Posted on 06/05/2008 2:05:23 PM PDT by abb
Date/Time: 6/5/2008 4:50:07 PM Title: Sam Zell and Randy Michaels memo Posted By: Jim Romenesko
Memo to Tribune employees
Partners,
Instead of recapping our first quarter numbers, which you can see in our news release online, we want to get to the heart of what we’re sure all of you are focused on after our earnings call today – our discussion around the changing business model for publishing.
What has become clear as we have gotten intimately familiar with the business is that the model for newspapers no longer works. Supply and demand are not in balance, and that manifests itself in two ways: 1. We are not giving readers what they want, and 2. We are printing bigger papers than we can afford to print First, our publishing business – and to reiterate, it IS a business – needs to retool itself to a customer-centric model. We have now reviewed dozens of reader studies done by Tribune over the years, and they present clear and consistent findings. Readers want:
- Unbiased, honest journalism - LOCAL consumer and community news - Maps, graphics, lists, ranking and stats
Some of our papers do some of these things well, and some of our papers do them better than others. But, ALL of our papers need to improve in this area. We’re in the business of satisfying customers, and we WILL respond to what they say they want.
The first paper to embrace this new customer-centric design will be the Orlando Sentinel, and it will debut on June 22. You’ll see all of our papers incorporate some level of redesign by the end of September.
Second, we must also strategically align the size of the paper we produce with what advertisers want. We will be assuming a 50/50 ad-to-editorial ratio base as a floor to right-size our papers. With that benchmark we can significantly scale back the size of the papers we print, and take significant costs out of our operating run rate.
We must find the balance between producing excellent products and producing products we can afford. And, we will find it.
We’d also like to mention interactive, which will be a primary source of revenue in our future. We are in the final stage of developing a platform for our websites that will enable us to take advantage of all the opportunities on the web – from e-commerce to social networking to selling key words and other activities.
This new product will come to each of the business units fully loaded and ready for prime time. It will be a simple tool kit that is pre-populated, but you’ll be able to customize and design it for your market, and your individual audiences. But the new sites will come with a budget, and with the expectation that they will be fully leveraged to generate revenue.
The new websites will roll out to the TV stations first, and we expect this phase to be completed by the end of August. Within the coming year, our papers will have transitioned to the new sites as well. You can preview a sample of this product line at KPLR-TV in St. Louis at cw11tv.com.
We started this year by rattling the cages, and since then we’ve continued to reinforce the urgency for change. We expect by now you understand the ‘do-or-die’ challenge that has been placed in front of us. We now have a roadmap to turn that challenge into opportunity.
Sam & Randy
Tribune to Measure Productivity of Journalists — and Possibly Cut Pages
By Jennifer Saba
Published: June 05, 2008 4:45 PM ET
NEW YORK Tribune executives sketched out the future of its publishing division during a Q1 conference call with media and investors this afternoon including fast and quick plans to “right-size” the newspapers.
One of the main strategies outlined by Tribune Chief Operating Officer Randy Michaels involves measuring the productivity of journalists. “This is a new thing,” he said. “Nobody ever said how many column inches did someone produce?”
Michaels knows, and then proceeded to tell listeners, that in Los Angeles the average journalist at the Los Angeles Times produces about 51 pages a year while in Harford, Conn., the average is more like 300 pages a year.
Michaels acknowledged that different reporters, such as those dedicated to investigative stories, turn out various amount of copy depending on job descriptions. He did not mention if online contributions are included in the count.
“You find you eliminate a fair number of people while not eliminating very much content,” Michaels explained about the strategy. “I understand there are other factors. ... If you work hard and are producing a lot for us, everything is great.”
When pressed by an employee at the Hartford Courant about the level of detail involved in productivity testing, Michaels said it depended on the job description. “The decision will not be made in Chicago,” he said. “It’s helpful data for our managers and publishers to have as we make decisions to right-size the paper.”
Michaels also addressed the number of pages that make up Tribune newspapers noting that only about 12% of costs come from the gathering of news while the rest of the cost is in production and printing.
He cited the number of advertising pages in the newspaper, using The Wall Street Journal’s overall page count as a yardstick. On some days Tribune’s newspapers were two-thirds full of advertising but on other days it was a lot less. “A paper looks good at 50% advertising,” Michaels said. “What you find out is that you can take 500 editorial pages a week out of newspaper and have a 50/50 ad-to-content ratio.”
