Bay Area News Gulag Publisher/Singleton laptop John Armstrong paints bleak picture of underperforming company's finances along with some dandy excuses in internal e-mail sent Friday.
Headlines: Ad revenue down 21 percent in April compared to last year because of real estate crash, gas prices, early Easter in March, he says (no mention of diminished content, devastated morale, and company's lack of vision). He confirms customer service jobs have been outsourced to Manilla, and shrinkage (print size, that is).
Oh, and employees can expect visits from Armstrong and sidekick Kevin Keane as they campaign for a no vote on the union in a June 13 NLRB-authorized vote. I'm sure you'll be greeted with open arms, John.
Dear Colleagues:
If it’s not the real estate collapse, it’s gas at four bucks a gallon! We can’t seem to catch a break, and these tough market conditions continue to hinder our ability to improve our financial performance.
Revenue
In April we generated $15.4 million in revenue: $12.5 million from advertising, $2.4 million from circulation and more than $575,000 from commercial printing and other sources. Total revenue was 19% below that of April 2007.
Advertising revenue was 21% below a year earlier, which was worse than our fiscal year-to-date trend, which showed advertising down 16% through 10 months. The move of Easter to March from April affected this year-to-year comparison.
Retail advertising was down 13% from a year earlier. Our decline in the national category, 23%, was accelerated by Sprint’s decision to pull out of newspapers. Even Preprints took a hit in April, down 15%; that category is the only one showing positive growth this year.
The biggest declines continue to be in Classified, the category most directly affected by the housing crunch and its ripple effect across the Bay Area economy. Real Estate was down 53%, Automotive down 14% and Employment down 68%. The Employment category has taken the biggest hit from Craigslist and other Internet competitors.
Changing Market conditions
The banking category is virtually dark due to the housing situation. Layoffs are occurring with our local retailers and home improvement companies – they are simply doing what it takes to cut costs. They will advertise minimally until market conditions improve. They are hoping stimulus checks have some effect on spending but aren’t willing to jump ad budgets because of it.
Costs
We were able to offset the April revenue decline with savings in every division, fueled in large part by our successful buyout program. Total costs in April were down 22% from a year earlier, but April’s total does not include the costs of our Finance, IT, Internet and HR operations that were moved to the Shared Services Center in San Ramon last year.
2008-2009 Budget
We continue to make progress on our revenue and expense budgets for the fiscal year beginning July 1. We’ll have some preliminary reviews of those budgets later this month. We’ll keep you posted.
Editorial Division Vote
The National Labor Relations Board will conduct a secret ballot election on June 13 to determine whether nonsupervisory full- and part-time employees in our newsrooms want to designate a union as their exclusive bargaining representative for wages, hours and working conditions. A simple majority of those voting will determine the outcome. There are some news employees who feel they need a union to represent them. There are other news employees who believe just as strongly that the news group can best meet its goals in a union-free environment. Over the next three weeks executive editor Kevin Keane and I will meet with news employees to discuss the issues that have surfaced during the union organizing campaign. It is our hope that every eligible voter will cast a ballot after carefully considering the issues.
Interactive Advertising
Interactive revenue of $910,000 in April was down 18% from April 2007. While the total results are disappointing, they should not eclipse some significant progress we’re making on the digital front.
We are making significant progress in virtually all categories except Employment (see my reference to Craigslist above). Two examples: Retail sales were up 73%, and our sales onto Cars.com were so strong that we moved up to No. 6 nationally on the Cars.com Scorecard.
Circulation Report
The circulation averages for the six-month period ending March 30 were published, and for the first time they reflected partial impact of our consolidating our East Bay editions under the Contra Costa Times and Oakland brands. You may recall we began doing that January 1 to simplify the East Bay buy by national advertisers.
Our averages for the January 1-March 31 period were:
Contra Costa Times 183,086 Daily, 194,203 Sunday
Oakland Tribune 96,535 Daily, 91,343 Sunday.
Meanwhile . . .
