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More News from Detroit

The automakers aren't the only ones from Detroit making the news.

While GM and Chrysler wrestle with their own survival, the two newspapers in Detroit began their own struggle to stay afloat. On Monday, the Free Press and News became the first major U.S. metro dailies to cease daily delivery to subscribers.

This move was planned and announced in December last year. The papers now will be delivered to homes on only Thursday, Friday and Sunday. The rest of the week, a condensed 32-page printed paper is available only at newsstands.

Or off a subscriber's own computer. The papers now may be downloaded and printed, in its entirety, along with click-screen capabilities, from a specially-designed web site. Yes, instead of having your dog fetch the paper off the driveway, he may now go get the e-edition - a stack of letter-size paper - off your printer.

The frenzied first day crashed the paper's server for the digital edition, forcing long delays and complaints. Management dashed off a quick memo to the papers' staffs to deal with irate callers. The short memo, obtained by Media Watch:


DETROIT, Mich., March 30 - Users of the electronic editions, exact copies of today's printed Detroit Free Press and The Detroit News, are temporarily experiencing longer wait times for information to load. This delay is being caused by higher than anticipated demand during this peak time. The Detroit Media Partnership is working with its vendor, Tecnavia, to rectify this situation and broaden digital capacity.

More than 500,000 print copies of both newspapers are available for free at more than 18,000 retail locations where the newspapers are usually sold.

The timing of the new initiative, while it was pre-determined well in advance, also worked out to the papers' detriment. Besides the ongoing battles of GM and Chrysler in Washington, Michigan State's basketball team won on Sunday to advance to the Final Four - to be hosted next weekend at Ford Field in Detroit. The event is anticipated to be the biggest in Motown since the Super Bowl in January 2006, as crowds of 72,000 are expected at each of the three games.

The papers put on a full-court press of its own Monday, sending out scores of people to hand out free papers all over Detroit. But some of their older readers weren't quite prepared for the revolution:

To Carol Banas, a retired city planner and longtime Free Press reader, the idea of not having a printed paper is unimaginable. "I'm at the age where I like my newspapers in hand," said Ms. Banas, 56, who read a hard copy of Monday's abbreviated Free Press in an Einstein Brothers Bagels shop in Royal Oak. "I know that's English online, but it's not the same."

Ready or not, the Detroit papers are pressing on with their new digital initiative, one that will be observed closely by everyone in the industry from coast-to-coast. David Hunke, CEO of the Detroit Media Partnership, said during Monday's luncheon at the Detroit Economic Club that the e-edition is merely the first stop on the digital super highway for newspapers. The next is e-Reader, a Kindle-like device the papers plan to push out by 2010.

Paycut Times, Layoff Post and Furlough News

A day after the Washington Post Co. disclosed that it lost $25 million in 2008 and will offer employees buyouts to offset even more losses this year, the New York Times Co. announced that it is imposing a temporary 5% paycut for most Times employees.

The cuts is to be felt company-wide, including at the Boston Globe, a few smaller newspapers and also at About.com. The paycuts will last from April through December 2009 - unless economic conditions fails to improve, then it might be extended. The Times also said that about 100 employees on the business side of the company will be laid off.

The good news (of course, everything being relative) in the newspaper business is that only one paper - Ann Arbor News - has announced that it's shutting down since the Seattle Post-Intelligencer ceased publishing as of March 17. The Tucson Citizen, which was supposed to close up shop on March 21, is still in business as of today.

But in the first quarter this year, three newspaper companies have already filed for bankruptcy, and the rest have resorted to severe measures to cut cost, including paycuts, layoffs, buyouts and furloughs. These announcements were all made within the last 30 days:

* Hearst: San Francisco Chronicle - concessions from the guild, with about 100 employees expected to take buyouts; Houston Chronicle - 12% staff will be laid off; San Antonio Express-News - 75 newsroom positions to be cut.

* Gannett: After a mandatory unpaid one-week furlough was imposed on all employees in the first quarter, the company is repeating the measure in the second quarter, including at flagship USA Today. Some higher salaried employees may face a reduced salary for a second week.

* Newhouse: At papers such as The Star-Ledger (Newark, N.J.), The Times-Picayune (New Orleans) and The Plain Dealer (Cleveland), a 10-day furlough will be imposed and pensions are frozen.

* McClatchy: Announced that 1,600 employees, or 15% of its workforce, will be laid off and the rest will get paycuts. Particularly hard-hit is the troubled Miami Herald, with over 200 jobs being eliminated. At other papers, including the Raleigh News & Observer, Kansas City Star and Sacramento Bee, 5-10% paycuts will apply.

