…And we’re not talking about Tribune Chief Executive Sam Zell. We Mean Coleen Davison, private citizen, and resident of Chicago, Illinois.

The Wall Street Journal turned a letter from Davison, a former Chicago Tribune subscriber, into an advertisement — that it tried to run in the Trib. Trouble is, that paper declined to run the ad. Now, it’s running in the Chicago Sun-Times, the Trib’s rival.

Here’s some of her letter:

Our growing discontent with the Tribune’s diminishing quality became intolerable after their redesign last fall, and led us to explore other news options. We settled on the WSJ after perusing several different newspapers, even though neither my husband nor I are particularly involved in the financial world. … While the focus is obviously on the business sector, there is so much to be gleaned about our world from your reporting. Your journalists/contributors clearly know their subjects. Articles are presented articulately and coherently. Your coverage of world news and your human interest pieces are insightful, engaging and thought provoking. And I LOVE your editorial pages-just when I had begun to think common sense was a lost art, I’ve discovered the WSJ!

The ad then offers readers two free weeks of the Journal, along with a 75 percent discount.

A Chicago Tribune spokeswoman declined to comment on the ad. I asked Sun-Times spokeswoman Tammy Chase what she thought about the paper agreeing to run an ad knocking its competitor, but not even mentioning the Sun-Times as an option. She said it’s a business transaction, but in the spirit of good business, asked us to deliver this message to Ms. Davison:

As for her choice of newspaper, the Wall Street Journal is an excellent paper. Sure, we’d love to have her as a customer and if she wants to get local news from Chicago’s best daily newspaper, she can call the Chicago Sun-Times anytime at (888) 848-4637 and we’d be happy to get her a subscription set up.

You might think that the Tribune is getting beaten up here. But not to worry — its parent company gets paid by the Journal to print its Midwest edition. Tribune also publishes prints (you know what we meant)Barron’s, which WSJ parent Dow Jones & Co owns. So it seems like everybody wins in the Windy City.

EW Scripps Co’s decision to shut down Denver’s Rocky Mountain News as of Friday offers an interesting lesson about the value of news.

But first, a bit of background: It is not the first U.S. daily to fail as the economy falters. Scripps already put down two other papers in recent memory (Albuquerque, New Mexico and Cincinnati, Ohio, its home town). Having said that, it’s the biggest daily that I can think of to go under since the newspaper apocalypse crept in like Death in the Bosch painting. Not just bankrupt like Tribune’s papers, the Minneapolis Star Tribune or The Philadelphia Inquirer, Daily News and the whole Journal Register stable — and not just threatened with closing like Hearst has done with the San Francisco Chronicle and Seattle Post-Intelligencer. It’s really over.

When it goes, William Dean Singleton’s Denver-based MediaNews Group will still publish the Denver Post. Still, half the printed news that Colorado residents have been used to reading will be gone.

Now, a source of mine who was involved with trying to keep the Rocky Mountain News alive, pointed out that sacrificing the paper means that Scripps is less likely to have to shut down its entire business, which would mean other papers from Redding, California to Memphis, Tennessee to Florida’s Atlantic coast. It also reflects, he said, Scripps’s ultimate commitment: shareholders.

Shareholders don’t like seeing what’s happened to their newspaper stocks. Some have lost 98 percent of their value in the last 12 months, because advertising is going away and might not come back as strongly as it once did.

No one wants to lose money. But what kind of value is lost when the news disappears? If it were on a balance sheet, it would have to be listed as an intangible. Wall Street cannot account for it. The New York Times and others call it the value of their brand, but we’re still talking in murky terms.

There is value in news to the community that reads it, even if it’s online and they won’t pay for it. That value does not translate to shares, however, and certainly can’t be used as collateral or as a moral defense against banks that want the newspaper publishers who borrowed money from them to pay it back.

Hopefully someone will recognize the value that the staff at the Rocky Mountain News provided to its readers, and hopefully someone will find a way to pay them to do what they do all day long. Until then, we can only say adios to the people who tried their best to make it work. Happy trails, Rocky Mountain News.

