Back in March 2006 when McClatchy Company stock was selling in the mid-40s, Melanie Sill, executive editor of McClatchy’s Raleigh News & Observer used her Sunday column to tell readers:
I'm optimistic about newspapers' potential. So is McClatchy's CEO, Gary Pruitt.And just a few months ago, Sill, now executive editor at McClatchy’s flagship paper, the Sacramento Bee, told readers:
In a piece published in this paper and others last week, Pruitt noted that the newspaper's demise has been predicted for most of the 400 years since it was invented.
"We survivors are evolving still and employing new tools to leapfrog forward," he wrote. …
In newsroom discussions, we often consider what we'd do if we arrived here as a competitor to The Bee with an editorial staff of 245, a newspaper that reaches 934,000 readers each week and a Web site averaging close to 2 million unique visitors each month. …So what did the Bee do next?
Our newsroom roster is smaller than it was a few years ago, but our ambitions are larger and our responsibility to the community stands constant.
As much as we use the past as a measuring stick, The Bee's value will be demonstrated not by what we have done but what we do next.
Lots of things, with the most notable drawing the attention of the AP which reported the other day:
McClatchy Co.'s Sacramento Bee and Fresno Bee offered voluntary buyouts to a majority of their full-time employees Monday, a week after The Modesto Bee made a similar offer. McClatchy also will freeze pay across the company for a year starting Labor Day, while Gannett Co. announced in mid-August it was cutting 1,000 jobs, including 600 layoffs. …There’s very likely much more bad news still to come from McClatchy.
This from JinC Regular Ken in Dallas who’s usually spot on (see post thread here):
Reviewing the MNI balance sheet, dated 6/30, it appears they are perilously close to running out of cash. Their cash balance showed only $9.3 mil on hand as of 6/30.According to Market Watch, McClatchy's stock closed Friday, Aug. 29 @ $3.63. The company's bonds have "junk" ratings.
Looking at what happened from March to June, it appears they were forced to pay down $200+ million in LT debt. That drained their cash and short term receivables. There are probably restrictions from their LT lenders on what they can and cannot do in terms of refinancing.
The company is, by any measure, insolvent. If they are not sold immediately, they will be forced to file for chapter 11 protection. ...
Sill's bravado is typical of how most news executives have been responding to the problems facing their organizations.
These execs seem to think bravado and blogger-bashing mixed in with heaps of self-praise about their reliability and high standards of ethics will get them through to the light that has to be somewhere at the end of the tunnel. After all, their indispensable, right?
Very few news executives have been willing to admit the obvious: their business model is broken; radical change is needed.
An Aug.24 NY Times' article - "A Different Way to Pay for the News You Want" - will interest anyone who knows newspapers need a new model that will generate the revenue s they need to survive.
Excerpts from the NYT article - - -
You think your local water supply is polluted. But you’re getting the runaround from local officials, and you can’t get your local newspaper to look into your concerns. What do you do?
A group of journalists say they have an answer. You hire them to investigate and write about what they find.
The idea, which they are calling “community-funded journalism,” is now being tested in the San Francisco Bay area, where a new nonprofit, Spot Us, is using its Web site, spot.us, to solicit ideas for investigative articles and the money to pay for the reporting. But the experiment has also raised concerns of journalism being bought by the highest bidder.
The idea is that anyone can propose a story, though the editors at Spot Us ultimately choose which stories to pursue. Then the burden is put on the citizenry, which is asked to contribute money to pay upfront all of the estimated reporting costs. If the money doesn’t materialize, the idea goes unreported.
“Spot Us would give a new sense of editorial power to the public,” said David Cohn, a 26-year-old Web journalist who received a $340,000, two-year grant from the Knight Foundation to test his idea. “I’m not Bill and Melinda Gates, but I can give $10. This is the Obama model. This is the Howard Dean model.”
Those campaigns revolutionized politics by using the power of the Web to raise small sums from vast numbers of people, making average citizens feel a part of the process in a way they had not felt before. In the same way, Spot Us hopes to empower citizens to be part of a newsgathering enterprise that, polls show, many mistrust and regard as both biased and elitist.
Other enterprises have found success with this approach, which, in the Internet age, has become known as “crowdfunding.” This financing model takes its name from crowdsourcing, a method for using the public, typically via the Internet, to supply what employees and experts once did: information, research and development, T-shirt designs, stock photos, advertising spots. In crowdsourcing, the people supply the content; in crowdfunding, they supply the cash.
Charities have used crowdfunding, not necessarily under that name, for years. And one Hollywood studio, Brave New Worlds, is financing its movies by soliciting people over the Internet to pay for them before they are made.
The Spot Us experiment comes, not coincidentally, as newspapers around the country lay off reporters and editors by the hundreds and scale back their coverage to cope with a financial crisis brought about, in no small measure, by the rise of the Internet.
Another experimental venture, Pro Publica, a nonprofit group led by Paul Steiger, a former managing editor of The Wall Street Journal, is being bankrolled by several major foundations to pursue investigative projects that it will then offer to newspapers and magazines. ...
The rest of the Times' article is here.
What do you think?
Hat tips: McClatchy Watch, Ed in NY