OC Register spends, grows

[Rusty Shackleford]

Story says the new owner of the OC Register is trying to grow the paper by spending.

Personally, I'm not sure this will work, but I hope for the sake of this industry that it does.

http://news.yahoo.com/california-newspaper-defies-trend-shrink-costs-155729605--finance.html

 

[Captain Obvious]

Glad Yahoo! is on the ball with running old news.

 

[Drip]

Story says the new owner of the OC Register is trying to grow the paper by spending.

Personally, I'm not sure this will work, but I hope for the sake of this industry that it does.

http://news.yahoo.com/california-newspaper-defies-trend-shrink-costs-155729605--finance.html

The story is old but I applaud the effort. Wishing them nothing but success in this venture.

 

[MileHigh]

Well, it's an AP story, not Yahoo, and it was written today. Here's a longer profile on Kushner from last month.

http://www.ocweekly.com/2012-12-13/news/aaron-kushner-the-orange-county-register-freedom-communications/

And I, for one, hope it works out.

 

[steveu]

I'm on board with Mile. I used to read OCR's e-edition and I subscribed to it again. I was VERY impressed by what I came away with here... only time will tell if the strategy works, but imagine if it does.

By raising circulation and papers sold, a large chunk of metro Los Angeles will have told ownership they prefer thicker papers. Papers that land with a thud on your doorstep, not papers that blow away in the wind when they are delivered. I have to wonder if a Los Angeles Times, out of Tribune's hands, would go back to the days of much bigger editions than they have now.

 

[Norrin Radd]

Would love to be optimistic here.

Best-case scenario is probably that the Register succeeds, but that does not affect anyone else. It's a unique ownership situation.

 

[JPsT]

Would love to be optimistic here.

Best-case scenario is probably that the Register succeeds, but that does not affect anyone else. It's a unique ownership situation.

For now.

 

[MileHigh]

As in spending money, reinvesting in the product? Building up the product? As if anything the past 10 to 15 years worked wonders?

Look, I have some skepticism too.* But what the hell. Is it any more of a gamble than what else has been done of late?

* Full disclosure: I have been brought on board here. Less than a week in, so I'm not exactly reading the company script or know it by heart. So ... let's see what happens. It's different. It's out of the norm of what has come down the pipe in the print world since the Internet boom. It ... might actually work? There are no guarantees, as my last two stops at prominent places have proved, so the "gamble" isn't ginormous (in my eyes).

 

[steveu]

Right. At least someone is trying. Someone has the idea "hey, why don't we improve the print product?"

Belo went down this road with the Dallas Morning News a few years back. There were some days when the DMN was embarrassingly thin, nothing like the thicker paper readers were used to in the Metroplex. While the S-T has remained somewhat thin, DMN added pages back to the paper. Of course they have a pretty strong balance between online and print, but still...

Chicago did the same thing. When out from under the yoke of Zell and Michaels, people there listened to the complaints about the print edition being redesigned and shrunk. Some pages have been added back to the paper and it feels like the Tribune again.

If I'm going to pay $1.00 or $1.50 for a paper, I want something in it. Don't give me 20-30 pages. You should be (if you're a bigger city edition) at least 40-50 on your slim days and 70-100 on your bigger-ad days. Give the readers something to look at and I think they'll come back.

Good luck with this, Mile. I hope it works, if only to prove the naysayers wrong.

 

[gravehunter]

Interesting to see what will happen here. A story ran within the last week or so that the OCR owner was looking at some of the Tribune papers, post-bankruptcy....of which the LATimes is one. If he buys the LATimes, would this mean consolidation of newsrooms in the LA area?
Time will tell....

 

[Captain Obvious]

With circulation up, have there been any sharp discounts to subscribing to account for the jump?

 

[Screwball]

The newsstand price has been lowered to 25 cents.

 

[Norrin Radd]

If he buys the LATimes, would this mean consolidation of newsrooms in the LA area?

That would be unique.

 

[Captain Obvious]

The newsstand price has been lowered to 25 cents.

But it costs $7.54/week for home delivery? Gimmicks won't bring back paying readers.

 

[Mizzougrad96]

I know they've made one hire that I haven't stopped applauding...

 

[fishwrapper]

General wondering about a business plan/philosophy:

The newsstand price has been lowered to 25 cents.

That's great. But that's not a long-term anything.

The publisher says his model is more subscriber-based than advertiser based.

