Old media + big banks = stupidity squared

Looks like old Dean-o Singleton won't have much ownership anymore in Media News, though Bank of America is going to still let him run the company. (Thereby showing that the stupidity of big banks and that of big Old Media folks is probably about equal in the past five years.)


From the AP:

By MICHAEL LIEDTKE
AP Business Writer

SAN FRANCISCO (AP) — Another newspaper publisher desperate to dump debt has filed for bankruptcy protection in hopes of recovering from an advertising meltdown that has obliterated much of the print media’s revenue.

Friday’s late filing by Affiliated Media Inc., the holding company of MediaNews Group, had been expected. The owner of 54 U.S. daily newspapers said Jan. 15 that it would seek to reorganize its finances in bankruptcy court.

MediaNews, based in Denver, says its newspapers, which include The Denver Post and the San Jose Mercury News, and 8,700 employees won’t be affected during the bankruptcy proceedings. The company also owns four radio stations in Texas and a television station in Alaska.

Privately held Affiliated Media worked with its major lenders and shareholders during the past year to hammer out a plan aimed at shortening the company’s stay in federal bankruptcy court in Delaware. Affiliated hopes to emerge from bankruptcy protection within two months.

The plan calls for Affiliated’s debt to fall to $179 million from $930 million, according documents filed late Friday and early Saturday.

In exchange for this $751 million concession, a group of lenders led by Bank of America will become the company’s majority owners with 89 percent of the common stock, according to a disclosure statement filed Saturday. The remaining 11 percent goes to MediaNews’ management team, which is led by William Dean Singleton, who is also chairman of The Associated Press. The MediaNews executives will receive warrants that eventually could boost their combined stakes to 20 percent.

Heading into the bankruptcy filing, Singleton held a roughly 30 percent stake in Affiliated.

Richard Scudder, who co-founded MediaNews with Singleton in 1985, will relinquish his interests in the company to the lenders. Another major newspaper publisher, Hearst Corp., also will surrender a 30 percent stake it acquired in Affiliated’s newspapers outside the San Francisco Bay area as part of a complex $317 million deal in 2006.

Singleton will continue to run MediaNews, signaling the lenders remain confident in him despite the company’s recent struggles.

The decision probably stems from Singleton’s reputation as a hard-nosed businessman who has never shied away from cutting costs, said Alan Mutter, a former newspaper editor who blogs on the media business.

"Who do we know who can go in and run the hell out of a newspaper and make a buck?" he said. "The only answer is William Dean Singleton."

MediaNews spokesman Seth Faison declined to comment late Friday.

"By aggressively facing the challenges of the newspaper business, we will continue to deliver high-quality journalism and will prepare our newspapers for a promising future," Singleton said in a statement Friday.

Affiliated’s annual revenue has fallen by $270 million, or 20 percent, during the past two fiscal years, according to court documents.

To cushion the financial blow, Singleton has reduced Affiliated’s expenses by $385 million, or 31 percent, since the end of 2006, according to court documents.

Affiliated still lost $582 million as revenue fell 10 percent to $1.06 billion in its last fiscal year ending June 30, the documents show. That came on top of a $406 million loss in the previous fiscal year. The losses stemmed from accounting charges taken to reflect the crumbling value of its newspapers.

Despite Affiliated’s troubles, Singleton says all but one of the company’s newspapers are profitable. He hasn’t identified which one is losing money.

But Singleton couldn’t figure out a way to cope with all the debt that MediaNews took on to expand into new markets. Like other publishers, Singleton borrowed heavily before the Internet and recent recession began to devour the newspaper’s main source of income — advertising.

Affiliated is bracing for more tight times ahead. In a disclosure statement, the company discusses possible savings from farming out some production, newsroom and administrative jobs and imposing permanent wage cuts at some newspapers beginning this year.

The reorganization plan calls for Singleton to receive a $634,000 salary and an annual bonus of up to $500,000 as Affiliated’s chief executive. He will also continue to be paid $360,000 annually under a separate agreement with The Denver Post Corp., according to court documents.

MediaNews - The latest old media woes

MediaNews, one of the nation's largest newspaper companies, is also the latest to file Chapter 11. As I e-mailed a friend, Dean Singleton may have done a great job of building up MediaNews, but as chairman of AP, he was pretty clueless about how to monetize online newspapers, and related matters.

Paywalling, for example, is one matter.

Point No. 1, even before Deano became AP's chair? When newspapers said look at the "TV model for online papers, did they forget there was such a thing as cable TV? Let alone premium cable?

Point No. 2, on specific, why didn't AP jack rates for Yahoo, Google, MSN, et al high enough to potentially force them to paywall content, therefore giving member newspapers protection to paywall?

Point No. 3 - As both owner of a major newspaper company and AP chairman, why didn't he recognize that, on this issue, AP and its member newspapers are somewhat at cross interests?

Issue No. 2 is general business management.

Point No. 1? If you're not going to paywall locally generated content as well as AP written news, why do you post it online even before your print newspapers come out? (This is not specific to Singleton, BTW.) If online newspapers aren't "monetized" yet, this is a handout. It's like if Campbell's started selling its soup in plastic bottles as well as cans, and said that because the plastic bottles were made more quickly, it would give them away for free.

