Newspapers: They’re *still* dying

Moody’s debt analyst John Puchalla analyzed the state of newspapers today. Conclusion: The sun rises in the east, usually in the mornings. In other words, newspapers are still doomed.

Despite the report’s obvious conclusion, it’s worth reading for Puchalla’s analysis of the cost structure that newspapers deal with. Here’s an excerpt from the press release announcing the report:

Currently, a structural disconnect exists in the newspaper industry’s cost structure. Just 14% of cash operating costs, on average, are devoted to content creation — the primary value creation activity — while about 70% of costs support the print distribution model and corporate functions. The remaining 16% of cash operating costs relate to advertising sales — another critical task that drives the majority of newspapers’ revenue. The overall imbalance limits the industry’s flexibility to overcome competitive threats. …

Most newspaper companies have moved only slowly away from in-house print production and distribution, said Moody’s. Thus, high operating leverage for the industry remains, and is creating intense pressure on cash flow as revenue declines.

“Ultimately, we expect the industry will need to reverse the vertical integration strategy through cross-industry collaboration and outsourcing print production and distribution processes,” said Puchalla. “Although newspapers may lose some of their in-house control over press time, they would also release resources to beef up investment in content and technology.”

News Corp shareholder fails to make the cut

Today’s important lesson for shareholders: If you want to try to change the way things work at News Corp, you’d better make sure your paperwork is in order.

News Corp publicized in a government filing on Thursday an effort by investor Kenneth Steiner to force the media conglomerate to change the way it counts shareholder votes. Steiner outlined the proposal in a letter to News Corp that asked that his proposal be included. Here is what he said:

RESOLVED, Shareholders request that our board take the steps necessary so that each shareholder voting requirement in our charter and bylaws that calls for a greater than simple majority vote be changed to a majority of the votes cast for and against related proposals in compliance with applicable laws. This includes each 65% shareholder voting provision in our charter and/or bylaws.

McClatchy: What happens to a delisting deferred?

McClatchy Co is one newspaper publisher that knows how to set up a good cliffhanger.

The owner of the Miami Herald and Sacramento Bee said in a press release on Tuesday that it once again meets the New York Stock Exchange’s listing standards.

In other words, it gets to keep playing on the big board.

McClatchy was in danger of having its stock delisted because it failed to meet the minimum requirements that the NYSE has for a company’s stock price.

Philadelphia papers will charge for Web news

Elton John and Bernie Taupin might have to consider rewriting “Philadelphia Freedom.”Brian Tierney, chief executive of the company that owns The Philadelphia Inquirer and Daily News, plans to begin charging for news online by the end of the year, he said in an interview with a local Fox TV affiliate.

“I think by the end of this year we’ll starting doing what a lot of other newspapers are looking at doing and charging something for it,” Tierney said. “We can’t spend $53 million on newsroom costs and give it away on the back door in terms of things. There will be a small charge for that.”

When asked by Fox 29′s Steve Keeley when such a charge would go into effect, Tierney said “by the end of the year.”

Tierney also said he plans to take on Google over possibly getting money for Philadelphia Media Holdings from its content that resides on the search engine’s site.

Newspapers plot survival as quietly as they can

Newspapers are in the business of making information public so readers can benefit. Newspaper publishers are in the business of revealing as little as possible unless someone springs a leak.

In the case of the two-dozen newspaper publishers who met in the Chicago area to discuss ways to get people to pay for the news they read online, the leak landed in the hands of The Atlantic. Here is an excerpt:

There’s no mention on its website but the Newspaper Association of America, the industry trade group, has assembled top executives of the New York Times, Gannett, E. W. Scripps, Advance Publications, McClatchy, Hearst Newspapers, MediaNews Group, the Associated Press, Philadelphia Media Holdings, Lee Enterprises and Freedom Communication Inc., among more than two dozen in all. A longtime industry chum, consultant Barbara Cohen, “will facilitate the meeting.” …

Murdoch says no to U.S. government newspaper bailout

News Corp Chief Executive and newspaper empire builder Rupert Murdoch showed up on the Fox Business Network (which he owns) on Thursday to talk about the future, or lack thereof, of newspapers.