* MediaNews: The Denver Post employees OK'd cuts in wages and benefits. The company's other papers in the Los Angeles and San Francisco Bay metro areas might be hit with a second round of mandatory non-paid furloughs, similar to Gannett's.

Amidst all the layoffs and cuts, the Monday debut of the new print and delivery plan by the Detroit newspapers will be closely watched by everyone in the industry. The Free Press and News will be delivered just three days a week (Thursday, Friday and Sunday) and the print edition runs will be drastically reduced. This model, if successful, may be widely emulated, as newspapers continue to grasp for a way out of a seemingly irreversible death spiral.

Washington Post Hits the Skids

In these tumultuous times for newspapers, no one is immune. Even the Washington Post, one of the more stable and profitable papers in the country, is facing a number of hard choices financially.

In a 2,000-word letter to Washington Post Co.'s shareholders released yesterday, company chairman Don Graham disclosed that the news division - dominated by flagship Washington Post - lost nearly $25 million in 2008 and is expected to lose "substantially more" in 2009.

Responding to the gloomy outlook, the Post announced that it will be offering voluntary buyouts - its fourth since 2003 and the first since May 2008, when more than 100 staffers took the buyouts.

Graham conceded that beyond the immediate losses, he is still grasping for solutions to turn around a business that's seemingly on its deathbed:

So what's the future of the newspaper and news magazine businesses? I have no answer to this question. ... Today, it isn't obvious that even the best-run, most successful newspaper can be consistently profitable. But The Post will get every chance. ... We are willing to lose money ... if the losses are on a path to a healthy, profitable business.

Are we investing in The Post and Newsweek as a public service or because we feel their business models can be fixed? Emphatically the latter: it is universally understood that we must move toward profitability at The Post and Newsweek after what we hope will be a low point in 2009. But how we'll get there is not clear. We must cut costs; but we must (and will) continue producing excellent newspapers and magazines. Then, we have to continue to find new sources of revenue (at a time when some of our customers will be cutting back because of their own financial problems).

The Post Co., which also owns Newsweek, Slate, Kaplan education and Cable One, is trading at $380 a share, down from $800 at the end of 2007.

Huff Post: Future of Journalism?

With newspapers dropping dead like flies in a bug-zapper, the search is on to find their replacement in the media world. One name has emerged as a potential model for the post-newspaper era: The Huffington Post.

Founded in 2005 and backed by Arianna Huffington (whose divorce from oil magnate Michael Huffington netted her millions), the Huffington Post initially presented itself as a counter weight to the right-wing Drudge Report. Over time, however, it has moved to include both news coverage as well as commentary on the site.

With over 11 million unique visitors monthly, HuffPost's audience is roughly the combined total of the Drudge Report and Politico, its two main competitors. But success brings more scrutiny. HuffPost's practices are increasingly coming under the microscope - and some observations are not so flattering.

In a feature in Time magazine, it was noted that:

HuffPo is not made for people who like their news straight. As the situation in Iraq got boggy, the economy soured and the Bush Administration's popularity face-planted, folks wanted a place to vent. And when the Obama phenomenon took off and Wall Street collapsed, they wanted a place where they could both celebrate and vent more. HuffPo was the easiest, most satisfying place to do it.

"We like to expose hypocrisy," says Katharine Zaleski, the site's news editor. The Huffsters see what they do as curating the news: finding the good stuff from other sources and artfully exhibiting it for the enrichment of the more educated, liberal news consumer. And yet the site's most viewed stories often have to do with the trivial -- every garment in Michelle Obama's wardrobe gets its due -- and the racy. It's improbable that anything like the wildly popular HuffPo slide show of Pamela Anderson's disturbingly shaped nipple would be featured on, say, Politico.

The most serious - and frequent - accusation Huffington Post faces is plagiarism. An outright content theft incident in December left Arianna Huffington defensive - she blamed it as a mistake by an intern.

Other HuffPost tactics are also coming under fire. For one, its comments sections are lightly patrolled - the site has a staff of 28 editors. Profanity and mudslinging on its blogs are par for the course. Finally, its aggregation methods are beginning to get noticed. Its search-engine optimization success has increased pageviews. And often the search led to a HuffPost article that "borrowed" heavily from other original sources.

At least one analyst sees a potential war brewing between Old Media and Huffington Post.

(N)ews organizations may not tolerate others cherry-picking their content and repurposing it for profit for much longer. "Someone is going to sue the Huffington Post," says Joshua Benton, director of the Nieman Journalism Lab at Harvard University. "It's not just about the volume of the content that it appropriates, it's about the value." There are other aggregators, but HuffPo is the most tempting. "It's a big player, and the site that has got closest to the line" between fair and unfair use of copy, Benton notes.

