e-paper jobs—our highly profitable and poorly-compensated jobs—to a company in Canada.

    What is next?

    John, I think we all understand the Duck Test: “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.” And no matter how you describe this as (“And that's a good thing “), a Duck is a duck; not a swan, not a goat, not a dinosaur, not a phoenix. It's a duck.

    What are these investors putting their money into? I suspect NOT into the paychecks of the workers who so diligently work harder, do more and receive less while giving you the opportunity to tout this great comeback story around the world.

    The truth is, I have worked here 5 ½ years and received exactly one raise of 29 cents-per-hour in all that time.

    Our “Profit Sharing” this year—that one-week paycheck—was much less than giving use a regular raise. Yet, you make it sound as if we employees are gaining ground.

    John, this is your reality check. I just cannot sit back and listen to this song anymore without telling you and everyone at The Journal Register company just how I feel. And, I am certain that I am NOT alone in feeling this way.

    Sincerely,

    Nick Zbiciak
    The Oakland Press
    -------
    Paton's response:

    Nick,

    Like anyone you are welcome to that opinion.

    Is your preference that the Company remain bankrupt then simply go out of business?

    My first day on the job was Feb. 1, 2010. I said then and I said now that I thought the future of newspapers lay in what we now call our Digital First strategy. I told the staff that and put it on the website. It was no secret and I have repeated it constantly.

    It’s component parts were simple: we would invest in our core competencies which are content and sales and look hard at reducing our infrastructure costs.

    It is the only way for our company to survive.

    And so survive we have.

    We are now growing again. With growth there is a future. There are careers and yes, when we can, better compensation.

    A week’s extra pay does not make up for lack of raises over many years but it is a start in the right direction.

    John.
    -------
    There have been several other responses - too many to list here. There are some seriously pissed-off people - and they're pissed-off enough to put their jobs on the line. Wow.
     
  5. SF_Express

    SF_Express Active Member

    That's pretty big. Newspaper people, particularly in the newsroom, have always been bolder about expressing these company contrary opinions than people in other walks of life, at least in my experience.
     
  6. Baron Scicluna

    Baron Scicluna Well-Known Member

    I give that CEO credit for actually responding, although I fear that the guy who originally wrote it will be facing some sort of company retaliation.
     
  7. Mark2010

    Mark2010 Active Member

    Why do I always get a little anxious when a media company is acquired by something with "Global Capital" in its name?
     
  8. BitterYoungMatador2

    BitterYoungMatador2 Well-Known Member

    I was thinking the same thing. And then I start wondering what kind of "objective" coverage Wall Street might get by a newspaper owned by said company.
     
  9. YankeeFan

    YankeeFan Well-Known Member

    I love it when corporate folk give proper names to their initiatives.

    Come up with a name like Digital First, then refer to it in all further statements so you don't actually have to defend what you're doing.

    We have a plan! The Digital First plan.
     
  10. I would expect you will see Global Capital sell off assets to make quick cash, then slash and burn expenses (read: personnel) to establish the bottom line. They're not buying a newspaper to serve the public good. They're looking for investment return.
     
  11. Stitch

    Stitch Active Member

    Did JRC go to open source software? How's Scribus and Open Office working out? Do they use Linux for every computer?
     
  12. Mark2010

    Mark2010 Active Member

    See, that's the problem. If you are interested in making a fistfull of cash, you should buy, oh, maybe a pharmaceutical company. But not a newspaper.

    The day is coming when newspapers (all half dozen that survive) will have to operate as non-profits, designed to serve the public good without regard for how much of a profit margin they generate.
     
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