Michaels said the Chicago Tribune is typically 80 pages per edition and then compared that count with The Wall Street Journal, which is around 48 pages on average. “If we take the Los Angeles Times to a 50/50 ratio eliminating 82 pages a week, the smallest papers would be Monday and Tuesday at 56 pages. It’s still larger than the Wall Street Journal. ... We can save a lot of money by producing the right size newspapers.”
When asked if the downsizing of newspapers would free up real estate value, Sam Zell, Tribune’s CEO, responded that everything is on the table.
“I think the answer is that we are a media company, not a real estate company,” he said adding the company is looking at holdings in markets like Los Angeles and Baltimore with valuable real estate. “I have no qualms about moving units,” Zell said adding that in the end Tribune should have very little of its assets wrapped up in real estate.
“It’s been five months. The further we go the more opportunities we see,” Zell said in his closing remarks. “We don’t intend to reduce the pace.”
Jennifer Saba (jsaba@editorandpublisher.com) is E&P’s associate editor.
Links referenced within this article
jsaba@editorandpublisher.com
http://www.editorandpublisher.com/eandp/news/mailto:
Find this article at:
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003813004
ping
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/04/AR2008060403770_pf.html
Microsoft’s Ballmer on Yahoo and the Future
By Peter Whoriskey
Washington Post Staff Writer
Thursday, June 5, 2008; D01
In an animated discussion with Washington Post editors and reporters yesterday, Microsoft chief executive Steve Ballmer offered his far-ranging views of upcoming changes in technology and the media.
snip
What is your outlook for the future of media?
In the next 10 years, the whole world of media, communications and advertising are going to be turned upside down — my opinion.
Here are the premises I have. Number one, there will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form.
10 years?
Yeah. If it’s 14 or if it’s 8, it’s immaterial to my fundamental point. . . . If we want TV to be more interactive, you’ll deliver it over an IP network. I mean, it’s sort of funny today. My son will stay up all night basically playing Xbox Live with friends that are in various parts of the world, and yet I can’t sit there in front of the TV and have the same kind of a social interaction around my favorite basketball game or golf match. It’s just because one of these things is delivered over an IP network and the other is not. . . .
Also in the world of 10 years from now, there are going to be far more producers of content than exist today. We’ve already started to see that certainly in the online world, but we’ve just scratched the surface. . . . I always take my favorite case: I grew up in Detroit. I went to a place called Detroit Country Day School. They’ve got a great basketball team. Why can’t I sit in front of my television and watch the Country Day basketball game when I know darn well it’s being video-recorded at all times? It’s there. It’s just not easy to navigate to.
snip
http://www.huffingtonpost.com/2008/06/04/vanity-fairs-michael-wolf_n_105285.html
Vanity Fair’s Michael Wolff: “If Newsweek Is Around In Five Years, I’ll Buy You Dinner”
www.chicagotribune.com/business/chicago-tribune-co-newsprint-cuts-jun05,0,6652934.story
chicagotribune.com
Tribune Co. may cut newsprint, ‘right-size’ papers
By James P. Miller
Tribune staff reporter
3:09 PM CDT, June 5, 2008
Tribune Co. officials think the media concern “could take about 500 pages out of our newspapers every week,” company-wide, by reducing the proportion of editorial content to advertising to a 50-50 level, Chief Operating Officer Randy Michaels told the Chicago company’s creditors Thursday.
In discussing the company’s efforts to alter its cost structure in the face of rapidly eroding industry conditions, Michaels said in a conference call that Tribune is “actively pursuing a plan to right-size” the newspaper operation.
The recently installed COO also disclosed that Tribune officials have been examining the productivity of individual reporters at the company’s newspapers, and have observed a significant discrepancy between the output of individual reporters.
In addition, he said, the productivity of the reporting staffs at Tribune’s smaller dailies is much higher — in terms of sheer output — than at larger papers such as the company’s big Los Angeles Times paper.
snip
If they can focus on that aspect it would go a long way, but somehow I doubt they really understand that. They probably think that means they need to bash Bush even more.
If I come up with any other advantages of newspapers, I'll be sure to post them.
(I'm not counting the old standbys: fish-wrap; bird-cage liner; housebreaking aid for puppies; etc.)
whatta laugh!
no one would call the los angeles times
“unbiased honest journalism”!
That's why I like google. Simple text without the screaming poo-flinging monkey trying to get your attention.
If I come up with any other advantages of newspapers, I'll be sure to post them.
Carbon storage to fight "global warming."
The tree takes in carbon, it gets pulped, flattened, printed and is sent to underground warehouses for a million years of storage, thus removing CO2 from the air. If you really wanted to, I guess you could read it between printing and storage.