Like it or not, Huffington Post will be a force to be reckoned with for some time to come. Last December, it secured $25 million in funding from Oak Investment Partners. With the cash infusion, Huffington laid out her goals: "This commitment from Oak Investment Partners will allow us to accelerate our growth, with more verticals, more video, more citizen journalism initiatives, more cities for our local editions, and a fund for investigative journalism."

Ann Arbor News to Close

It's the sign of the times, particularly in the beleaguered state of Michigan. On Monday, Ann Arbor News announced that it will be ceasing publication in July, going entirely online as AnnArbor.com.

Ann Arbor News began publishing in 1835, two years before the state of Michigan was admitted into the union. Now owned by the Newhouse family, it's one of the few papers still publishing in the afternoon during the week and mornings on Saturday and Sunday.

Its current web site, mlive.com, is a top 1,000 site with traffic that outstrips much larger Detroit papers, the Free Press and News. The reason for such robust web traffic is simple - mlive.com (and Ann Arbor News) covers the University of Michigan and its powerful athletic programs, whose football team is the winningest in history with a national fan base from coast-to-coast. There is little doubt that while the paper is losing money, ownership wants to maintain the web presence, which may be achieved without as much cost.

The demise of the paper, however, brings back a flood of memories for this scribe. I got my first job as a paper boy for Ann Arbor News, while a sophomore at Huron High School. I'd come home from school, go to the curb where the bundles of papers were dumped off and fold and stack them into the bag hanging from the handlebar of my bike.

I'd usually take a little time to read the paper before navigating through the snow and ice to deliver them. My job also required me to collect subscription fees and also solicit potential subscribers. I won a contest once for being the top-producing paperboy and was invited to the downtown office to receive a plaque. My real reward (get this, it'll never happen today with all the health-police around) was four flats of Pepsi-Cola, 96 cans that I stored under my bed and lasted me all winter.

This was the job that endowed me with a sense of ownership, for the first time. I might be 15, but I was operating as an independent contractor, with obligations and incentives attached to my performance. Those were the heady times when even young boys (and girls) were entrusted with certain responsibilities that seemingly would not be granted to the succeeding generations. It was a bygone era quickly fading into history books.

Of course, newspapers probably will cease to exist sooner than later. With it, the term "paper boy" will be filed away with other anachronisms such as typewriters, cassette players, VCRs and Atari game consoles.

Satellite Radio: Not Dead Yet

Only a month ago, satellite radio seemed to be on its deathbed. The merger late last year of Sirius and XM didn't improve the medium's prospects. The new Sirius XM was bleeding money almost as badly as the New York Times. Bankruptcy, and perhaps extinction, were just months away.

Well, give CEO Mel Karmazin credit. Sirius XM is not quite dead yet. In fact, he thinks there might be a way out of the current predicament.

First, Karmazin secured a $530 million cash infusion from Liberty Media, which also owns DirecTV. Now, he's setting his sights on iPhone and fending off Internet radio.

In an extensive interview with Fortune Magazine, his first since the Liberty deal last month, Karmazin laid out his battle plan:

Karmazin doesn't dismiss the threat posed by Internet radio. In fact, Sirius XM is about to join Pandora and AOL Radio in offering its own Apple (AAPL, Fortune 500) iPhone application, thereby allowing iPhone users to stream Sirius or XM via 3G wireless. Still, he's dubious that computer-generated song playlists can compete with Howard Stern or Bob Dylan.

"I'm starting at a premise that says radio is not just recorded music - radio is discovery of new music," he says. "Some people would like to be able to hear songs they haven't heard before and that are not on their iPod. Some want to listen to CNN or Howard Stern, and not just to music. That's why we have a laserlike focus on getting content - because we think that content is what wins."

Sirius stocks has seen an uptick since the Liberty deal, trading at roughly 40 cents a share, up from the depths of 6 cents.

Karmazin may have gotten a lifeline and a bit of breathing room, but he knows he doesn't have a lot of time to turn things around. Not in this economy. Not with Detroit's Big Three - satellite radio's best promotional tools - teetering on the brink. And in fact, some in the industry think that nothing will prevent satellite radio from going under.

In the same article, Martine Rothblatt, the founder of Sirius, says satellite radio was doomed by FCC bureaucracy that delayed its launch more than 10 years ago. In the meantime, terrestrial radio and Internet radio have had time to regroup and improve, respectively, to squeeze out satellite radio's potential advantage.

(Martin Rothblatt founded Sirius in 1990 and had a sex-change operation four years later and became Martine. Stern, the megastar of Sirius, has referred to her as the "Martine Luther Queen of radio". But we digress.)