PS: You can print out this little essay, switch up the names and cities, and apply it to the next city to lose its paper. Those days are here.

(Photo: Reuters)

Suburban bureau reporters at The Sun in Baltimore, Maryland, are about to learn the true meaning of the word “mobile.” The Tribune Co-owned paper is shutting down the last of its three suburban bureaus and bringing their reporters back to the main newsroom in Baltimore proper, sources told MediaFile on Tuesday.

The paper will outfit them with laptops and Blackberries and will send them back into the field to do their job by car or however else they can get to the story. It is part of wider changes going on at Tribune Co, which is in bankruptcy proceedings because of some $13 billion in debt that it has been unable to deal with because of the increasingly grim advertising sales plaguing newspapers.

Tribune’s chief executive, real estate magnate Sam Zell, was unhappy with the amount of empty space that The Sun has in downtown Baltimore, especially when considering all the space that the paper was renting in the suburbs, one of our sources says. The three bureaus that The Sun will shut down are in Anne Arundel, Baltimore and Howard counties. The Sun’s bureaus in Carroll and Harford counties already closed in the past year. It’s not clear if the two are related, but the three bureaus shutting down now are traditional turf war zones with The Washington Post, which recently said it will begin cooperating with The Sun on some coverage in the counties.

Shutting down bureaus must feel a little like a retreat. On the other hand, it must be nice to not be chained to a desk all day long, as we suspect more mobile journalists — or “MoJos” — are discovering..

The news was delivered in an off-record employee meeting, which also included the news that more buyouts and layoffs are on the way, likely sooner rather than later.

Speaking of personnel issues, Tribune Co Chief Administration Officer Gerald (Gerry) Spector had some bad news for employees: Salary freeze for non-union employees are coming this year. And if you’re in the union? Management will work it out in collective bargaining agreements. This is similar to what News Corp did at Dow Jones and The Wall Street Journal. It also comes on top of mandatory furloughs at Gannett and other publishers, not to mention a variety of other ways to stay afloat in increasingly stormy seas.

Here’s Spector’s memo, released Monday and obtained through a source:

As you know, this year is off to a difficult start-not only for us, but for our peers in the media industry and for much of the business world as well. The advertising environment is very difficult. The economy is, at best, challenging. Across the country, businesses are cutting jobs, furloughing employees and freezing pay. Some of our major advertising clients, like General Motors, have laid off thousands of employees; others, like Circuit City, have been forced to liquidate assets and go out of business. Obviously, developments like these put significant downward pressure on our revenue.

As a company, we’re fighting back like never before-developing new products, operating extremely efficiently, and re-examining everything we do with an eye toward maximizing our cash flow. However, given current trends and the likelihood that it will take some time for the economy to recover, we have to do even more. For that reason, we’ve decided to implement a salary freeze for non-union employees in 2009. For those employees represented by a union, the issue will be addressed in collective bargaining.

I know this is difficult and I appreciate your understanding. Compensation is our largest expense and a salary freeze enables us to share the sacrifice. Hopefully, freezing salaries now will allow us to avert more drastic action in the future.

Thank you again for all your efforts.
Gerry

(Photo: Reuters)

The interests of the paranoid and the preservers of the free press are converging: Mainstream media’s coverage of Washington, D.C., has shrunk to the point where big stories are being left uncovered. Meanwhile, more “niche” media outlets are moving in, but catering to the interests of the wealthy few.

That’s the essence of a 28-page report from the Project for Excellence in Journalism, which says that the number of journalists covering D.C. at the beginning of the Obama administration “is not so much smaller as it is dramatically transformed.”

You can read Howard Kurtz’s narrative in Wednesday’s Washington Post, or you could take a look at the main points we found in the release, presented bullet-point style for busy folks.