If I understand this correctly, they are assuming that they can reduce the editorial content without losing the readers whose presence attracts the advertisers. Sounds like a graveyard spiral to me.
Precisely.
I’ve not had a bird or parakeet in years, but IIRC, the tabloid size fits much better than the broadsheet size...
http://www.poynter.org/forum/view_post.asp?id=13380
Topic: Memos Sent to Romenesko
Date/Time: 6/5/2008 7:22:11 PM
Title: Memo to Hartford Courant employees
Posted By: Jim Romenesko
From: [Hartford Courant executive editor] Teutsch, Clifford
Sent: Thursday, June 05, 2008 6:17 PM
To: Courant News Staff
Folks,
Some of you have raised questions regarding today’s communications from Randy and Sam.
I can give you some answers now and more in coming days. We are going to have to make significant newshole and staff reductions. I will give you specific numbers as soon as they are finalized and I can share them. We want you to know what we face. We will be asking for your help in re-inventing the paper. We’ll let you know the process and timetable soon.
Randy said that Tribune newspapers have reviewed the productivity of
writers. I was asked to count bylines and look at numbers of stories for
people in comparable jobs, i.e. town reporters, sports reporters,
investigative reporters. I did that. It’s nothing new for us; we often
look at byline counts when we do annual evals. If something jumps out at us from the numbers we explore it further with the writer. There is no
hard formula, no right number, no minimum, etc., etc. For the review
that Randy referred to, we didn’t count unsigned briefs or web stories.
Some people do far more of this work than others. All of us are smart
enough to know that numbers are just one imperfect indicator of productivity. Some stories are much harder to do than others, etc. Also,
I hope I don’t need to say we are focused on quality as well as quantity. We will continue to spend weeks and months on stories that are worth it. By the way, as far as the numbers go, Courant writers as a whole were very productive.
I will get you more information as soon as possible. If you have a concern, please talk with me.
Cliff
http://www.poynter.org/forum/view_post.asp?id=13379
Topic: Letters Sent to Romenesko
Date/Time: 6/5/2008 7:11:36 PM
Title: About productivity
Posted By: Jim Romenesko
From JEFFREY WEISS, Dallas Morning News: Subject — About productivity. Somebody needs to say it: Journalism ain’t widgets. And byline counts are a terrible primary method to measure the quality of a reporter’s work. Important stories take longer than less important stories. Analysis takes longer than stenography. Reporters at smaller papers often are forced into pumping out copy at a rate that makes it extremely difficult to offer much thought. I’ve been there. You want to kill the big newspapers? Turn them into a receptacle for nothing but fast-turned rewrites of news releases, daily crime stories, and the minutes from City Hall. Your “productivity” will go through the roof. None of which denies the reality that the system is broken. But taking a hammer to the plumbing is seldom a good way to fix a leak. [Permalink]
in Los Angeles the average journalist at the Los Angeles Times produces about 51 pages a year while in Harford, Conn., the average is more like 300 pages a year.If the Los Angeles Times lays off about 83% of its employees it can obtain the Hartford Courant's level of productivity.
Zell is trying, but a chunk of the staff will revolt.
At least it allows more to be fired.
1. The Orlando Sentinel hasn’t been worth wrapping fish in since Charlie Reese was forced to retire.
2. They Web 2.0’ed their websites, and it looks shiny, and empty of content. “You can preview a sample of this product line at KPLR-TV in St. Louis at cw11tv.com.”
http://www.nytimes.com/2008/06/06/business/media/06tribune.html?_r=1&ref=business&oref=slogin
June 6, 2008
Tribune Co. Plans Sharp Cutbacks at Papers
By RICHARD PÉREZ-PEÑA
Tribune Company newspapers like The Los Angeles Times and The Chicago Tribune will quickly cut costs — by printing fewer papers and employing fewer journalists — top company executives said on Thursday.
Samuel Zell, the chairman and chief executive of Tribune, and Randy Michaels, the company’s chief operating officer, revealed the cuts during a conference call with Wall Street analysts.
They also said the struggling company has looked at the column inches of news produced by each reporter, and by each paper’s news staff. Finding wide variation, they said, they have concluded that it could do without a large number of news employees and not lose much content.
Mr. Michaels said of the changes, “This is going to happen quickly.”
Mr. Zell said, “I promise you he’s underestimating the level of aggressiveness with which we are attacking this whole challenge.”
They said the company would aim for a 50-50 split between ads and news across all the news pages (excluding classified ads and advertising supplements). Mr. Michaels said this would mean eliminating 500 pages of news a week across all of the company’s 12 papers.
