Saving newspapers: The PR campaign

January 31, 2009

Brian Tierney doesn’t dispute that U.S. newspapers are in trouble; he just wants to know why they can’t tell the good side of the story. That led to this article in today’s Philadelphia Inquirer, the paper he owns along with a group of investors:

The pundits and cynics who believe that newspapers are dead are dead wrong.

So says a small group of newspaper executives who this month organized an ad hoc group to alter perceptions and get the facts out…  Dubbed the Newspaper Project, the grassroots effort includes the CEO and publisher of Philadelphia Media Holdings, Brian P. Tierney. [And executives from Parade, Community Newspaper Holdings Inc and others --ed]

Acknowledging that the newspaper industry faces challenges, the group roundly rejects the notion that newspapers have no future.

The group decided “because journalism is so essential for a democracy, we really need to tell this story ourselves in a more aggressive way,” Tierney said.

Starting on Monday, the Newspaper Project will launch an ad campaign in the Inquirer, The Washington Post, The New York Times, AdAge and other papers to spread the word. It’s a good fit for Tierney, who knows a thing or two about public relations. Of course, it’s also something that the Newspaper Association of America has spent millions on over the past few years, and that has yet to turn the tide of public opinion.

As the Reuters reporter who covers newspapers, I was nonplussed to only find out about this on the Saturday before the campaign launched, and said so on a comment on the Inky’s article. An hour or two later, I got a call from Tierney. That led to a chat about three fundamental facts about the state of newspapers today:

  • Yes, they’re more read than ever, thanks to the Internet
  • Ad budgets are falling in print, and online ad sales are too cheap to make up the difference
  • A publisher might be profitable, but not enough to pay off debt, which raises the possibility of default, bankruptcy and extinction.

We covered the basics of the campaign and he touted how well the Daily News and Inquirer are doing in terms of Web audiences. But what about bringing in more money? Perhaps charging for the paper online (see Silicon Alley Insider for the latest free-vs-paid chapter) is inevitable, he said.

And how are he and his investors dealing with the papers’ debt, now at $400 million?

“We put 30 percent equity into our deal, which at the time seemed sufficient. Last year we did almost $40 million EBITDA [earnings before interest, taxes, depreciation and amortization], but our debt service is $40 million also, so we’re in kind of a covenant default. So the equity takes a haircut… and some of that debt needs to be significantly restructured… But the debt story does get in the way of the audience story.”

Tierney hopes to get the debt restructuring sorted out with lenders within a few months. As for injecting more cash into the two papers? “Our investor group is willing to put in more equity under the right terms,” he said. “No one in our investor group thought this was going to be a Google return.”

And advertising? It’s chiefly because of the decline in ad revenue that papers are struggling. At the Inquirer and Daily News, ad revenue performance was down about 17 percent over the past year. Factoring in circulation revenue gains from raising the papers’ price, overall  revenue was off 10 percent in 2008. Ad revenue likely will fall the same amount this year, he said.

There’s no cause to celebrate a second year of 17-percent ad declines. On the other hand, it’s the kind of consistency that suggests that a bottom could be near. And a bottom usually is what precedes some kind of recovery. That sort of trend is its own public relations campaign.

(Photo: Reuters)

7 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

I’m an ex-newspaper advertising exec who has been in the agency business for 20+ years. No,the revenue from one newspaper website can’t replace the revenue from the traditional newspaper. Not yet. But where is the innovation? Where are the multiple websites that can increase reader interest and broaden the revenue base? Why isn’t the industry bringing in people from outside the industry who understand today’s media? Yes, the economic climate hastened the decline, but it was going to happen sooner than later and the industry was, and is, in denial. I applaud the effort, but innovation is essential.

Posted by Pete Marco | Report as abusive

Great blog. Loved this story so much I posted a link on my blog (with your byline of course).

Pete is on the money. The customer base of newspapers is dying off by the day. The younger generation doesn’t see the value of print media and newspapers haven’t tried to accommodate them. An excellent model is Investor’s Business Daily. I spend a pretty penny for the paper and the online resources because both have individual value. Although local newsprint is different from investment publications, I think the eventual solution is value in both print and online, with a shared revenue structure. what other solutions are out there? Otherwise I think we need to bail-out the papers and privatize them:)
Brian Marchant-Calsyn

[...] However, there are some fatal flaws in this argument.  Combining print and on-line readership undoubtedly shows an increase, but this does nothing to counter the most common argument that it is print which is suffering at the expense of its online rival.  Moreover, whilst advertisers are still continuing to invest there is no denying the fact that there has been a steep drop in advertising revenue this year, as Reuters’ Robert Macmillan points out. [...]

It’s really about the Internet. And our laziness (or craving for speed, speed, speed). And change: I’m a PR agency owner; we subscribe to 5 dailies. They arrive at our doorstep every morning. But what do I do? I get my news at 6 a.m. when I log and view Yahoo headlines or the NY Times edition via email or by a quick check in on Twitter. By the time I get to the office, I’m somewhat apprised. That said, there is NOTHING like caressing a section. Folding it the way I want it. Saving it. Savoring it. Tonight I shall do the crossword. Speaking of Twitter, follow @TheMediaIsDying. It ain’t just those folks in Philly.

It really is all about the crossword, isn’t it.

Posted by Robert MacMillan | Report as abusive

I don’t think the issue is young people not appreciating print media. I think the issue is that people in general are losing faith in the concept of journalism. They don’t think journalists strive to be objective in their reporting. So they gravitate to the “news” sources that tell them what they want to hear.

Posted by Gina Cuclis | Report as abusive

Hi,
I am Anitha, I am a professional blogger and an advertiser. yes, these days more youngsters are attracted to technologies like Internet. I promote products and themes on active internet blogs. Eventhough currently I do not have any data to support the effectiveness. Blogs certainly give results and is picking up as an emerging area. I can be contacted through my email:anitha.vijaypura@gmail.com.

I work from my home in India as freelancer and lot of FMCG companies are benefitted by promoting Theme based blogging on internet sites.

Posted by Anitha | Report as abusive