As Knight Ridder Goes, So May (print) News Industry (circulation down)

[DeepModem Mom]

LAT: As Knight Ridder Goes, So May News Industry
Investor pressure to sell the San Jose-based chain comes as papers across the country are losing circulation at an accelerating pace.
By Joseph Menn and James Rainey, Times Staff Writers


As big shareholders of Knight Ridder Inc. pressure executives to consider selling the nation's second-largest newspaper company, an increasing number of industry veterans say the fight's outcome could write the future of print journalism.

Like other chains, Knight Ridder has responded to readers and advertisers migrating to the Internet by investing in Web versions of the print product, cutting costs and experimenting with free papers.

But as industrywide circulation figures released Monday made clear, the most traditional form of journalism is losing ground at an accelerating pace. Of the country's 20 largest daily newspapers, only two sold more copies in the six months through September than they did in the same period a year before, and the overall 2.6% drop in weekday circulation was the biggest since 1991.

"Those who are responsible for running these companies have not been able to make the kind of adaptive changes they need to in order to stay competitive," said Bob Giles, curator of Harvard University's Nieman Foundation for Journalism.

Although newspaper companies still are more profitable than many other industries — operating margins of more than 20% are common — revenue is growing slowly and corporate owners are tending to funnel earnings into other areas rather than pay them out as dividends....


http://www.latimes.com/business/la-fi-knight8nov08,0,350692.story?coll=la-home-business

[achtung_circus]

1. On the flip side

Tuesday, November 8, 2005 Page A1

The Globe and Mail and a handful of other Canadian newspapers are bucking the trend across much of North America of declining circulation.

The Globe's average weekday and Saturday circulation both increased by 4 per cent in the six months that ended Sept. 30, according to figures released yesterday by the Audit Bureau of Circulation. The Calgary Herald and La Presse also posted gains.

By contrast, some U.S. newspapers lost 8 per cent in circulation.

(TYhis is one sweet part. The Post is a conservative/Conservative apologist) The National Post's average weekday circulation fell 4 per cent and its Saturday circulation by 3 per cent. The Toronto Star's weekday circulation fell 3 per cent and its Saturday circulation was off 2 per cent. Story, B3

<http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20051108/ABCNAT08/TPFront/TopStories>

[1932]

2. American middle class shrinking. Canada's growing.

You can't make only a few people wealthy and everyone else poorer and expect to sell more newspaper and magazine subscriptions.

It's not like rich people buy TWO copies of the new york times, and it's not like there's a luxury version on better paper that you can charge more for to tap into increased wealth among fewer people.

These newspapers sowed the seeds for the rise of the oligopoly and the polarization of wealth, and now they're wondering why all those they've helped the Republicans turn into debt slaves are ending their subscriptions? Come on. Get a clue.

[achtung_circus]

3. There is a rule of thumb for Toronto's 4 main newspapers.

These are also some of Canada's national chains, although the Star isn't quite there. It grew out of the employment ads carried by the various papers as being a reflection of their readership.

If you want to work on the loading dock, read the Sun.
If you want to be a manager, read the Star.
If you want to be the CEO, read the Globe.
If you want to buy the newspaper and fire the CEO, read the National Post.

Although I don't agree with the Globe's editorial positions in many things, it is the most thoughtful of the 4 papers.

[Rich Hunt]

7. that's funny

I'm not familiar with Canadian papers, but my own US fave is the Wall Street Journal.

[Judi Lynn]

4. So sad. The need for information is still there, and not being adressed.nt

[AX10]

5. Sadly it is.

[blm]

9. This is deliberate, imo. Certain shareholders demanded unreasonable rate

of return. These Bush cronies kept applying pressure hoping to bring down the quality of the reporting where it most counted, at the national desk.

KnoghtRidder's DC bureau was the only one doing its job covering the WH for the last 5 years. NYT and WP would love to see them go.

Bush's cronies are pushing for BREAKUP of the company and the papers sold off piece by piece - that move will ensure that the DC bureau takes the financial hit.

[ItsThePeopleStupid]

14. Editor & Publisher link--they think so too.

My initial research shows that top executives of Private Capital Management donated $112,000 in late 2003 and early 2004 to help President Bush and Dick Cheney get re-elected. On Nov. 6 and 7, 2003, in what would appear to be a coordinated effort, six PCM executives each gave the maximum of $2,000 to Bush-Cheney '04.

Then on the same day, April 8, 2004, the head of PCM, Bruce Sherman, and company executive Gregg Powers gave $50,000 each, or $100,000 total, to the Republican National Committee. Company executives gave no money to Democrats during the 2003-04 cycle, according to the Political Money Line database.