“If we take, for instance, The Los Angeles Times to a 50-50 ratio, we will be eliminating about 82 pages a week,” Mr. Michaels said, leaving the smallest papers of the week at 56 news pages.
snip
http://www.latimes.com/business/la-fi-tribune6-2008jun06,0,3237664.story
From the Los Angeles Times
Tribune says it can meet debt payments for year
Newspapers in the chain will be smaller. Deeper staff cuts are signaled.
By Thomas S. Mulligan
Los Angeles Times Staff Writer
June 6, 2008
Tribune Co. executives said Thursday that thanks to new credit arrangements and the pending $650-million sale of Newsday, the debt-burdened media company would have enough cash to meet its interest and principal payments this year and otherwise would be in compliance with its loan agreements.
Tribune, parent of the Los Angeles Times, KTLA-TV Channel 5, the Chicago Tribune and other properties, is struggling with annual loan payments of about $1 billion during a severe advertising recession and a shift of readers to the Internet. Chief Executive Sam Zell said in a conference call with analysts that although first-quarter advertising revenue from newspaper publishing was down 15% from a year ago, the situation had improved since March.
Randy Michaels, chief operating officer, said the company planned to impose further deep cuts in newsprint costs and newspaper staffing and could do so without major adverse effects on content.
At The Times, for example, 82 news pages per week can be eliminated, giving the paper a 50-50 ratio of news to advertising, Michaels said. Across Tribune’s nine newspapers, he said, some 500 news pages per week could be cut, for an unspecified but “substantial” savings.
Smaller papers with more graphics, maps and lists will be rolled out companywide beginning this month at the Orlando Sentinel, with the rest of the newspapers following by the end of September, Michaels said.
snip
http://online.wsj.com/article/SB121270007809749889.html?mod=2_1567_topbox
Tribune Plans Cuts in Pages, Staffers at Papers
By SHIRA OVIDE
June 6, 2008; Page B8
Tribune Co. Chairman Sam Zell detailed planned changes to the company’s struggling newspaper division, including a reduction in the number of pages and staffers at its daily papers.
The changes indicate Mr. Zell is following through quickly on pledges to overhaul the newspaper-and-television concern. Mr. Zell took the helm of the company after he led an $8.2 billion buyout in December. He has pledged to change attitudes and business operations at Tribune, but his task has been made more difficult by declines in newspaper advertising and by the company’s $13 billion debt load stemming from the buyout.
As part of Mr. Zell’s corporate overhaul, Tribune plans in coming weeks to begin trimming the page counts at its newspapers to ensure that the amount of space devoted to news is roughly in line with the amount of space devoted to advertising, he revealed on a conference call with lenders. The move could pare about 500 pages, or 12.5%, from the weekly page total of Tribune’s newspapers, excluding classifieds and other ad sections.
snip
www.chicagotribune.com/business/chi-fri_rosenthaljun06,0,3045941.column
chicagotribune.com
Tribune Co. faces big cuts, fast
Phil Rosenthal
Media
June 6, 2008
Having concluded Tribune Co.’s newspapers are hardly too rich and unlikely too thin, Chairman Sam Zell and Chief Operating Officer Randy Michaels told lenders Thursday that the Chicago Tribune, Los Angeles Times and its other dailies are going on a crash diet.
With the financially strained newspaper industry watching, Tribune Co.’s papers will become radically more slender—critics will say diminished—with about 12.5 percent fewer pages companywide by the end of September, with some papers possibly seeing significantly deeper cuts. Tribune Co. would not disclose the projected cost savings.
And if Tribune Co. newsrooms are to shrink as well, Michaels said, journalists will be held accountable for their productivity.
The heavily leveraged media company’s leaders said selling control of Newsday, its Long Island, N.Y., paper, and the auction for Wrigley Field and the Chicago Cubs ballclub, for which potential bidders will receive the long-awaited financial data within days and submit indications of interest next month, should take care of its big bills due this year and next.
snip
Tribune Q1 2008 Earnings Call Transcript
Alex Clipper - Banc of America SecuritiesZell's apparently intends to dump some commercial real estate on the market. If America's commercial real estate market mirrors its residential real estate market (unknown to me) his actions will offer an interesting tutorial on selling real estate in a down market.
Okay. In terms of your real estate value, to what extent does the fact that your downsizing the publishing business, is there any sense that you are freeing up some of your real estate to actually be monetized, or is that not a factor?
Samuel Zell
I think the answer is we are a media company. We are not a real estate company. We view all of our real estate to be assets that if better deployable, we should deploy accordingly. We have initiatives going on in Baltimore, Orlando, Chicago, Los Angeles where we have very significant real estate holdings of measurable value, and we are working on and addressing the question of how we maximize those values.