• A new sector of niche media has grown… offering more specialized and detailed information than the general media to smaller, elite audiences, often built around narrowly targeted financial, lobbying and political interests. Some of these niche outlets are financed by an economic model of high-priced subscriptions, others by image advertising from big companies like defense contractors, oil companies and mobile phone alliances trying to influence policymakers. [News you can use, and pay for. It may deprive the public of its low-cost right to know, but at least it's a business model. -ed]
• The contingent of foreign reporters in Washington has grown to nearly 10 times the size it was a generation ago.
• In 2008, newspapers from only 23 states had reporters based in Washington covering federal government… That is down from 35 states listed in the director’s 1985 edition — and that was before a host of further cutbacks in 2008.
• Since the 1980s, the number of newspapers accredited to cover Congress has fallen by two thirds. The number claiming a presence in Washington generally, according to Capitol directories, has fallen by more than half.
• Since the mid-1980s, the number of U.S. wire services and newspapers accredited to cover Congress… has fallen 72 percent… In 1985, reporters representing 564 of these outlets carried Hill credentials. By the early months of 2007, well before the latest round of cutbacks, that number had fallen to 160.
• The number of local TV and radio stations with access to feeds and news stories from corporate news bureaus in Washington has fallen 37 percent from the mid-1980s to 92 stations. [Does that mean fewer TV crews smacking me in the head with their cameras while I'm trying to cover a Senate presser? That used to irk me when I covered the Hill. -ed]
• The two most prominent [weekly magazines], Time and Newsweek, now operate with less than half the Washington staff they had in the mid-1980s.
• Today, many of Washington’s most experienced and talented journalists no longer explain the workings of the federal government to those in the general public, but to specialty audiences whose interests tend to be both narrow and deep. [Examples: ClimateWire, Energy Trader, Traffic World, Government Executive, Food Chemical News.]
• In short, those influencing poliyc have access to more information than ever, while those affected by those policies — but not organized to shape them — are likely to be less informed.

As always, we want to know what you think. How is DC coverage at your local news outlet? Is there any? Write to us.

(Photo: Reuters)

Another good reason to read lots of newspapers: You end up coming across all sorts of crazy ways to save the newspaper business. One of the most interesting that we’ve found so far comes from The Dallas Morning News, where Lazard executive John Chachas lays out some bold steps that the U.S. government could take to help save the press. (No, we’re not talking about financial support or “bailouts”.)

As he says in his introduction:

By the end of this year, some of America’s biggest dailies may well be run by their lenders. There is little evidence that banks would serve us well as the chroniclers of the nation’s news.

That’s because ad revenue is diving, costs are fixed, debt is threatening to shut down publishers and the papers have not yet found a way to make more money. So what can the government do? Wake up, Chachas suggests:

The Justice Department, the Federal Communications Commission and even the U.S. Senate have all, for decades, held that combining local dailies or owning papers along with other local media is anti-competitive. This is nonsense. Antiquated anti-trust laws have been extended to apply not just to the local concentration of economic power but also to how many “voices” there may be in a defined market. Yet somehow voices refer only to print. Regulators fail to consider the Internet or even cable TV as local competition.

The regulators’ insistence on a narrow product market definition is particularly inconsistent given their recent willingness to define the market more broadly in other contexts, such as in the merger of XM and Sirius. It is as if regulators went to sleep during the Eisenhower administration and woke up staring blankly at an iPhone.

Chachas says newspapers are the most trusted, credible source of local news and that their “imminent demise isn’t just some abstraction of destructive capitalism.” (We’ll drink to that.)

So here are his suggestions:

• Redefine “market” truthfully - all local media. “Combinations of geographically adjacent papers is one logical path to create efficiency,” he says.
• Grant the industry a short-term anti-trust exemption. Newspapers should be granted a finite (36-month) anti-trust law exemption to permit deployment of an industry-wide system to track and charge for re-use of their content.
• Eliminate local media cross-ownership restrictions that prohibit common ownership of newspapers and TV stations in the same market. (Robert Decherd, who runs A.H. Belo Corp, the company that owns the Dallas Morning News, is a big proponent of that, as luck would have it.)
• Allow in-market mergers. “If two papers in a market need a special exemption to set unified pricing, the market probably isn’t big enough for two papers.”

