McClatchy will make $200mln from digital this year
McClatchy Chief Executive Gary Pruitt shared some details of the newspaper publisher’s operations in his speech on Tuesday at the Newspaper Association of America’s annual meeting. Here’s what he said, based on a transcript posted at the NAA’s website:
At McClatchy, 15% of our advertising revenue today comes from online. McClatchy, a company founded before the advent of electric lights, will generate nearly $200 million dollars in digital revenue this year at a higher profit margin than our print business.
What significance is this?
- Fifteen percent is above the average newspaper publisher’s take from digital
- $200 million would be almost enough to run The New York Times’s newsroom operations for a year. Not bad.
Higher profit margins than print? We know Gary is a big fan of pop music to highlight his industry presentations, and that he likes the Rolling Stones in particular. Maybe “Time Is on My Side” would be a decent choice for those kinds of numbers.
Actually, Gary *did* think of some Stones songs that would characterize the current state of newspapers: “(I Can’t Get No) Satisfaction,” “Gimme Shelter,” “Shattered” and “19th Nervous Breakdown” made the list. In the end he scrapped Mick and Keith and went with the Battle Hymn of the Republic.
Sound familiar? McClatchy cutting jobs
These have been a couple of ugly weeks for the newspaper industry. First, EW Scripps pulled the plug on the Rocky Mountain News, and then, today, McClatchy said it was cutting about 1,600 jobs, representing 15 percent of its workforce.
For those who like to look at the bright side of things, McClatchy isn’t shutting down The Miami Herald, Sacramento Bee or Anchorage Daily News. But the staff cuts are deep and undoubtedly will hurt the quality and depth of coverage at some of those newspapers. How couldn’t they? After all, they come on top of two other major rounds of layoffs at McClatchy.
The move isn’t really a surprise, given that McClatchy said back in early February that it had to come up with a plan to cuts more costs given the deterioration of the industry. Still, it seems job cuts at the company come as frequently as seasons change.
Here’s what CEO Gary Pruitt had to say in today’s statement: “We have been transitioning steadily from a traditional newspaper company to a hybrid print and online, news and advertising company for some time. The effects of the current national economic downturn make it essential that we move even faster to realign our workforce and make our operations more efficient. We previously discussed a plan to reach a targeted level of cost savings, but given the worsening economy, we must do more. I’m sorry we have to take these actions, but we believe they are necessary.”
If that sounds familiar, it should. On two previous occasions in recent months Pruitt has used similar language to announce job cuts. Here’s a refresher.
– September. McClatchy announces it is cutting 1,150 positions. Pruitt: “It is painful to announce these staff reductions, but the continued restructuring of our company is necessary given the relentless economic downturn and its impact on our business.”
The Executives from McClatchy don’t know what they are doing. When the McClatchy family ceased running the company, the “new executives” have cut back all of the incentives that “Ms. Eleanor McClatchy” had set up for her employees. She treated her employees as if they were family, they were paid the best in the business, the employees were happy working for this company. Not any more. The “New Executives” have terminated almost all of the veteran employees, replacing them with employees who have no experience and will work for minumum wage. The employees who are still there are there just to complete their time and to get their retirement. Even that is uncertain, now that the McClatchy company has frozen their Pension Plan. Almost everything in the future is uncertain as far as veteran employees are concerned, the only thing that is certain is that the “New Executives” will continue to get their
bonuses regardless of what the economy is going through, of how much debt the company has. If it were not for the CEO, Gary Pruitt’s biggest mistake, buying the KNIGHT RIDDER PACKAGE, THE COMPANY would still be in good standing and making alot of money. Because Pruitt is so greedy and so hungry for attention he wants for the public to think that he knows what he is doing, NOT
TRUE, he was there when the company was doing good, and he just happened to be there, it has nothing to do with him. Most McClatchy employees would love it if he were fired today, and never heard from again. I know for a fact, that I would. He should be fired for making the worst Business Decision in all of McClatchy’s history, buying the KNIGHT RIDDER was the biggest mistake of the entire McClatchy History. Now, there is a big probability that the company will go under sooner than
the public knows.