"There has been a huge growth in terrestrial alternatives," says Rothblatt. "As we move from third-generation to fourth-generation cellular, there's going to be ever more bandwidth available to distribute content totally via terrestrial cellular infrastructure. And that will leave fewer and fewer unique market attributes to satellite radio. ... Technologies have their ideal times and places, and in my opinion the better time for satellite radio was 10 years ago."

P-I Gone, Who and What Next?

Today marks the end of the Seattle Post-Intelligencer as a newspaper. The web site seattlepi.com will live on as but a shell of its former self.

Despite coping with uncertainty for the past two months, the staff at the P-I put forth all it had for the final edition. The cover of the last paper, of course, features the P-I's iconic globe glowing in the dark.

The 146-year-run of the P-I, which began as the Seattle Gazette in 1863 and bought by William Randolph Hearst in 1921, came to an end after the parent Hearst Corporation decided it was tired of losing money at a paper where circulation was shrinking at an alarming rate in recent years. By making the paper an online-only entity, Hearst is experimenting with a future concept that may be the destiny of newspapers. The fate of P-I's web site will be closely monitored not only by other Hearst papers such as the San Francisco Chronicle and Houston Chronicle, but other newspaper operators from across the country as well.

That the P-I and the Rocky Mountain News folded in the first quarter this year is but a sign of the times. More papers will surely follow. The financial crisis has been cited as the primary reason for the demise of newspapers, but it merely accelerated it. The business model was broken, so it was merely nudged toward the cliff a little sooner than expected.

The more forward-thinking types have already moved on, that includes Clay Shirky, a well-known and respected industry analyst:

There is one possible answer to the question "If the old model is broken, what will work in its place?" The answer is: Nothing will work, but everything might. Now is the time for experiments, lots and lots of experiments, each of which will seem as minor at launch as craigslist did, as Wikipedia did. ...

Any experiment ... designed to provide new models for journalism is going to be an improvement over hiding from the real, especially in a year when, for many papers, the unthinkable future is already in the past.

The death of the P-I is but one of the many funerals for newspapers in 2009, and beyond. Only a month ago, we produced a list of newspapers most likely to fold, and as of today Nos. 1-2 are already gone and No. 3 is to be reduced to an "edition" of another paper soon.

As with the Rocky, the P-I went out with a bang, in an interactive, multi-media splash - photo gallery, and video:

Seattle P-I, R.I.P.

After allowing the employees of the Seattle Post-Intelligencer to twist in the wind for the better part of a month, the parent Hearst Corporation finally put the paper out of its misery. Tuesday's edition will be the P-I's last in print, ending a 146-year run.

Hearst will maintain a skeletal web site run by some of the P-I staffers, though the vast majority of the 167 employees will lose their jobs. The P-I becomes the second major U.S. metro daily to shutter in as many months, following the Rocky Mountain News' demise in February.

The P-I's former JOA partner Seattle Times may stand to benefit, but the impact may be limited. The Times, owned by the Blethen family, is having its own financial crisis. Just last month, the paper lobbied the Washington state legislature to grant tax relief. From Seattle Times publisher Frank Blethen in a statement:

Though The Seattle Times and the Seattle P-I have been fiercely competitive, we find no joy in the loss of any journalistic voice. Today's announcement is an acknowledgement that in the current economy it is a struggle for even a single newspaper to be profitable and impossible for multiple papers in a single market.

With the P-I closing, Hearst is moving ahead in its effort to keep the flagship San Francisco Chronicle operating. By a vote of 333-33, the paper's guild ratified a new agreement with management on Saturday, allowing a number of concessions. Teamsters, representing the paper's pressmen and truck drivers, is now the last union that must ratify the new proposal.

Carl Hall, the guild's lead negotiator, said of the agreement: "This is the start of the real battle. We have to find a solution, a real solution, to save what we really care about here - quality journalism and qualify jobs."

The Sorry State of the Media

Pew Project for Excellence in Journalism released its annual "State of the Media" report for 2009 today. In it, of course there's much gloom and doom for an industry that's had a difficult year, particularly newspapers and magazines, which were the hardest hit by the recession.

One sector that's not only escaped the financial downturn unscathed but also managed some growth is cable television. Audience for cable was up 38% in 2008 than from the previous year and the industry, with a model based on both subscriber fee and advertising, is proving to be highly profitable.

On the other hand, local television news is getting hammered as much as newspapers and magazines are. In an election and Olympic year, when advertising revenues and audience typically spike, there was actually a 7% and 4.5% decline, respectively.

And everywhere else, it's bad news, including for online media, where advertising growth has come to a screeching halt. Advertising revenue is down for every part of the media industry, except cable TV. The worst hit is the newspaper business, where ad revenue declined by over 10% in 2008.

The gloom-and-doom report summed everything up with the pronouncement that there is no magic bullet to cure all that's ailing the media. Time magazine's M.J. Stephey summarizes it as such: "(I)f the solutions aren't obvious, the report's overall message is: Will the future leaders of journalism please, please stand up?"

Click here if you want to print out the entire report.

Whither J-School?

About a week ago, a friend - a sportswriter at the L.A. Times - was going to give a talk at a Southern California journalism school. He was seeking advice.

Most of us just told him, "tell them to get out while they still can," and that wasn't meant as a joke. Given the state of the media industry, particularly print publications, one must be borderline insane to be seeking a career in newspapers or magazines these days.

But the world still needs journalists. And since journalism schools are still in business, they must find ways to attract new students to justify their raison d'etre. Many of them started developing programs to train young journalists in the concept of "New Media," including Columbia, one of the more prestigious J-schools.

Shockingly, such an obvious sign-of-the-times maneuver has met fierce resistance:

But the push for modernization has also raised the ire of some professors, particularly those closely tied to Columbia's crown jewel, RW1. "F*** new media," the coordinator of the RW1 program, Ari Goldman, said to his RW1 students on their first day of class, according to one student. Goldman, a former Times reporter and sixteen-year veteran RW1 professor, described new-media training as "playing with toys," according to another student, and characterized the digital movement as "an experimentation in gadgetry."
(Emphasis mine, expletive redacted)

Quite a whopper, isn't it? This New York Magazine piece went on to describe part of Columbia's challenge is that "many of the tenured professors haven't worked in new media themselves, their classes require the addition of tech-savvy adjuncts. ... The school has been trying to do away with this added expense by training the professors themselves, but this takes time Columbia doesn't necessarily have, given the rapid implosion of the industry it serves."

Let's face it, journalism is a trade, not an academic pursuit. J-schools are meant to allow students to acquire a particular skill-set in order to get jobs. In fact, any J-school worth its salt today should provide students courses in the business of journalism to better equip them to adapt to the rapidly changing landscape.

Martin Nisenholtz, head of New York Times' digital operations, offers just such sage advice:

I also think it's a good idea for journalists to have a basic understanding of business; after all, journalism is a business in the United States and journalists should understand the basics of the businesses they work for. Regarding entrepreneurial skills, the best way to learn them is to work in a startup or early-stage business. Talk to accomplished venture capitalists. Read some of the better venture capitalist blogs. Dive in.

Most of all, don't Eff the new media. That might be the only media left in the near future.

NYT Makes Right Move with Douthat

Ever since the New York Times parted company with Bill Kristol in January, speculations abounded on when and if the Grey Lady would pick another conservative columnist. Let's face it, at the moment, every one of the NYT's op-ed columnists voted for Barack Obama, including the purportedly center-right David Brooks.

Then, on Wednesday, the Times made a surprise and bold move - a brilliant one, perhaps, by picking Ross Douthat to succeed Kristol.

The Atlantic was effusive in its praise for Douthat (pronounced DOW-thut). From associate editor Marc Ambinder:

Ross is late-twenties-year-old public intellectual with the sensibility of a 60-year eminence grise, the range of a Hitchens, the pitch of a conservative AJP Taylor, the conscience of a Neibuhr and the intellectual honesty of his frequent sparring partner, Andrew Sullivan.

It's heretic for a new media pioneer to say this, I guess, but the New York Times remains the most influential journalistic force in the modern world, and its opinion columnists consistently shape policy, government and public opinion. ... The Atlantic has been a fabulous perch for Ross, but the Times offers a vantage point that is irresistible.

Douthat, who will turn 30(!) this year, is a Harvard graduate who's written for a number of conservative publications, including as a film critic for National Review. Contributors to NR's blog 'The Corner' also chimed in on the Times' choice:

From Mike Potemra: I feel the way conservative Catholics felt the day Ratzinger was elected: what a bold, surprising, great choice. Congratulations to Ross, and the NYT.

From Yuval Levin: Ross Douthat will be a fantastic columnist, and one of very few reasons to read the New York Times. A young man with an old soul, a sharp pen, and a deep sense of the connection between culture, politics, and the great human questions. He's a friend, so I'm not objective, but I'm sure I'd think it even if he weren't: Good for the Times and good for the rest of us.

Eyal Press at the liberal-progressive The Nation, has a problem with the choice - he thinks Douthat is not conservative enough:

So what's the problem with this hire? The problem is that it will not give readers of The Times any clue what most Republicans today - certainly those holding the reins of power - actually think. America's preeminent newspaper will now have two conservatives (David Brooks is the other) chiming in to argue that government isn't always evil, that tax cuts aren't always good, that something really does need to be done about health care, that markets aren't always wonderfully virtuous, and so on. This will make it a lot easier for progressives to put down their coffee in the morning without feeling queasy. It will also make it that much easier for conservatives to argue - accurately - that The Times is out-of-touch with their beliefs.

