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Forty percent of the Top 50 US newspapers are bleeding red ink, says top CEO

Business Week’s Media Columnist Jon Fine did us all a favour by reproducing in it’s entirety a speech given by newspaper chain CEO Dean Singleton at the World Association of Newsapers’ annual conference, held this year in Sweden. Singleton (whose chain, News Media Group, owns Denver Post, San Jose Mercury etc.) opened his speech with a well-placed kick to the midsection of a prone Lord Black of Crossharbour:

Thank you for once again inviting me to address the World
Association of Newspapers. I spoke to you at the 2003 meeting in
Dublin. My speech was followed by a presentation by Hollinger’s Conrad
Black, who gave us all a lecture on arrogance, of all things.
Unfortunately, Conrad couldn’t be with us today, but I wish him all the best in his new home in Florida.

Drip
Once he’s had genteelly dispatched with Conrad Black, Singleton then put the boots to just about everyone else in the troubled newspaper industry in the US:

Some newspapers in the U.S. won’t make it through this transition. Others will print smaller newspapers on fewer days. By my estimate, as many as 19 of the top 50 metro newspapers in America are losing money today, and that number will continue to grow. The large metros are the hardest hit by change, and they’re the most difficult to change.
Too many whining editors, reporters and newspaper unions continue to bark at the dark, thinking their barks will make the night go away. They fondly remember the past as if it will suddenly re-appear and the staffing in newsrooms will suddenly begin to grow again.
Well, as a former journalist, I also wish for the past, but it’s not coming back. The printed space allocated to news and newsroom staffing levels will continue to decline, so it’s time to get over it and move to a print model that matches the reality of a changing business.

At a time when print circulation is declining by 2% – 4% per year, when ad revenue is shrinking even more drastically, when 2,400 journalists were laid off,when online revenue and readership is only re-capturing a fraction of what’s bleeding away, a few boots to the backside are probably in order if anyone is still standing still long enough to get hit by them.

But Singleton speech does more than issue clarion calls or whip recalcitrants — here’s some of his other key points:

  • Singleton estimates 19 out of the top 50 US newspapers are losing money and will fold or print smaller newspapers less frequently
  • Look for even more consolidation in the industry and an accompanying consolidation of tasks which will be done more centrally and then distributed
  • Cutting costs will become part of annual operations, i.e. these aren’t temporary measures

His company is embarking on a number of initiatives, including:

  • Tighter integration with (and dependence upon) Yahoo’s ad networks to hold and place all their online ads (!?!)
  • Retaining an outside consultant to design, from scratch, a news organization infrastructure that meets today’s challenges, as opposed to tinkering with systemsz that evolved to serve print alone.
  • Creating regional "marketplaces", hub sites, that include news sites, user-generated, customer feedback and user-generated ads.
  • In the next five years, move their revenue mix from: traditional print 89%, online 7%, new (niche) products 4% to 68% core, 20% online, 12% niche.

The whole speech is well worth reading. But be sure and read the comments — aside from revealing some real bitterness and anger over what’s happening within his chain, there’s some thoughtful material. (Thanks to Eric McGuinness for pointing this one out to me.
Bill
(Image courtesy Andrew Magill’s Flickr photostream, Creative Commons attribution licence)

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