Two key points: News Corp’s papers, which in the United States include The Wall Street Journal, the New York Post and the Ottaway chain of local dailies, will not take government money to help them stay afloat; and there is private financing for media companies out there. Here’s what Murdoch said on those topics, and more. (Thanks for FBN for this transcript)

On how newspapers will make money in the future
“Newspapers will make money the way we make it now – from our readers, from our advertisers. Newspapers may look very different. Instead of an analog product printed on paper, you may get it on a panel which will be mobile, which will receive the whole newspaper over the air, and be updated every hour or two. All of these things are possible and some of the greatest electronics companies in the world are working on this right now. I think it’s two or three years away before they get introduced in a big way and then it will probably take ten to fifteen years for the public to swing over.” …

Gannett watchdog will shut down his blog

Gannett watchdog Jim Hopkins has spent a lot of time and money running his blog dedicated to keeping a close eye on, and usually criticizing, the company. Not anymore. Come Oct. 1, Hopkins said on an entry on his blog on Tuesday, he will “stop active management.”Here are the relevant excerpts:

I had planned to post this on July 1, the start of the third quarter. In fairness to my more than 10,000 monthly readers, however, I’m moving up the publication date. …

My plan did not, however, anticipate the rate at which readers would post comments: I am now anticipating at least 50,000 over the next 12 months. For both news-gathering and ethical reasons, I am committed to reading them all.

That would be OK, except the tone of comments shifted in December — for entirely understandable reasons. Many of Gannett’s 41,500 employees came to understand what was taking place in the company. They are now fear-filled, desperate, angry — even suicidal, on occasion. Blogging can be very stressful, of course, Now, I’m finding it may be psychologically harmful, too.

Keep on rockin’ in the fee world, newspapers

It’s refreshing to read some reasoned thinking about the future of newspapers that does not come from

    Newspaper executives whose cheerleading about how they will survive — somehow — gets undercut by reporting a 30 percent drop in profits one quarter later, or Internet Cassandras who want newspapers to burn and die because they hate editors who get precious about how the calling of journalism trumps the rules of free markets and (more typically) because they hold dear the tradition of thinking that newspapers only print lies.

The Financial Times is the bearer of these encouraging if cautionary words in an editorial that it ran on Tuesday:

There are legitimate concerns about the disappearance of general papers. The best dig up stories and provide coverage of local, national and foreign news that enlightens readers and citizens. It is easy to undervalue such news when it has been plentiful for decades, but society would feel its absence.

Help a starving business reporter

They moved your markets. Now you can move their bank accounts.

The Society of American Business Editors and Writers, or SABEW, is hosting an event┬ánext week at Columbia University’s School of Journalism to help business journalists who have lost their jobs or found themselves in other tough straits because of the biggest story on every business reporter’s beat — the financial crisis. Here is the text of the invitation:

Former Wall Street Journal Managing Editor and ProPublica founder Paul Steiger, and New York Times Business Editor Larry Ingrassia invite you to join them at an event to benefit business journalism and the Society of American Business Editors and Writers (SABEW).

SABEW needs your support to help displaced business journalists and train business journalists for the digital age and new media landscape. Among SABEW’s programs are a revamped job listing site, a market for freelancers to find work, a mentor program for displaced journalists, teletraining on multimedia and business journalism topics, scholarships to attend conferences and training, and a revamp of our website to provide more robust services to members.

Dow Jones cuts back on benefits

The Wall Street Journal has been making plenty of hay about its rising circulation and the growing number of people online who are using the site, but parent company News Corp is cutting costs as the whole media business suffers from the recession. To that end, here is Dow Jones Chief Executive Les Hinton’s Monday memo on some benefits cutbacks that the company is instituting.

Dear colleagues:

Many companies are resetting their benefits in reaction to the economic challenges of the moment. Dow Jones has felt these same challenges and our business is far from immune to them. Unlike other media companies we have been able to avoid making changes driven by short-term necessity.

What we have done over the past year-and-a-half is to undertake a deep review of our entire benefits program. That review is complete, and today we are announcing a major change in our retirement programs. We are modernizing our approach to retirement savings and aligning our program with the market, News Corp. and our view of the future for Dow Jones.