Douthat will start his online columns in mid-April, with columns in print to follow shortly after. He'll also, according to the Times, blog for the paper as well.

Eli Broad Interested in L.A. Times

Real estate mogul and philanthropist Eli Broad says he's still interested in purchasing the Los Angeles Times - if the price is right.

Broad came close to buying the paper in 2007 before Sam Zell stepped in and took over the parent Tribune Co. in a $8.2 billion deal. In less than two years after Zell's debt-laden acquisition, the Tribune Co. filed for bankruptcy protection, putting many of its newspaper properties in peril, including the Times, Chicago Tribune and Baltimore Sun.

During a symposium in Manhattan, Broad said he hasn't ruled out using his charitable foundation to buy the L.A. Times, provided that it's in a bankruptcy sale - i.e. could be scooped up for cheap.

"We can't afford to lose good newspaper journalism, investigative reporting," said the 75-year-old billionaire. "I would like to see our foundation and others join together to own the LA Times. (But) I am not sure it can be a national paper, or have the same aspirations it once had."

Broad conceded that he has no answers to the newspaper woes that have put the business on the brink of collapse throughout the nation. He mentioned tying up the Times with the Washington Post - the two papers already form a joint wire-service. But he also said that newspapers may ultimately have to be run as non-profits.

"No one has figured out a good business model as of yet," Broad said. "Newspapers ought to be owned by foundations, not look for great financial returns."

The Last Days of P-I

Today won't be the last day of the Seattle Post-Intelligencer as a daily newspaper, as it had been widely speculated. The parent Hearst Corporation said in an e-mail to the P-I staff that: "We are still evaluating our options. Timing of the decision is uncertain."

But make no mistake, the end is near. By all indication, Hearst intends to turn the P-I into an online-only operation with an emphasis on aggregation and blogs. When that happens, the P-I would become the second major U.S. metro daily newspaper to fold following the demise of the Rocky Mountain News on Feb. 27.

As if to perform the last rites, the P-I employees were allowed to pose in front of the paper's iconic rooftop globe yesterday for posterity.

Ken Lambert, Seattle Times

In the past two weeks, Hearst has courted selected writers and editors for the proposed online-only P-I. Assuming those ranks were filled, the site will continue without a hitch while the print edition shuts down. In any event, the morale in the P-I newsroom could not be lower, with the minds of the employees already elsewhere:

There's also an emotional and group-think element that's making people agree that this week will bring the last-ever print P-I--or, at least, should. First of all, what kind of employer tells a group of 170 competitive journalists that they're about to lose their jobs, then picks about 20 of them to stay employed in an online-only project ..., then throws the chosen back into the general population, and then lets that stew of jealousy and resentment simmer for a week or so? Not a good idea. As one reporter put it last week, the current vibe in the newsroom is: "Put us out of our misery already."

While Hearst cleans out the P-I, it continues to work on saving its flagship San Francisco Chronicle. Management has tentatively agreed to a deal with the guild, with concessions granted to keep the paper operating. A bigger obstacle, however, remains the Teamsters, who represents the non-editorial staffs including truck drivers. Teamsters may yet to decide to scuttle the negotiations and dare Hearst to shut down the paper.

Members of the guild are expected to ratify the agreement, as outlined in the memo below obtained by Media Watch:

MONDAY March 9, 2009

Tentative Agreement in Chronicle-Guild Talks

Negotiators for the Guild and the San Francisco Chronicle reached a tentative agreement Monday night on proposed changes to the collective bargaining agreement in connection with cost cuts planned by the company.

The agreement will require approval by Chronicle Unit Guild members. A ratification meeting will be scheduled as early as Thursday of this week. Time and place will be announced on Tuesday as soon as a large enough facility can be secured.

In view of the latest terms agreed today, the Guild Negotiating Committee recommends membership approval.

The terms reached late Monday include expanded management ability to lay off employees without regard to seniority. All employees who are discharged in a layoff or who accept voluntary buyouts are guaranteed two weeks' pay per year of service up to a maximum of one year, plus company-paid health care for the severance term, even in the event of a shutdown - which today's agreement is designed to avoid.

Guild membership will remain a condition of continued employment for all employees. However, new hires in certain advertising sales positions will be given the option of membership, even though they will retain Guild protection under the contract.

On-callers will be limited to no more than 10 percent in any classification or department.

Pension changes are not part of this agreement, but are being discussed by pension authorities and must be implemented under terms of the Pension Protection Act, due to the recent declines in investment markets. Because those changes may affect the decisions of many members concerning buyouts, we are attempting to reach some key understandings now as to the nature of the changes and when they will take effect.

A lunch-hour meeting on Wednesday March 11, with our pension plan's lawyer will be held at the Guild Office, 433 Natoma, Third Floor Conference Room.

A bulletin summarizing all the proposed contract changes will be issued Tuesday. A set of the complete proposed amendments will be available on the Guild's Web site (mediaworkers.org) as soon as possible.

Management is seeking to change the union contract as part of an attempt to cut costs and keep the paper operating under the ownership of the Hearst Corp.

The company said Feb. 24 it would sell or close the paper unless the Guild agreed to changes in the labor agreement in effect through June 2010.

Just up the road in Sacramento, the union accepted a severe paycut so the troubled parent company McClatchy may continue to keep publishing the Bee. Nevertheless, McClatchy, which also owns the Miami Herald, Fort Worth Star-Telegram and Kansas City Star, is expected to slash 15% of its workforce, or about 1,600 jobs.

Great "News" for Conservatives

The presidency of Barack Obama has proved to be a boon for conservative media. Rush Limbaugh and Sean Hannity have relished being targeted by the administration by name. And Fox News is continuing its reign as the ruler of the cable news universe.

While Fox News remains comfortably ahead of MSNBC and CNN in total and prime-time ratings, it has vaulted into second place in prime-time among all cable networks, behind only USA. Fox News' prime-time audience (2.8 million) easily doubled CNN (1.3 million) and MSNBC (1.1 million). Through February, Fox News has led the cable news ratings for 86 consecutive months.

Standing athwart of the Obama tide and yelling stop has been great business for Fox News, whose overall ratings jumped (21%) in February while CNN's declined sharply (44%). While claiming that its news programming is non-partisan, Fox News has benefited from its commentators' vociferous criticism of the Obama administration. The top three rated news talk shows currently are, in order: Bill O'Reilly, Sean Hannity and Glenn Beck.

Hannity's show has gotten a lift (up 38%) since shedding his hapless liberal sidekick Alan Colmes in January. But the addition of Glenn Beck to the 5 p.m. slot has proved to be a ratings bonanza that's beyond even the network's expectations. Beck, 45, who hosted his show on Headline News the last two years, has doubled the ratings for the time slot since joining Fox News in January. "I look at the ratings every day shocked," he told the L.A. Times.

The liberal-led lineup of MSNBC has also gained ground, getting a huge boost from Rachel Maddow in the 9 p.m. slot. Maddow, 35, is now regularly beating CNN's old war horse Larry King, whose show is now the lone CNN prime-time program in the top 20 in cable ratings.

Just how bad are things at CNN, the erstwhile industry leader and purported "centrist" in the cable news war? For two days last week, it was beaten by Headline News in prime-time. Yep, the little-sister network did it with Nancy Grace, whose coverage of the sensational Florida murder mystery of Caylee Anthony topped Anderson Cooper in the 10 p.m. slot.

A Glimmer of Hope for P-I?

It may be only days before the Seattle Post-Intelligencer goes the way of the Rocky Mountain News. Its parent Hearst Corporation has set a March 10 deadline to find a buyer or it may shut down the paper.

While no serious buyer has emerged, word is that Hearst may be planning to extend the P-I's existence by making it an online-only entity. A number of P-I's staffers have been offered to stay on to work for the web site.

One reporter who turned down the offer said it came with some strings attached - it would increase his health insurance cost, cut his salary by an unspecified amount, match his 401(k) contributions, require him to forgo his P-I severance pay, reduce his vacation accrual to zero and require him to give up overtime. But Hector Castro said the reason he rejected the deal is because he finds working online "too tech-oriented."

Meanwhile, some of the newly unemployed Rocky Mountain News journalists have already found a way back on the web. Tracy Ringolsby, one of the most respected baseball writers who also co-founded Baseball America, has launched a baseball site along with fellow ex-Rocky baseball writer Jack Etkin and editor Steve Foster. It didn't take Colorado Rockies fans long to discover InsidetheRockies.com, which got around 2,100 hits the first day and climbing ever since.

The Sporting Journal

Fulfilling Rupert Murdoch's pledge to make the Wall Street Journal a more general-interest paper to compete with the likes of the New York Times, on Tuesday unveiled a sports page, to be featured now daily in the Journal.


Previously, the Journal's sports coverage was limited to John Paul Newport's golf column in the weekend edition and a few sports stories in the Friday and weekend papers. Sports Editor Sam Walker said the new daily sports page won't be a place to find box scores. "We're not doing game coverage," he said. "These are stories that are idea-based with big themes."

The Journal's first sports center-piece story? Of course it came with a financial theme. It's a feature on why fewer NBA teams are capable of contending for the title this season, and what the economy has to do with it.