Say what you will about Knight Ridder's business practices, but when it comes to journalism, they do a remarkably good job of getting out of the way. Thus, the liberal editorial voice of the Daily News and the Inquirer, and the amazing work by Knight Ridder's Washington bureau, which was one of the few media voices casting doubt in 2002 and 2003 on whether Iraq had WMD and posed a threat to America.
http://editorandpublisher.com/eandp/columns/shoptalk_display.jsp?vnu_content_id=1001432946&imw=Y

I think they're being targeted b/c they didn't fall into line with regard to Iraq.

[blm]

15. I started 3 threads about this over the last 2 weeks to alert DU about

how Bush cronies were trying to silence the best investigative bureau in DC.

I am dead serious about this as an issue. But, I fear too few realize how important it is.

[1932]

16. They published the only article I've ever seen that was fair to Chavez

that was in the American MSM.

[AndyTiedye]

6. Canada and UK Newspapers Still Report News - Ours Don't

If the papers are going to deliver the same pablum that you can get on Fauxnews for free,
why bother with them?


In Canda and the UK, they actually report the news.

[KansDem]

13. "In Canada and the UK, they actually report the news"

It's sad that we don't have that kind of reporting in the States. The major newspaper in my "town," The Kansas City Star, is nothing more than a city newsletter full of fluff stories. I gave up on it years ago.

[Kolesar]

8. Papers cannot use telemarketers to sell their subscriptions

I think that is a shame. Newspapers were more honest than tv & radio in reporting the run up to the war in Iraq.

[hunter]

11. At some risk to my own secret identity, I will report....

That the San Jose Mercury News delivered to me without my consent a "free" newspaper and then took me to collections when I wouldn't pay for it.

[Freddie Stubbs]

10. If they hadn't spent so much money on that talking car

they would be in better financial shape.

[ramapo]

12. Newspaper readers growing old

I've been a newspaper reader since I was about six years old (44 years). Now I admit to being somewhat an oddball but neither of my intelligent, mostly well-informed, almost adult kids have EVER read a newspaper. Maybe an article here and there. I doubt that this is a habit that they'll ever acquire...

[Carolab]

17. It's a good thing.

I never read the newspaper. But I love reading news on the Internet.

It's faster, cheaper, and I don't have to flip the pages or worry if it gets wet in the rain. I can print out what I want in hard copy or save it to my hard drive, and share what I want with others via e-mail. I don't have to worry about the "editorial board" censoring content (well, not as much anyway). And I don't clip coupons or own a bird.

[blm]

19. No it isn't. The KnightRidder national desk nailed the cooked intel story.

And the DSM story.

If it wasn't for the national desk feeding their papers, the story would NEVER have seen the light of day.

The broadcast media went out of their way to ignore it every step of the way. We need the print media to reach more than those on the internet and the internet gets fed from the newspapers.

It's also GOP cronies of Bush trying to force the breakup of KnightRidder. They are using their shares to exert the pressure so they can divide it up into pieces and thereby diminishing the power of the national desk.

[Carolab]

22. I guess you're right.

If the papers fold a lot of people will be even less informed. Even though Knight Ridder can reach them through the Internet not everyone has access to or can afford it. I was thinking myopically.

[blm]

24. Sometimes it's easy to confuse the good media with the bad cuz there's so

damn many bad ones it feels overwhelming at times.

[PittPoliSci]

18. piss on Knight Ridder

The only thing I ever see printed by them any more is ridiculous rightwing bullshit. Good riddance.

[blm]

21. KnightRidder has the ONLY honest bureau in all of DC.

I think you must be mistaken.

[PittPoliSci]

27. maybe it's just the wingnut newspaper i read's fault.

finding all the shitty stories knight ridder published.

[brainshrub]

20. They deserve it! And they are missing out on major opportunities:

I wrote a short essay as to how major print publications are missing out on opportunities by demanding registration and not encouraging links.

Here:

www.brainshrub.com/registration-hurts

[onenote]

23. looks more like economics than conspiracy

I don't see any evidence that the pressure on KR by its investors is politically motivated. The newspaper industry is in decline. I don't think there is any conspiracy behind that, just changing markets and demographics.

onenote

[blm]

25. You don't see why a news organization making a decent profit has

shareholders (who just happen to be cronies of Bush) pressuring them NOT just to sell but to BREAK IT UP and sell it in pieces????

Especially after this news org. was the ONLY news bureau in DC to break and stay on the WH cooked intel story for THREE YEARS and then the Downing Street Memos?????

[onenote]

26. actually, what I see is a company that is struggling

and that is seeing its earnings and profits decline precipitously, , whose major stockholders (not just PCM) believe that the value of the companies assets are not reflected in the price of the stock, and who are calling for the company to be sold, preferably as a whole, but in pieces if that's what it takes for them to obtain a reasonable return on their investment. What I don't see in this situation, any more than in the demands by Carl Icahn that Time Warner Inc sell off its cable subsidiary, is any evidence of a political motivation.

onenote

[blm]

28. Except KR had been turning out a steady 15% profit.

.

[onenote]

29. by cutting jobs

KR has, along with the rest of the newspaper industry, struggled with flat to declining revenues as subscriptions and ad sales have dropped or stagnated. While the newspaper industry historically has shown profit margins in the 20 percent range, keeping up profits at KR has been accomplished, despite falling revenues, by cutting costs, selling off assets, etc. Those are short term stop gaps. As revenues continue to decline, there is only so much cost cutting that a company can do. Again, I have yet to see evidence that investor dissatisfaction with KR (which includes not just PCM, but other large investors) is driven by politics rather than by the desire of investors to maximize their returns.

onenote

[blm]

30. You get into the news business to further an important service to the

country. You don't get into NEWS to get rich. Bush cronies got into news to EFFECT the output. They have done it with CNN, NBC, ABC and CBS.

Did you even read the KR reporter's take that was linked above? He's right in line with my take.

And getting into the NEWS BUSINESS to get rich is like going into the army or teaching to get rich.

[onenote]

31. you don't into news to get rich? Tell that to William Randolph Hearst

You don't become a reporter to get rich. But most folks who run newspapers, and invest in newspapers, do expect to get rich -- and to the extent that they are publicly held companies, the management has a fiduciary duty to their stockholders to maximize their return. The list of the nation's wealthiest Americans includes any number of people who started their fortunes in the newspaper business, including Murdoch, the Newhouse family, the Grahams, etc. Many of these branched out into broadcasting and other media properties, but they didn't get into the newspaper business as charity.

And yes, I read the article by the KR reporter. He's concerned about the company being sold. But the facts are that the cost cutting measures that he fears will occur if Gannett buys the paper are happnening now, under current management, in order to keep up profits. I simply don't see any evidence that KR's investors are trying to anything more sinister than get a bigger bang for their buck. If Gannett will pay $80 a share for stock that is currently selling below $60, most investors would jump at it, without regard to whether Gannett is conservative, liberal, or anything else.

Yes, PCM is a bunch of repugs. But I still don't see proof that they are doing anything other than looking out for the financial interests first. From what I've read, PCM has lost $100 million of the $840 million in spent buying KR stock, so its not surprising that they want to shake things up. Their approach apparently is to look for cash-flow oriented companies (like newspapers, theatre chains etc) with the assumption that if the market doesn't recognize the stock's true worth, one of two things happens: The company will buy back shares, or it will seek some type of strategic alternative such as a sale.

I'm not saying the sale of KR would be a good thing, I'm just saying that I don't see evidence that PCM is taking a position contrary to its economic self-interest for political reasons.

onenote

[blm]

32. Not back in 2000 when they bought the shares. It was already apparent

that papers were losing ground to the internet.

The old stories from the early part of the last century are no longer relevant to the point.

[ItsThePeopleStupid]

33. E&P: PCM, in New Filing, Says It May Seek New Knight Ridder Board

Published: November 10, 2005 10:55 AM ET


NEW YORK Private Capital Management (PCM) filed an amendment with the Securities and Exchange Commission this morning seeking further action involving Knight Ridder, including nominating directors to the newspaper company's board.

PCM cites Knight Ridder's "limited response" to its well-publicized letter dated Nov. 1, which called for the sale of the company or parts of it. Knight Ridder has acknowledged the filings and said it would reply in "due course."

But PCM is reviewing its options including the possibility of nominating "a slate of directors for election by shareholders" at Knight Ridder's 2006 annual meeting.

PCM holds a 19% stake in Knight Ridder making it the company's largest shareholder. Shortly after it called for the sale of the company, two additional shareholders followed suit. On Nov. 3, Harris Associates, which holds 8.1% of Knight Ridder shares, also filed a letter with the SEC seeking a possible sale of the company. On the same day, Southeastern Asset Management said it wanted to open discussions about a possible sale. It owns 8.9% of Knight Ridder stock.
http://editorandpublisher.com/eandp/search/article_display.jsp?vnu_content_id=1001477477