Those are some pretty hefty ideas, not your typical airy thoughts about “rethinking the paradigm.” In fact, maybe it’s time to add Chachas to the big newspaper thinker’s debate over at The New York Times website.

(Photo: Reuters)

Michael Wolff, author of the recently published Rupert Murdoch tell-all, “The Man Who Owns the News,” says that the News Corp chief executive would love to buy The New York Times. The only thing standing in his way is the Ochs-Sulzberger family which controls the Times. If they’re anything like the Bancrofts, former controllers of Dow Jones/Wall Street Journal, only an insane amount of money might persuade them to let go of the prized but struggling newspaper publisher.

Or maybe Murdoch himself. Whatever the scuttlebutt is about Murdoch’s plans for the Times, he told reporters on Thursday that he’s not interested in buying it. Speaking on a conference call after the company reported dismal second-quarter results, he said it might not be good for his image:

“I’ve got no desire to be an even bigger public enemy.”

This, of course, refers to the charge leveled at him from London to New York to Hong Kong that he uses the papers and other media that he owns to advance his personal business interests.

As for newspapers themselves? He already owns a bunch, from the Journal (which was part of a $3 billion-plus writedown on Thursday’s earnings) to the New York Post ($185 million writedown Thursday) to The Times of London to The Australian. And he’s keeping them, by the sound of things:

“I’ve got great faith. If we continue the way we’re going, we may even get lucky and not have so much competition at the end of it all.”

There he goes again — trashing The New York Times. But look at it this way, why not trash it until it’s beaten down enough that the Sulzbergers are compelled to sell? After all, Murdoch only has to be right today. He can change his mind tomorrow.

(Photo: Reuters)

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)

 If that notion of a recession-resistant entertainment industry hasn’t already been debunked, just get in touch with one of your pals out in Hollywood. They’ll tell you how bad it is — how jobs are disappearing.

Warner Brothers Entertainment is the latest to cut staff, announcing 800 jobs would be lost, or 10 percent of its worldwide staff.  NBC Universal and Viacom have already cut jobs, and industry watchers expect more job cuts to be announced by Walt Disney and Sony Pictures.

Perhaps more than other layoffs, the Warner Bros cuts send a signal of just how bad business look, The New York Times points out.

While not unexpected — Warner had been quietly preparing Hollywood to expect cuts — the layoffs rattled the movie capital because the studio is regarded as one of the industry’s healthiest. With a parade of hits like “The Dark Knight,” “Sex and the City,” “Get Smart” and “Four Christmases,” Warner recorded global ticket sales of $1.77 billion in 2008, up 25 percent from a year earlier.

But DVD sales plummeted in the fourth quarter and orders of scripted television programs — a huge Warner business — are expected to decline as networks cope with tumbling advertising sales. The struggles of Warner’s parent company, Time Warner, in the publishing arena have also put pressure on the studio to increase profitability.

The Wall Street Journal  also notes the challenges faced by parent Time Warner.

The deepening economic downturn has heaped added pressure on Time Warner to cut costs. The company recently announced a $25 billion fourth-quarter write-down to account for the tumbling value of its cable, publishing and AOL businesses, and once again scaled back its advertising outlook.

Warner Bros. was always seen as one of Time Warner’s more bloated divisions, with significant room for trimming and margin improvement. Time Warner’s movie business has already gone through one round of around 300 job cuts last year when Time Warner folded its New Line Cinema unit into Warner Bros. and shut down two boutique labels, Picturehouse and Warner Independent Pictures.

Keep an eye on:

• Google will halt its Print Ads program on Feb. 28 because the program to help newspapers make more money in online advertising sales was not working (Reuters)
• Tensions are rising at Sony over a restructuring aimed at cost cutting (FT.com) 
• Russian billionaire and ex-KGB agent Alexander Lebedev is buying a majority interest in London’s struggling Evening Standard newspaper for a nominal sum (Reuters)

(Photo: Reuters)

Don’t ask The New York Times how much its new front-page display ads cost. The paper won’t say. That didn’t stop the New York Post from asking ad buyers. Here’s the answer based on anonymous sources:

$75,000 on weekdays and $100,000 on Sundays.

Assuming that the Post counts Saturday as a weekday, and assuming no discounts or other special deals (and assuming this blog post is not written by a reporter who nearly failed at least one high school math class), this works out to $28.6 million a year: $23.4 million for 52 weeks of Monday through Saturday and $5.2 million for a year’s worth of Sundays.

Despite the TImes’s silence, the ad cost sounds about right. The Wall Street Journal charges $90,000 for its front-page ads, not counting special discounts. Other details sound similar too. Here’s the Post:

Apparently, The Times is leveraging the front page space to get advertisers to increase their ad buys.

The paper is limiting the front page to big advertisers willing to spend more on top of their existing budgets.

A new advertiser who wants access to the space has to commit to buying the ad 26 times during the year - for a total of almost $2 million, ad buyers say. The Times has previously run classifieds on the front page.

The Journal’s program is similar: limit the front-page membership to big advertisers and get them to commit. CBS’s marketing chief George Schweitzer told us that the broadcaster has committed to a number of runs throughout the year, but declined to say more than that.

The front-page ad news, which the Times announced yesterday, might have stirred up some muttering in journalism academe like it did a few years ago when the Journal started doing it because purists aren’t crazy about sacrificing prime real estate for news on the altar of dirty profit. Nowadays, folks are a little less squeamish about making the big sale, especially when considering the health of the newspaper business.

On a side note, the Post –  now a sister paper of the Journal under New York Times enemy Rupert Murdoch — story tries to have it both ways. It notes that the Times is late to the game, yet runs a caption over a picture of black-eyed Times Publisher Arthur Sulzberger Jr that says that he is “smashing the paper of record’s vaunted Chinese wall between news and advertising by peddling front-page space.”

Apparently there’s no honorable way to make a buck in journalism.

Keep an eye on

• CBS and Time Warner reach fresh broadcast deal. Now you can keep letting your brain atrophy on television. (Reuters)
• Washington Post No. 2 newsman Phil Bennett resigns, goes to work on a project about the future of news elsewhere in the Post (They must have this project around for everyone they oust. Remember Susan Glasser). That keeps the paycheck coming until he gets his next job. This happens right after post.com Web chief Jim Brady splits after chafing under a new layer of management and frustration because of ongoing print-vs-Web issues. Meanwhile, new Post editor and former Wall Street Journal top editor Marcus Brauchli might bring in former colleague Raju Narisetti, late of India’s Mint business daily. Next week on 90210! (Wall Street Journal)
• If you think that newspapers slept through technology changes in the past 50 years, you would be WRONG. Jack Shafer explains why, and does it a lot better than I’ve managed to do over countless barroom conversations with all my friends who hate newspapers. (Slate)

(Photo: “Spiderman” Alain Robert got free front-page advertising on the New York Times. Not in the paper but on the building. We recommend a different advertising strategy that won’t get you arrested. Reuters)

How bad is the economy? New Jersey’s largest food bank is in danger of running short of groceries for the low income individuals and families who need them. How do we know this? A new advertising campaign featuring home-grown rock star and activist Bruce Springsteen.

The Springsteen advertisement for the Community FoodBank of New Jersey will be running in The New York Times, The Star-Ledger, The Bergen Record, and the Daily Record on Sunday, Nov. 16th.

The campaign is titled “We Can’t Let This Bank Fail” — a play, of course, on the collapse of Lehman Brothers, Bear Stearns and others — and comes amid worries that the current economic crisis will take a toll on charitable giving even as more folks need some help. The FoodBank says the sickly economy has driven a 30 percent state-wide rise in those needing food.