Sam Zell this a.m. on CNBC

Posted from Romenesko:

CNBC’s Carl Quintanilla: HOW IS THE AD MARKET GOING TO HOLD UP THIS YEAR?

Sam Zell: WHAT AD MARKET?

Quintanilla: WELL PUT.

Zell: I MEAN, ARE YOU TALKING ABOUT THE PEOPLE WHO BUY ADS? I'M TRYING TO FIND ONE OF THEM.

Quintanilla: YOU'RE ON YOUR WAY, THOUGH, TO EQUALIZING NEWS COVERAGE AND ADVERTISING, RIGHT?

Zell: THAT'S CORRECT.

Quintanilla: YOU'VE LAID OFF SOME PEOPLE IN HARTFORD, BALTIMORE. YOU'RE GOING TO SELL NEWS DATA TO CABLEVISION? HOW MUCH PROGRESS DO YOU FEEL YOU'VE MADE IN GETTING TRIBUTE TO A POINT WHERE IT CAN FINANCE, IT CAN SURVIVE?

Zell: I THINK THE CASE OF "THE TRIBUNE" OR THE NEWSPAPERS IN GENERAL BASICALLY COMES DOWN TO PRODUCING A NEWSPAPER THAT THE CUSTOMER IS WILLING TO PAY FOR. AND THE CUSTOMER IS THE ADVERTISER AND THE CUSTOMER IS THE READER. THAT'S THE CHALLENGE. I THINK THAT BECAUSE NEWSPAPERS HAVE HISTORICALLY BEEN MONOPOLIES, I THINK THEY'VE BEEN INSULATED FROM REALITY. I, YOU KNOW, AM IN THE POSITION WHERE I'M GOING TO HAVE TO, QUOTE/UNQUOTE DELIVER REALITY. I THINK WE CAN HAVE TERRIFIC NEWSPAPERS, BUT I THINK THE NEWSPAPERS HAVE TO RESPOND TO THEIR CUSTOMERS. IN MANY CASES A LOT OF THE THINGS WE'RE DOING RIGHT NOW WERE ALL IDENTIFIED IN FOCUS GROUPS OVER THE LAST EIGHT YEARS. AND THE FOCUS GROUPS WERE MADE, WERE TAKEN, AND NOBODY PAID ANY ATTENTION TO THEM. OUR CUSTOMERS WERE TELLING US WHAT THEY WANTED AND WE'RE GOING TO GIVE IT TO THEM.



Honestly, it looks like he talked a lot and said very little.

 

Actually, someone should tell Zell that people WERE paying attention to the focus groups. The thing is, the focus groups kept telling newspapers they want MORE, and papers keep giving them LESS.

 

I find it troubling this guy, a real estate mogul, suddenly is the voice of what is wrong with newspapers and how to fix them.

 

Especially since he's part of the problem with newspapers.

He's a Lean Dean protege.

 

Were they yelling at each other during this interview?

 

"Newspapers have historically been monopolies . . ."

Clueless.

Clueless.

Clueless.

 

OK, I realize that this will prompt hell's wrath upon me for even suggesting it, but Zell may not be as crazy as he is simply a brash businessman with balls that no one dares step on.

Sure, it's easy to dismiss the words that come from his mouth before they ever reach the ear, because we don't want to hear what he's saying: Change. But the reality is, he seems willing to try anything to find a new business model that will work. Of course, he's got the burden of the old business model to contend with.

Perhaps the biggest problem that newspapers face is a culture that is resistive to change. Sure it's cliche, but who here hasn't been on one side or the other of this conversation: New person comes into the department and asks, "Why would we do it that way?" only to be met with the stock answer from a veteran in the department, "Because that's the way we've always done it." And that's what Zell is trying to get past, the culture of doing things the way they've always been done. Because it's not working.

The one thing I like about the people who come here to post their thoughts is that they are obviously passionate about journalism. But one thing I find so frustrating is that so many people who come here are reluctant to embrace the reality that journalism is a business. And our business is changing.

The old business model can't support the bloated newsrooms that once resulted from "newspaper wars" in places like Dallas-Fort Worth, Miami-Fort Lauderdale, L.A.-Orange County, among others. Because it's not just newspapers that newspapers are fighting anymore. The competition, of course, is more than just the Internet. It's television. It's radio. It's the long commute back and forth to work. It's your kid's extracurricular activity schedule. It's (fill in the blank).

So the business needs creative thinkers who can develop innovative products that are better geared to niche audiences. But it takes more than the Chicago Tribune's RedEye, because one niche product geared to young adults is not enough. You need another geared to the blue-haired set. Another for pet lovers. Another for autos aficionados. Another for (fill in the blank).

Because that's what the competition is offering the consumer. And that's what's attracting the advertiser. And that's where the money is in this fast-changing world of journalism.

This is not to say that Zell has gone about implementing change with the most deft touch. His famous F-You response to the Orlando Sentinel employee a few months ago is evidence of that. But he is a realist even if he is also a journalism novice. Just as so many journalism experts can be labeled business novices.

So Zell needs journalists just as much as the business needs investors. Because without both there will never be a business model that works for newspapers.

 

A lot of us aren't resistant to change. We are, however, skeptical of change imposed by real estage moguls and directed by bosses who never have shown any vision or willngness to change before it was imposed on them. To me, a culture of change is going to require a whole new layer of leadership in newsrooms, because those who have been doing things the same old way seem to be the least-equipped to suddenly change direction and get the troops to buy into it.

And yet, who's losing their jobs as if this all is their fault, as if they were the ones choosing the wrong direction in which to march? The troops.

 

He's right about one thing: Newspapers in general did get lazy about selling their product. And when competition moved in (or moved online, as the case was), the industry was not in a frame of mind to deal with it.

So it overreacted and turned itself over to people like Zell, who are completely clueless.

 

Zell is a vandal. No more, no less. What he's doing is ripping the copper pipe out of a foreclosed property he bought. The "let's try new things" bullshit is a cover story for the borrow a bundle, cut the shit out of the business, and try to make the payments business plan. I've said this more than once, but don't tell me about your new ideas, tell me what the idea freakin' IS.
Graphics and layout makeovers, massive layoffs, and offering the customers less for their money is not a new idea, God knows. God also knows it doesn't work.