Anyway, that's a few thoughts for now.

Vail Resorts' snow job gets reporter fired

Bob Berwyn was, until recently, a reporter for Colorado-based Summit Daily News. Seeing a former colleague, now working for Vail Resorts, by far the biggest ski company in Colorado, doing an interview with The Weather Channel, he suspected a snow job on snowfall on the Western Slope vs. the east side of the Rockies.

And did a column about it.

Despite the fact there's now a ski report iPhone app to keep folks like Vail Resorts in line and honest, Vail Resorts yanked all its ads from the paper. Summit Daily News' managing editor insisted Berwyn needed to grovel and when he wouldn't, he fired him.

Smaller newspapers have self-inflicted wounds, too

I got offered a job, then had it pulled back away, all in just six hours, yesterday.

I had a phone interview to be named the editor, and general manager in training, at a weekly paper near Dallas. Ideal!

Was tentatively offered the job over the phone, then the publisher said he'd like to meet in person just to give himself final assurance.

No problem, I said. I'll drive to Dallas this weekend.

Well, less than five hours later, I get this message in an e-mail:

The powers that be with the chain have decided to move things in a different direction.

Oh, and that was after being told on the phone five hours earlier that "the powers that be" had been pushing to get this position filled.

It's the second time in 10 months I've had an "interesting" interview situation with this newspaper chain. The first time, the company's flagship daily, on the west side of Houston (you TPA members, figure out who, I don't have the Heart to tell you) offered me a job -- a job somewhat inchoately defined as far as duties, and very inchoate as far as other things.

Like how much they were going to pay me. Whether it would be on salary or wage.

So, exactly what happened yesterday? Who knows. I do know, though, that I'd look long and hard at any other jobs this company advertises.

Nor is that the first time, or the first newspaper company, that hasn't been 100 percent up-front, or organized, or both, or whatever, about a situation.

That said, I don't know whether the track record is better or worse than other small businesses, small businesses as far as the individual outlets/franchises, at least. Maybe they're better, maybe they're worse, maybe about the same.

Jay Rosen's New Media '10 Cmdts' ain't necessarily true

Starting wit his claim media atomization has been overcome. It hasn't, because of the price level of new media. To the degree it consolidates, then it will professionalize, with some of the issues of "old media."

For instance, more than three years ago, in Dallas, a group of people started a site called Pegasus News. It serves as an aggregator of bloggers (and maybe Twitterers, soon enough) on local arts, entertainment, politics, etc, while mixing in rewrites and expansions of press releases and the occasional actual story.

So, my default, if you're one the cool/lucky bloggers to have been picked up, especially early in Pegasus' history, and especially if it was without being noticed by the Dallas Morning News, you've got an inside edge.

So, in that sense, atomization may be lessened. But, Pegasis doesn't run all of the blog posts it gets from bloggers it "favorites." So, it's now ... wait for it ... a filter.

Some of the commandments are "fat chance," like this from Rosen's second commandment:

Closed systems [i.e. old media] bring editorial oversight and the authority of a respected brand while open ones crowdsource information and are easy to use. What both systems should have is trust and ethics.

But, if Rosen would have read Tech Crunch's pieceon an infamous Fort Hood-posted Army blogger, which I blogged about here, he'd be more circumspect about the likelihood of that happening soon.

Another of his commandments he just throws out without saying what will happen to it:

"Half my advertising is wasted, I just don't know which half."
Unlike the first six recent quotes, this one is almost a century old. Rosen attributes it to Philadelphia businessman John Wanamaker/

But, Rosen doesn't wonder what will happen ot the good half vs. wasted half of advertising if he's wrong, and the new media does remain atomized to some degree.

Others of the commandments aren't "wrong," they just fall into "what does this mean?" If people need better filters, since "old media" now isn't a "filtering force," or whatever, will they just give up instead? Give up filtering, or eventually tune out?

Rosen, along with Jeff Jarvis and some others (I don't think Clay Shirky is that bad) need to take to heart a previous post of mine, that "Internet triumphalism is not a public good.

It's kind of frustrating for people like this to be triumphal to the point of making overstated new media guru claims. Be more modest, realistic and fact-based about what's actually happening, or you start repeating the mistakes, and the hubris, of the old media on which you shovel dirt.

'Old media' vs. 'new media' and media vs. messages

"Old media" vs. "new media"? The difference is ultimately in the medium more than the message quality. Yes, blogs have broken news stories before the "MSM" and Twitter has added color to stories, but Twitter has releasd just as much inaccurate info as the MSM outlets at breaking news events, adn blogs can look like news but be as slanted as bad MSM coverage.

Give me paywalls - from the top down

It's nice that some seven-day dailies, which have a fair amount of local news content, are going to paywalls, but really, that's not enough to solve the national issue.

The real problem, though, is lack of leadership by the AP, not individual newspapers. AP ought to put mandatory paywalls, with anti-Reuters/AFP exclusivity, into another revision of new AP contract. Then, it ought to abut quintuple its rates for Google et al, (with similar exclusivity clauses), high enough that Google would have to paywall, too, and couldn't do this on ads alone.