Likely executives at our one and only community newspaper, the Salem (Oregon) Statesman Journal, will try to put a positive spin on today's announcement that Gannett is spinning off its newspaper holdings and USA Today -- separating them from its more lucrative assets: television and digital operations.
Download Gannett to spin off publishing business
But this is one more sign that newpapers are struggling in an increasingly online age.
And Gannett isn't fighting in a heroic fashion, having a goal of preserving high journalistic standards even if it means going out of business one day. Rather, as a Forbes piece puts it, "Gannett Spin-Off Makes the Score Wall Street 4, Public Service-0."
But when the notion of “maximizing shareholder value” is bandied about, we have to ask who are the shareholders that are demanding more “value,” which really means a higher stock price. Today’s shareholders are not individuals, but are huge institutional investors, such as pension funds, mutual funds and hedge funds that all demand outsized returns. They have a Wall-Street-Gordon-Gekko-greed-is-good mentality.
In the good old days (ahh, nostalgia) most newspaper and many magazine owners thought of their publications as delivering useful, important news and information to serve the public good, convenience and necessity, and were typically guided by the tenants of responsible journalism as well as, and often before, profits.
What seems to have happened in the four recent spinoffs is that the media companies involved have spun off anything that smacks of public service. Separate the profits from the journalism – keep the state, throw away the church.
Wall Street 4 – Public Service 0.
[Referring to three previous media company restructurings, plus Gannett.]
A New York Times story on the Gannett spin-off of its newspaper assets garnered some reader comments that made me think "right on" as regards the depressed journalistic state of the Salem Statesman Journal.
Here's a sampling:
The problem here isn't about print vs digital. That argument is dead, and print has lost. The problem is what is going to happen to journalism in the process.
This is just like the good ol' days when the rail companies threw away the railroads to keep the real estate businesses; now the newspaper and other print companies are throwing away the print and keeping the other businesses. It is obvious to everyone that print papers are dying, just like Life, Look and Time et al have died. The news is in your pocket and on screens in elevators.
"My local paper" which is a shadow of its former self is a Gannett property. So is the paper where I used to live, and it's also a shadow of its former self.
More importantly, this action is the result of turning over to a bunch of crass and greedy bean-counters a once-proud company that had been run by journalists and was committed to responsible journalism. A democracy/republic cannot survive without an informed citizenry, and this move further weakens the backbone of our nation.
"Media Giant Gannett to Spin Off USA Today and Print Business" . . . to die. Age old corporate strategy. Much lower shut down costs.
Where have gone the days when people who owned the papers were passionate about the news and breaking stories. Journalism is not just a commodity that is beholden to the bottom line. It's a lot like art in that if we don't have good journalism we lose a part of our humanity and some day it may mean our democracy. How much profit is enough? This may be the question of our times.
I was in Istanbul a few years ago and the citizens of that city had something like 17 daily newspapers from which to choose. Our incurious and ill-informed citizenry can barely keep a handful of major dailies limping along. The one in my region used to be among the nation's premier; now the entire paper is thinner than what a single section used to be and the reporting staff is mostly down to $30K/year newbies who couldn't have been hired there to sharpen pencils even 10 years ago let alone 25 or more. Sad.
This shows once again how much the Media giants care about "Journalism," whatever that quaint word still means today. As for Gannett, however, it hardly matters. One wonders if that company is even aware (let alone "concerned") that its "flagship" publication, USA Today, is often referred to as "McPaper," which is not an ethnic slur but word-play in reference to the menu at McDonald's.
Gannett spinning off its print business? Stands to reason. I'm old enough to remember the 1990s, when it closed down its journalism business.
This is a very sad additional indication of the dumbing down of America. "Those who CAN read but do not, are no better off than those who CAN"T read." As more and more become addicted to "instant news updates" or get their information from biased news sources without the details behind the stories, it will become easier for corrupt politicians to mislead the public into more and more scams and corruption. We are already one of the most basically ignorant citizenries of any country in the world.
The media companies are effectively tossing the newspapers into the corporate version of a sumac-shrouded backyard shed, with the old lawnmower and the broken spools of Christmas lights from the past.
Having read the Statesman Journal since 1977 (along with the Capital Journal for a few years, before it merged with the SJ), it's clear that the newspaper is a shadow of its former self.