McClatchy: three new publishers in two days
McClatchy Co, fresh off amending the terms on paying back its debt, is busy making some changes at its newspapers. The owner of the Miami Herald and Sacramento Bee has replaced three publishers in the past two days. We don’t yet know if this is coincidence or part of a coordinated move.
Here’s where we are so far:
The Tribune in San Luis Obispo, California: Bruce Ray takes over from Chip Visci, who is retiring, according to a press release. Ray previously was chief financial officer at the paper. Visci, according to McClatchy Chief Executive Gary Pruitt, is starting “the next chapter of his life.” Visci’s previous chapter was as a Knight Ridder guy before McClatchy ate up the chain and incurred all those billions of dollars in debt.
(Visci just called back and left a message, which is worth reporting for its humorous candor: “I can assure you that there’s no such shuffle underway… If there really were something up, I probably wouldn’t have called you back.”)
The Bradenton Herald in Florida: Robert Turner Jr succeeds William Fleet, who will become president and publisher of McClatchy’s Fresno Bee in California. Turner is a 29-year veteran of the Herald, according to another press release. Fleet was in California and unavailable. Turner was in a meeting, so we left a message.
The Fresno Bee: Fleet replaces Ray Steele Jr, who is retiring. No word about the next chapter in his life. He has worked for McClatchy for 41 years.
So what’s the news, McClatchyites? Write to robert dot macmillan at reuters dot com and let us know. We won’t rat you out.
It is boom time as far as media is concerned. Now, there is no scarcity os news feed. It is a feast for media in the time of crisis.
Rolling stones with McClatchy’s Pruitt
McClatchy Chief Executive Gary Pruitt is one of those newspaper executives a reporter can get along well with because of qualities that are not always common to your typical CEO:
- He leaves the jargon behind at interviews.
- He is honest about bad news, making it easier to believe him when he delivers good news.
- He believes in the product — good journalism — as fervently as he does in his duty to please shareholders (which in McClatchy’s case includes the company’s namesake family and a bunch of other unhappy people).
Trouble is, there isn’t much good news to tell about the newspaper business. Pruitt has said as much to us and others, but in his latest interview in the Sacramento News & Review, (which we found on Romenesko) he shows us how much he feels his employees’ pain:
This has been the worst year of my life, by far.
That’s a pretty grim assessment. Then again, he’s presided over a 90 percent drop in McClatchy’s stock price, he’s cutting staff by 10 percent, and there appear to be few options open to the company to change the way it’s set up. The primary obstacle is $2 billion in debt from its acquisition of newspaper publisher Knight Ridder just before the key advertising struts supporting the company snapped.
Here’s more from Pruitt, on the economy:
One of the things that I wanted to emphasize is, obviously, we’re impacted by the economic downturn… It’s difficult to tease out how much of this is cyclical, and therefore temporary, and how much is secular and permanent. People have a tendency to conflate the two and assume, “Oh my god, it’s the end of the world as we know it-so why do you feel fine?”
McClatchy CEO knows what we all want
You can say one thing for Gary Pruitt , McClatchy’s CEO and perhaps the most ardent defender of the newspaper business — he knows what we all want.
Here’s his comment from the analyst call he did today to discuss McClatchy’s first-quarter earnings :
We want to make sure we maintain our ability to generate revenue.
Who could ask for anything more?
Pruitt also showed off his lighter side in an exchange with Goldman Sachs’s Peter Appert. When the analyst said he was going to ask an unfair question, Pruitt responded, “That’s because I’m going to give you an unfair answer.”
Cue laughter, then cue crying because Appert’s question is at the heart of what most newspaper people want to know: Isn’t there a point where you can’t cut your way to profitability anymore?
Pruitt’s answer:
Ted is absolutely correct. Why are Pruitt and others at the helm in this industry continuing to take massive pay in the face of job losses and other cuts. Come on, Gary. Take one for the team! Can’t you get by on say – oh, I don’t know – $100,000 a year until you figure this thing out? Aren’t you embarrassed when you cash that check every week while you’re slashing jobs?
If that gives them enough time to fix the ad sales process to be able to economically sell local ads to local business in versioned newspapers, I’m seeing a light at the end of the tunnel for McClatchy.