Philly Moves Toward One-Paper Town

Scarcely a week after filing for bankruptcy, the Philadelphia newspapers are finding temporary measures to stop the bleeding. On Monday, the newspapers announced that the smaller tabloid Daily News will become "an edition" of the broadsheet Inquirer, effective March 30.

Philadelphia Media Holdings LLC, the parent company of both papers, insists that the move is made to boost the circulation numbers of a soon-to-be single entity and to help increase advertising revenue. Currently, the Inquirer has a circulation of 300,000 and the Daily News 97,000. The Sunday Inquirer has a circulation of 556,000, making it the eighth-largest Sunday paper in the U.S.

While the parent company and the editors of both papers maintain that the papers will keep separate staffs and "compete" with each other for stories, it's all but certain that the Daily News will become merely a section of the Inquirer and eventually disappear altogether. There is no economic sense in publishing two papers, with different formats even, when the smaller of the two isn't worth the trouble. The Daily News' circulation is less than that of the papers in Allentown, Pa., or Rockland County, N.Y.

Meanwhile, papers from coast to coast are slashing and cutting. The family-owned Columbus Dispatch announced that it's trimming 45 newsroom jobs. And the Sacramento Bee, owned by financially-distressed McClatchy, is trying to get the union to accept a large-scale pay cut, with those making $50,000 or more losing 6% of their salaries, a significant concession given the increased taxation facing all Californians.

In a memo circulated to members, the guild pleaded for a yes vote in order to save jobs:

The committee tried its hardest to win some concessions in exchange for accepting a difficult package of wage cuts and layoffs. But over and over, the company said it was an all-or-nothing deal necessary to achieve the company's financial goals in the eye of a severe economic downturn.

Opinions varied within the bargaining committee regarding a choice that was unpleasant in every sense of the word. We have all heard of the layoffs elsewhere, and even steeper wage cuts being asked of other newspapers, including 11.7 percent at the Denver Post and 15 percent at the Seattle Times. Every day brings new reports of newspaper bankruptcies and closings, as was the case at The Rocky Mountain News on Friday.

There's no way to sugar coat it. This was crisis bargaining, nothing more. Now members must consider the options and vote. We have been told that a no vote will trigger high number of layoffs among us.

Read the reaction to this memo, though, and you'd be amazed at how some people just don't get it.

Hearst Makes Demands on Chronicle

As predicted here at Media Watch, after warning that the San Francisco Chronicle might fold, the parent Hearst Corporation made demands on the newspaper guild and other unions for drastic concessions to keep the paper operating. Management and labor likely will have the next 2-3 weeks to work out the givebacks or the paper could be shuttered by the end of the first quarter.

Media Watch has obtained the memo sent to guild members on the highlights of the proposal. There were a few mundane items - such as increasing the work week from 37.5 hours to 40 hours without an increase in pay, trimming four weeks of vacation to three, and loosening existing constraints on management to use freelancers. And there were a few more difficult ones, such as more layoffs and discontinuing pension contribution.

In all fairness, the demands were harsh, but not entirely unreasonable. Partly due to the high cost of living in the Bay Area, and partly due to the fact that San Francisco was one of the strongest union towns, the employees at the San Francisco newspapers have always enjoyed some of the best benefit packages of newspapers anywhere in the United States. While California's escalating taxation is taking its toll on all residents, it's not particularly a burden that Hearst should be forced to carry as its employees are giving away more and more of their salaries to satiate a near-bankrupt state's penchant for spending.

It appears that the guild, after putting up light resistance, would be willing to accept most of management's demands - given the choice of losing their jobs outright vs. losing a few perks, vacation and sick days and freeze in pay. At least Hearst is not asking for direct pay cuts and unpaid furloughs, as a number of newspaper chains have done.

But the ball might be out of the guild's hands. Its other more notorious union brethren representing the composing room, pressmen and truck drivers may be less willing to give in. And this time, if they decide to call management's bluff, they may be making a grave mistake.

Meanwhile, Hearst is exploring other ways to improve its revenue stream as it's losing about $1 million per week at the Chronicle and a bit less at its other 15 papers. The company is contemplating a pay scheme for certain articles on its properties' web sites, including the Chronicle's popular sfgate.com site.

According to the Wall Street Journal, Hearst president Steven Swartz said his company is developing a new digital strategy that may also include a Kindle-like reading device:

Reworking its digital strategy is a part of Hearst's "100 Days" plan to cast a critical eye on longstanding newspaper-industry business practices. Mr. Swartz promised profound changes. "One inescapable conclusion of our study is that our cost base is significantly out of line with the revenue available in our business today," Mr. Swartz said. "It is equally inescapable that during good times our industry developed business practices that were at best inefficient."