This reflects the fact that, as a Gannett-focused blog says, "Gannett is now a TV giant with a side interest in newspapers, its mainstay business since 1906, when Frank Gannett founded the company with a single daily in Elmira, N.Y."
The Statesman Journal really isn't a community newspaper.
It is a corporate newspaper whose mission is to make money for Gannett. Reporting local news in-depth, doing solid investigative reporting, informing citizens about important issues affecting Salem -- these are sidelights now, distractions from the main job of getting enough eyeballs onto the print and online versions of the paper to keep its advertisers.
Sadly, the Gannett spin-off of its newspapers likely will make this situation worse. Another story in Forbes says:
The separation satisfies the cravings of investors who have expressed more interest in broadcast assets than in traditional newspapers, which have struggled with declining advertising revenues. As smaller and more palatable pieces to digest, the two companies will be better positioned to serve a natural shareholder base.
While the combined company may have been wary to pour capital into print operations that produced less upside for shareholders, the publishing business will now have greater cash flow to serve its interests. After receiving print asset stock options, new management will also be incentivized to maximize returns without the safety net of broadcast profits.
Yikes! "Incentivized to maximize returns" means the more profit new management sucks out of the Gannett newspaper business, the more money they personally take home.
Already the Salem Statesman Journal is filled with fluff rather than meaty (OK, tofu'y; I'm a vegetarian) reporting.
A lot of the content comes from USA Today; a lot is a recap of previous stories or reader comments; a lot is outdoors news that I could get online or from guidebooks; a lot is human interest profiles that are fine in moderation, but are out of place on the front page.
Which means it doesn't take me long to read the Statesman Journal, just a few minutes.
I also subscribe to the online New York Times and the print Oregonian, newspapers with considerably more substance. The look and feel of the Statesman Journal web site, like that of other Gannett papers, is a clone of USA Today's.
So the "community" aspect of our so-called community newspaper is fading fast from the local journalistic sky.
Old-timers like me remember when the Statesman Journal reflected the nature and spirit of Salem. Now, the paper just feels like a USA Today look-alike, with the content designed to siphon as much money as possible into the Gannett coffers.
A prescient December 2013 post from the Gannett Blog (not associated with the corporation) provides some great background on how the newspaper business got split off from Gannett's broadcast side. "Digital Divide: Along a journey to transformation, an aging publisher stumbles at a critical crossroads" is well worth reading.
The digital squeeze is all the more worrisome because it comes amid an accelerating decline in the company's still-biggest source of revenue, newspaper advertising, which fell 6% in the last quarter. To be sure, revenue growth pulls back as any company's financial base fattens. Nonetheless, a plateau this soon raises concerns about Gannett's drive to become a digital powerhouse amid bruising competition from more fleet-footed publishers like Facebook and Twitter.
It also underscores the importance of Gannett’s takeover of Dallas TV company Belo. The $2.2 billion tie-up, which could close any time now, is crucial to boosting revenue and earnings -- and holding impatient investors at bay. Indeed, analysts are already asking whether Gannett should spin off its fading newspapers into a separate company after Belo is absorbed, essentially sending them to the corporate equivalent of a nursing home.
Well, now the spin-off has happened.
The Statesman Journal and other Gannett newspapers have been shuffled off to the declining business home, while the cool young kids -- the broadcast and online businesses -- get investor and management attention.
Near the end of the lengthy post there's an apt quote from Warren Buffet, the well-known investor who still believes in newspapers -- yet warns of the sort of skimpy news coverage evident here in Salem.
"We do not believe," Buffett wrote, "that success will come from cutting either the news content or frequency of publication. Indeed, skimpy news coverage will almost certainly lead to skimpy readership. And the less-than-daily publication that is now being tried in some large towns or cities -- while it may improve profits in the short term -- seems certain to diminish the papers’ relevance over time."
The Statesman Journal needs to worry about losing subscribers from both ends of the readership spectrum.
Young people and so-so newspaper readers don't have much loyalty to a daily community paper, so they'll find it easy to dump the Statesman Journal and get the news they want online for free.
Older long-time readers like me are loyal, but not absolutely. We have a breaking point.
That comes when the quality of local news coverage is so poor, when the soup of investigative reporting has been thinned out to such an unsatisfying gruel, when editorial positions are so weakly argued and thought out -- the newspaper we used to read so avidly has become an annoying disappointment.
Hopefully this won't happen. But the news of the Gannett restructuring isn't a good omen for the quality of journalism at the Statesman Journal.