Monday, November 17, 2008

Newspapers Jettisoning Top Talent to Cut Costs

By DAVID CARR, The Media Equation

In March 2007, Circuit City came up with a plan to confront softening sales and competition from online and offline retailers: fire the most talented, experienced employees.

Of course, those workers were the retail chain’s single most important point of difference from the legion of Internet retailers and general merchandisers, but in a single stroke, Philip J. Schoonover, the chief executive of Circuit City, wiped out that future.

As a pal of mine used to say when I described a particularly boneheaded course of action I had pursued, “How’d that work out for you, buddy?”

For Circuit City, not so great. The “wage management initiative” erased morale, both for employees and the folks who shopped there. Sales sank after the one-time gain from the layoffs. And last week, the company sought bankruptcy protection.

Mr. Schoonover joined his former employees in the discard box in September, a nice bit of symmetry until you factor in his $1.8 million in severance, $50,000 in outplacement services and a two-year cushion on health benefits. (The clerks axed in Wichita and Tucson got a bit less.)

In the digital age, we’re told, the critical difference between success and failure is human capital — those heartbeats and fast hands that can make a good business great. So are newspapers reacting to their downturn as Circuit City did?

Every day, Romenesko, a journalism blog at the Poynter Institute, is rife with news of layoffs at newspapers, most of the time featuring some important, trusted names. It is not the young fresh faces that are getting whacked — they come cheap — but the most experienced, proven people in the room, the equivalent of the sales clerk who could walk you through a thicket of widescreen television choices to the one that actually works for you.

Using clerks as an analogue may not be the most flattering comparison, but I have always thought of journalism as more craft than profession and tell students that it is the accumulation of experience and technique that makes a journalist valuable, not some ineffable beckoning of the muse.

Right now, the consumer has all manner of text to choose from on platforms that range from a cellphone to broadsheet. The critical point of difference journalism offers is that it can reduce the signal-to-noise ratio and provide trusted, branded information. That will be a business into the future, perhaps less paper-bound and smaller, but a very real business.

Newspapers, which began the race with a huge lead in terms of human assets, may end up just another part of the underinformed commodity of clutter.

“Circulation declines were deeper in the last period, and I have to say that I think it has to do with the quality problems from cuts,” said Ken Doctor, a media analyst at Outsell Inc., a market analysis firm. “It is not just the cutting, but the cutting of more-experienced staff, a kind of slow-motion suicide. Circuit City cut its own throat by not realizing what their competitive advantage is, and newspapers are doing the same thing.”

Last week, Media General, a company that owns newspapers, television stations and Web sites in the Southeast, eliminated 80 positions in Florida, including a prominent columnist and the editorial page editor at The Tampa Tribune. “The Book of Ruth,” a long-running wiseacre feature by the longtime columnist Dan Ruth, will be missed, now and then. He and the editorial page editor, Rosemary Goudreau, follow a political columnist, Joe Brown, the movie critic Bob Ross and the classical music critic Kurt Loft to the exit.

Readers, especially the ones cranky and serious enough to still be buying newspapers, have not missed the trend.

“Fire your best employees and watch your business go out of business, just like Circuit City is finding out right now. Who wants to read old news when one can find quality articles outside of the TampaTribe. Bye Bye TampaTrib, you have fired one too many of your excellent personnel and now I am firing you!” said a reader, Bob, in a comment posted to The Feed blog at, a media blog by Eric Deggans, a media and television reporter at The St. Petersburg Times.

Yes, the revenue picture is grim and growing grimmer. The biggest outlay besides putting the printed artifact on the street is salaries. And journalists tend to get a lot more indignant when the sheet cake and goodbye speeches are being served up on behalf of people who have the same job as they have.

But there is a business argument to be made here. Having missed the implications of the Web and allowed both their content and their audience to be scraped away by aggregators and ad networks, newspapers are now working furiously to maintain audience, build new ad models and renovate presentation. But they won’t stay relevant to readers with generic content ginned up by newbies with no background in the communities they serve.

“Newspapers are aimed at the movers and shakers in a community — the car dealers, the retailers, the restaurant owners,” said Alan D. Mutter, a technology and media consultant who blogs at Reflections of a Newsosaur(

“When they get together and realize that they are looking at the paper, that it is less compelling than it used to be, it creates a vicious cycle of weaker readership and weaker advertising.”

Last week, Sam Zell, a one-man newspaper wrecking crew running the Tribune Company, was interviewed at the FourSquare conference, the annual conclave of media moguls put on by Steve Rattner. I was not there, but I spoke to two people — neither of them journalists — who listened and were appalled by his disregard for his newspapers, including The Chicago Tribune and The Los Angeles Times.

Based on my conversation with those attendees, Mr. Zell, who, through a spokesman, declined to comment, suggested that newsrooms were just so much overhead and that what was ailing the industry was overweening journalistic ambition. I’ve read Mr. Zell’s products since he took over. I’ve seen his handiwork, including laying off Lynell George at The Los Angeles Times and Jeffrey Meitrodt at The Chicago Tribune, just two of the many veterans I happen to know he has sacrificed on the altar of debt service.

Newspapers confront tall, menacing seas in the coming year, but it is a sure bet that the ones that dump the ablest hands on deck will be among the first to sink below the waves.


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