Tough days ahead for Seattle Times?

[BigSleeper]

Seemed inevitable.

http://www.bizjournals.com/seattle/stories/2007/12/24/daily10.html

 

[GBNF]

This was interesting:

"The only hope a metropolitan daily newspaper has to survive through the remainder of this decade is to recreate itself into a much lower cost and more nimble organization.""

 

[TheSportsPredictor]

In 2000, the paper booked $270 million of print ad revenue, but that's fallen to $200 million this year, "a loss of more than one quarter of our print revenue base."

So they're making $200 mil a year on ads and can't find a way to say in biz. **** them.

 

[GBNF]

I don't think they have a problem making $200 mil. I think they have a problem making $200 mil on a paper budgeted (and planning for, and hiring for) a $270 mil profit.

The problem isn't how much they make, it's that they way overspent during the economy boom

 

[Rumpleforeskin]

I was talking to someone a little while ago from the Times and they said they were entrenched in a bitter winner-take-all battle. Maybe this is the climatic finish.

 

[wickedwritah]

I don't think they have a problem making $200 mil. I think they have a problem making $200 mil on a paper budgeted (and planning for, and hiring for) a $270 mil profit.

The problem isn't how much they make, it's that they way overspent during the economy boom

They're still making a profit, I bet. Probably only six percent instead of 22.

 

[GBNF]

Of course they're making a profit, but tot them, the profit doesn't justify the "overspending" for the product. Clearly, they think the product is fine being inferior, as long as the bottom line isn't tremendously affected.

Not justifying it, just trying to explain it a bit, under my understanding.

 

[Joe Williams]

Of course they're making a profit, but tot them, the profit doesn't justify the "overspending" for the product. Clearly, they think the product is fine being inferior, as long as the bottom line isn't tremendously affected.

Not justifying it, just trying to explain it a bit, under my understanding.

See how simple it is, yet all the decision-makers remain in denial: Your revenues drop dramatically because people -- advertisers and readers -- now treat you as optional (or worse). You respond by cutting right and left, preserving as much profit margin as possible this year while giving them an even lesser product moving forward.

Is that going to make you more vital or less vital to the advertisers and readers than you were a year earlier?

Freaking death spiral.

Only way to pull out of it -- if you're serious about producing a newsprint version -- is to suck up the single-digit profits for a few years and improve and enhance the product for your advertisers and readers. Not surprisingly, you don't do that by purging your most experienced talent via buyouts/layoffs, slashing your journalistic ambitions via budget and space cuts or making your paper's impact "smaller" by covering suburban village boards and high school stuff at the expense of enterprise news, features and sports. (I'm talking metro markets like Seattle here.) Maybe this is no solution, but isn't it a better alternative than knee-jerk cutting and slashing?

 

[Frank_Ridgeway]

Well, when the Seattle Times was trying to get out of the JOA (and thus kill the Post-Intelligencer), it claimed it lost money every year from 2000-2005. Meanwhile, the P-I claimed the Seattle Times' losses were deliberate, the result of a newsroom hiring spree, in order to be able to void the JOA. They were banking on a monopoly, and they didn't get one. And now that revenue is down, as it is most places, there they are.

 

[wickedwritah]

Well, when the Seattle Times was trying to get out of the JOA (and thus kill the Post-Intelligencer), it claimed it lost money every year from 2000-2005. Meanwhile, the P-I claimed the Seattle Times' losses were deliberate, the result of a newsroom hiring spree, in order to be able to void the JOA. They were banking on a monopoly, and they didn't get one. And now that revenue is down, as it is most places, there they are.

I have a hard time believing that $70 million can solely be pinned on hiring more bodies.

 

[Frank_Ridgeway]

Well, when the Seattle Times was trying to get out of the JOA (and thus kill the Post-Intelligencer), it claimed it lost money every year from 2000-2005. Meanwhile, the P-I claimed the Seattle Times' losses were deliberate, the result of a newsroom hiring spree, in order to be able to void the JOA. They were banking on a monopoly, and they didn't get one. And now that revenue is down, as it is most places, there they are.

I have a hard time believing that $70 million can solely be pinned on hiring more bodies.

I didn't say that and neither did the story. It said print advertisng revenue had declined from $270 million in 2000 to $200 million in 2007.

Interesting chart at the bottom of this itemizing the Times' losses and newsroom expenditures from 2000-2005:

http://seattletimes.nwsource.com/html/businesstechnology/2002916182_joa07.html


Point is, hiring more bodies didn't improve the bottom line. We can say it would, theoretically, but the folks running the Seattle Times can point to the figures and say, "We tried that, and it didn't work." Now whether that money was spent the right way is a question, but even if their motives were evil (trying to screw the Post-Intelligencer out of the JOA), they did spend the money and revenue didn't grow.

 

[Duck_n_cover]

The problems at the Times go much deeper, as everyone might suspect. For instance, they have had almost 100% turnover in the ad department in the past three years. Why? An inexplicable, draconian sales goal process that punishes good salespeople with ever higher targets. You can't hope to keep advertisers on board when they can't recognize your sale team.

Also, the Times has separated the print and online ad teams, ostensibly to keep the Guild out of the "new media" areas of the paper. The problem is this: If an advertiser wants to buy both print and online, they have to bring in TWO salespeople.

These are just boneheaded business decisions, which I saw a lot of when I was in newspapers.

 

[Tom Petty]

bookmark

 

[MacDaddy]

They've been bleeding money for years; now that the JOA fight is over (at least for awhile) they're going to have to do something about it if they want to stay in business. The way they spend money is amazing.

 

[steveu]

This was interesting:

"The only hope a metropolitan daily newspaper has to survive through the remainder of this decade is to recreate itself into a much lower cost and more nimble organization.""

Well, geez... if that's the case then we're gonna start hearing about hundreds of papers dying off, because this decade is almost over. I think that's too dramatic a scenario.

 

[Simon_Cowbell]

I don't think they have a problem making $200 mil. I think they have a problem making $200 mil on a paper budgeted (and planning for, and hiring for) a $270 mil profit.

Again, like TSP wrote....

 

[steveu]

UPDATE via E&P:

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003694362

For those who don't care to link, the Times will axe 17 positions and let another 50 or so lapse via attrition. So a lot of these jobs going away will be ones that haven't been filled for a long time. The paper will also undergo the shrinkage others have (not space cuts, but the size will be trimmed).

In retrospect, it could be worse, but it still sucks.

 

[statrat]

One of these days a newspaper executive, whose paper consists entirely of AP wire copy, is going to wake up, walk into an empty newsroom and wonder why he didn't follow the old adage of "You have to spend money to make money." Customers are not willing to pay for a dead tree anymore, particularly a dead tree that contains no original, local news.