OK. But we know many deliveries to homes is at cost or at a loss. In L.A./O.C., one delivery person could be delivering the L.B. Press Telegram, the O.C. Register and the L.A. Times to the same block to reduce costs. And it's still a break-even proposition.

Kushner: "When you see very smart people like Kohl's or J.C. Penney who are actively reducing what they are doing, digitally, in order to do more in print, they're not doing it because it's trendy.

Wait. I'm confused now. Are we more subscriber-based or are we more advertiser-based? We also know that Kohl's and JC Penny direct-mail/consumer-direct advertising budget dwarfs any other campaign.

Like all of you. Man, I hope this works.

But reading profile after profile and journalist after columnist fawn over new ideas (which aren't really new), I remain skeptical. I read about the fresh/young face of journalism, I remain skeptical.

Perhaps it's because I lived through Sam Zell and remember the same adulation and endorsements.

Perhaps I'm just skeptical.

 

[BTExpress]

Perhaps it's because I lived through Sam Zell and remember the same adulation and endorsements.

Well, Zell did throw a company $13 billion in debt. The properties were --- and are --- profitable. Just not profitable enough to handle that debt burden.

Has Kushner thrown the OCR in debt? If not, he's at least a couple of steps ahead.

Zell also made only one promise to his newsrooms:

"No matter how this deal turns out, my lifestyle won't change. But yours might."

The only thing that stopped me from taking the plunge out there was the absurdly high cost of living. Working in an expensive place is one thing. Being out of work with a mortgage in an expensive place is something else. And if I went out there, a mortgage would be necessary, and my days of borrowing money are over.

 

[fishwrapper]

Perhaps it's because I lived through Sam Zell and remember the same adulation and endorsements.

Well, Zell did throw a company $13 billion in debt. The properties were --- and are --- profitable. Just not profitable enough to handle that debt burden.

Has Kushner thrown the OCR in debt? If not, he's at least a couple of steps ahead.

Zell also made only one promise to his newsrooms:

"No matter how this deal turns out, my lifestyle won't change. But yours might."

No doubt. Totally agree. I get the stock-option plan statements stating I'm fully vested and my shares are worth $0.
As a sidebar: Zell had a 40-year history of turning around depressed assets. Kushner ... we'll he's not even 40.

 

[BTExpress]

No doubt. Totally agree. I get the stock-option plan statements stating I'm fully vested and my shares are worth $0.

True. But like me, you also (I assume) got $34/share in 2007 instead of seeing Wall Street pummel those shares to McClatchyesque $2-$3 levels. Every day I look at my 401(k) statement I can't help but offer a "Whew! Thanks, Sam."

As a Zell survivor who jumped off the RMS Tribune 16 months ago, I'm interested in seeing what happens with the newspapers. I certainly miss my former Tribune salary. If Kushner buys them and grows them . . . I might start having regrets about bailing.

Wife wouldn't, though. She got tired of 365 days of summer every year.

The one thing Kushner (and others) will have to look at are the pension numbers. Tribune's are huge (my upcoming $770/month notwithstanding). And it wouldn't be surprising to see would-be buyers pass when they see those obligations.

 

[fishwrapper]

No doubt. Totally agree. I get the stock-option plan statements stating I'm fully vested and my shares are worth $0.

True. But like me, you also (I assume) got $34/share in 2007 instead of seeing Wall Street pummel those shares to McClatchyesque $2-$3 levels. Every day I look at my 401(k) statement I can't help but offer a "Whew! Thanks, Sam."

As a Zell survivor who jumped off the RMS Tribune 16 months ago, I'm interested in seeing what happens with the newspapers. I certainly miss my former Tribune salary. If Kushner buys them and grows them . . . I might start having regrets about bailing.

Wife wouldn't, though. She got tired of 365 days of summer every year.

The one thing Kushner (and others) will have to look at are the pension numbers. Tribune's are huge (my upcoming $770/month notwithstanding). And it wouldn't be surprising to see would-be buyers pass when they see those obligations.

When companies are bought or split, or bought and split the new company must take into account historical financial assumptions (like pensions). I'm sure I'm not telling you anything you don't know.
Usually a negotiated amount by the seller and purchaser is put into a growth escrow that assumes (usually, and usually wrong) 10% growth and early death guesstimates. With modern economics and modern medicine, not always a winning formula.

I, too, left the company some time ago (willingly).