Production
Prepress: We’ve completed installation of the Kodak computer-to-plate equipment in Walnut Creek and Concord. Consolidation of the former ANG and Contra Costa prepress teams has been completed, including relocation of the former ANG staff to Walnut Creek.
Press: Conversion of our newsprint web width from 48” to 46” – which will create a narrower newspaper and save newsprint costs – is well underway and scheduled for completion on this schedule: Walnut Creek, Concord and Hayward/Arden for editions of June 23; San Jose (which prints our Hayward, Fremont and San Mateo daily editions) on June 30.
Packaging: We began Sunday preprint package production and fulfillment reporting, which will assist Advertising in its preprint sales.
Commercial printing: We formed a Nor-Cal Commercial Print Team to increase commercial printing volume across our regional network of printing sites.
Editorial
NewPaper Project: This broad-based initiative to re-evaluate newsroom priorities and resources is gathering steam. Look for an interim series of recommendations from the task force in the next few weeks.
Jazbox: The roll out of this electronic front-end system officially ends next week with the move of the former ANG sports copy editors to Walnut Creek from Pleasanton. In late April the largest move took place when former ANG news copy desk personnel made the same move. Congratulations to all the users in all our newsrooms for accomplishing so much on an accelerated schedule. And a special tip of the hat to Mona Hatfield in IT, managing editor Pete Wevurski, project manager Bob Nishizaki and the supremely talented and patient team of “super-users” who guided everyone through the process.
Advertising
New initiatives: We rolled out new advertising positions below the redesigned half page weather report. (As an aside, we received a lot of complaints from readers about the trimmed weather report; a redesigned half page of weather is in the works.) We introduced new pricing to encourage increased frequency by advertisers in several categories. We’re planning a targeted bridal section. We increased prices on Cars.com with little advertiser resistance.
Circulation
Customer service: People calling to start or stop their BANG-East Bay newspaper or raise a service issue now are talking to customer service representatives in the Philippines. To be exact: Manila, the headquarters of APAC, our new inbound circulation call center operator. Emelyn Monteclaro spent two weeks in Manila training APAC employees.
Newsracks: We need your help. If you see a BANG-East Bay newsrack that is chronically empty, damaged, defaced by graffiti or otherwise in disrepair, please report it at
[email protected], a new channel to relay these problems to our single copy sales department.
Newspapers In Education: Longs Drugs, sponsor of our “Get Fit” program, increased its contribution for the next school year so we can expand the program’s reach to more students in a larger geographic area.
Interactive
Band site: Our recently launched BandsoftheBay.com site is generating great buzz and building audience. Improvements in the site are creating better experiences for users.
Content: We launched two new blogs: East Bay Outtakes and Alameda Journal. An outstanding series on child prostitution in Oakland received featured presentation on InsideBayArea.com.
People
Regan Senkarik, who has ably managed Bay Area News Group internet operations, joins Yahoo! next week. Mona Hatfield, who was IT manager at Contra Costa, then the No. 2 person in BANG IT, also joins Yahoo! next week. Both Regan and Mona were strong contributors to our progress as an integrated organization, and we wish them well. In each instance, a successor has not been named.
Francisco Gonzalez was promoted to assistant packaging manager at the Hayward/Arden facility.
In Circulation, Kelly Leibold joined us as distribution center manager at the Contra Costa Times’ DC in Richmond, Tim Bordley was promoted from zone manager to home delivery manager, and William Buchholz, manager of distribution of the San Joaquin Herald, added home delivery management of the San Ramon Valley Times.
Religion reporter Christine Morente was accepted into the prestigious Gralla Fellows Program for religion journalists at Brandeis University.
In Closing . . .
Photographer Ray Chavez continues to gain recognition for his work on “The Mayan Way,” the Guatemala series he created with reporter Matt O’Brien. Ray added the Latino Journalists of California Salazar Award for Photography after Ray and Matt received the James Aronson Award for Social Justice Journalism.
Speaking of awards, BANG-East Bay news staff members garnered 30 awards at the East Bay Press Club. Congratulations to all!