I have no qualms about moving units. We just recently moved our TV station into our newspaper in Fort Lauderdale. We discussed the possibility of moving various pieces in Los Angeles, other places -- this is not a real estate company. In the end, we should have very little of our assets devoted to real estate.
http://poynter.org/forum/view_post.asp?id=13384
Memo to San Jose Mercury News staff
6/6/2008 12:13:26 PM
From: [Mercury News editor] Butler, Dave
Date: Fri, Jun 6, 2008 at 10:58 AM
Subject: Budget update - 6-6-08
Folks:
I’ve had lots of people ask about our budget for the next fiscal year in light of the drastic cuts that Sam Zell is proposing for the Tribune Company newspapers, both in terms of people and newshole. Here’s where we are:
1). We’re still crunching numbers like crazy for the budget year that starts July 1. The tough component – and it’s not mine to do – is to predict where advertising is going to be a year from now. Who knows? We should have this wrapped up in late June. Could it change later? Of course. But from what I’ve seen – and I’ve been in plenty of meetings – every effort is being made to produce an attainable budget while launching all sorts of efforts to find new business as Mac Tully has reported to you on other occasions.
2). We are doing all that we can to limit any newsroom staff reductions to attrition. So far, so good, though I can make no promises.
3). We will likely have some newshole cuts in light of a 15%-plus increase in the price of newsprint for the next year. One thing we’re exploring – as are a number of other MNG newspapers – is to produce “Quick Read” Monday and Tuesday newspapers. As you all know, we’ve been moving down this path for some months and would likely continue to do so, particularly tightening up Monday.
4). We’ll likely have some other nip-and-tuck newshole cuts. Kevin Wendt is reviewing some ideas to see if they are practical and the editors will be discussing them over the next few days.
5). It is CRITICAL that we all work together to reduce the length of stories so we can get in as much information as possible for our readers. It has never been more important than it is today for all reporters and editors to demonstrate their outstanding writing and reporting skills by cramming the same information – or what’s essential for the story — in less space. This is hard. It does not work on every story, but please, please, work harder at making stories – particularly the more “routine” ones — shorter. We want to continue having in-depth work and we will – but we have to be much more disciplined in what merits 25 inches and what merits 5. (We also need to continue to refine our story planning. It is embarrassing to me – as I know it is to you – when we don’t have a strong centerpiece “in the bag” for Page 1 and others clamoring to get on the front. We all need to contribute more in this area.) /CONTINUED
Memo to San Jose Mercury News staff
6/6/2008 12:07:14 PM
6). We need to think about how we can bust up stories and packages and put sidebars or graphics online only as an added bonus for readers. Many newspapers do this better than we do. I’d like Randy Keith to take the lede is raising this issue day after day with people. The world is transitioning to online and this is one way that we can help speed up the process.
7). I suspect you’ll be reading a lot as this Tribune saga unfolds about story production. All I can say about that is I expect everyone to carry his or her appropriate load – and that certainly differs by job, by assignment, by how much online work you’re doing. We all know that. We also know some people are doing less than they could while others are working their butts off. Those who could do more are likely to hear about that from me and the other editors.
8). The rest of the budget – non-payroll – is tight. But, we still will do some training, we still will travel, we still will cover the news as it needs to be covered. As I have asked in the past, please don’t spend a penny if you don’t have to. We have good uses for all of them!
9). We’re about to embark on one of the most important episodes in years – the installation of a new computer system. Those of you who have gone through this know it is a pain at the outset but then winds up to be wonderful once you learn how to use the new system. This newsroom is long overdue to get the latest technology and that is what you are getting. I urge you to jump into this process, to hold down the complaining and focus your energy on learning the new system. It’s tough when you’re putting out the paper on the old system and learning the new system and that’s what we face this summer. But we have an outstanding staff. Lots of smart people. Let’s make this easy rather than hard.
10). And finally, it will soon be 6 months since I joined your team. Once we nail down this budget I want to have a staff meeting where we talk about this past year and some goals for the next year. We should be able to do that in a few weeks. In the meantime, I thank you for your efforts, for the welcome you have given me, and for all of the hard work. You all lost several valued colleagues this past year. My hope is that we won’t lose many this next year. We all know – as I have been saying in my one-on-one sessions – that we can’t control the economy, but we can control the quality and quantity of journalism we do and we simply must focus on producing the most compelling, interesting, lively and relevant newspaper and web site possible.
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