Thursday, April 17, 2008

At Raleigh N&O Job Cuts Loom

Back on Jan. 24 I posted Raleigh N&O Cuts Jobs, Outsources.

Today the Durham-based weekly Independent reports under Fiona Morgan’s byline the N&O is likely to make more job cuts.

Excerpts from the Indy’s story follow, after which I comment below the star line.

…Full-time news staffs at daily papers fell by 2,400 last year, a 4.4 percent drop and the largest decrease in 30 years, according to the American Society of Newspaper Editors' annual census released this week.

The News & Observer is not immune. At a meeting last week, executive editor John Drescher warned newsroom staffers there could be some tough cuts.

"We continue to have trouble financially and all options are on the table," Drescher says. He and publisher Orage Quarles III are discussing whether to cut payroll, pages or both. Dresher says he would prefer any staff reductions to be the result of attrition, as has been the paper's policy to date. "I hope that we're able to avoid layoffs." The newspaper employs 206 editorial staff.

Drescher says he expects a final decision from Quarles within two weeks. "Obviously I'll argue my case as best I can, but I understand that there are overall needs of the company too." …

"We're not the only newspaper in this situation," Drescher says. "Generally speaking, we've fared much better than most. The News & Observer Publishing Company made its budget last year; it's one of the few McClatchy newspapers to do so."

On March 30, The N&O published a set of articles discussing its future. Drescher was proud to announce that while paid daily print circulation of about 178,000 papers has "plateaued," online readership has grown. Add print readers to online readers, and the paper's total readership has grown 19 percent, he says.

"If these readership numbers were going down, I'd be really bummed out," Drescher says. "But the numbers are pretty strong, and that makes me feel confident that there's still demand for what we do."

The problem is how to make enough money online to recoup lost revenue. No one in the newspaper industry has figured out the answer.

The N&O went through a period of cost-cutting and restructuring last year under previous editor Melanie Sill. (See "What's going on at The N&O?" March 28, 2007.)

To reduce pages, two Sunday sections were combined, a change Drescher says he's been pleased with. Some editors, reporters and columnists were reassigned in lieu of layoffs. …

Morgan’s entire story is here.



I’m sorry for the people who will lose their jobs. I hope the N&O actually provides those people with substantial severance packages and not token ones as some news organizations have done.

Editor Drescher’s remarks sound like the Captain of the Titanic reassuring passengers: “I’m pleased to be able to tell you it’s been more than 20 minutes since we hit the iceberg, and we’re only listing slightly.”

I don’t know who Drescher thinks he’s fooling with talk about being, as Morgan reports it, “proud to announce that, while paid daily print circulation of about 178,000 papers has ‘plateaued,’ online readership has grown. Add print readers to online readers, and the paper's total readership has grown 19 percent, he says.”

The population and economy in the N&O’s circulation area has boomed for years. The Durham Herald Sun’s circulation in Durham and Orange counties, where the N&O and the H-S compete, has plummeted since Bob Ashley took over as H-S editor, meaning there were many thousands of former H-S subscribers the N&O could have signed up. And for the last two years the Duke Hoax – one of the biggest news stories in North Carolina’s history - has played out in the N&O’s circulation area.

And Drescher says he’s proud the N&O’s print circulation has plateaued.

Give me a lifeboat!

I’m going to post again on the Indy story.

For now, these stock quotes for the N&O’s parent company, McClatchy News (stock symbol MNI), may interest you.

According to

On Jan. 3, 2005, the first day of trading for that year and the time Ashley took over as H-S editor, MNI closed at 71.01.

On Mar. 24, 2006 the day the N&O “broke” the Duke lacrosse story MNI closed at 48.10.

As of 1 PM ET today, Apr. 17, 2008 MNI was trading at 9.34.


Mike said...

From Christopher Alleva at American Thinker:

The New York Times Company is circling the outer rim of its death spiral. Not unexpectedly, first quarter results were disappointing, even considering the difficult business environment.

Management was ready with spin to explain away the problems as not its fault. CEO Janet Robinson ascribed the weak advertising revenues to the economic downturn magnified by the effects of "secular change in our business." Robinson added that they are "diligently managing their business for the long term and transitioning into the digital era."

Ad revenue fell nearly 10%.
Circulation income showed a modest uptick. Undoubtedly, this came from the increase in the newsstand price to $1.50 and the cover price to $1.25 in the early third quarter of 2007. But squeezing revenue from circulation is always a fool's errand in the news game.

Raising prices decreases circulation and eventually pressures ad rates. In the jargon of strategic consulting, this is called "harvesting" a business. Of course, after the harvest a field tends to be pretty empty.

I cancelled my home subscription to the Washington Post almost four months ago and they're still dropping it on my driveway. Presumably, they are trying to meet minimum circulation guarantees to advertisers….

Anonymous said...


"Drescher was proud to announce that while paid daily print circulation of about 178,000 papers has "plateaued," online readership has grown. Add print readers to online readers, and the paper's total readership has grown 19 percent, he says."

The real question is what's happened to advertising revenue? The signs point to a rapidly deteriorating sitution.


Anonymous said...

John -

The MSM's motto is, 'If it bleeds, it leads,' that is except when it comes to their bleeding on the bottom line. That doesn't lead. I think the MSM's problems stem from their inability to separate fact from opinion. (Newsweek famously advertised in the 1960s and 70s that it could separate fact from opinion, now I think it and the rest of the MSM can't tell the difference.) If the MSM would only report the facts on the news on the news pages and the opinions on the opinion pages it might be able to recapture lost readership and ad revenues. Thank goodness for the internet. The MSM can no longer get away with reporting its own meta-narrative. Their impending deaths may focus some of the minds in the MSM to report the truth and not meta-narratives. It is people like yourself who have helped the truth be known when the MSM was writing fables about the Duke Hoax.

Jack in Silver Spring

Anonymous said...

McClatchy Watch: