Monday, Aug. 17, 2009 | The new bosses at The San Diego Union-Tribune hope to reach an elusive target this year: Profit. And they’ve managed to convince the most skeptical of audiences — their remaining journalists — that they just might do it.
Officials expect a swath of initiatives, including advertising partnerships, hyperlocal content and shorter stories, will help the newspaper crawl out of the red after a disastrous 2008 and 2009.
These aren’t unusual strategies in the struggling newspaper industry. But there is a twist: the new management is providing previously undisclosed revenue numbers and hopeful projections to newsroom staffers, who came out of an all-hands meeting last week with newfound optimism.
“I went into the meeting not super-receptive, given that this is the management team that had laid off more than 100 people the day before,” said one newsroom staffer. “I came out feeling better about the future of the paper than I have in two years.”
Two other newsroom workers agreed with that assessment, and all three said they were hopeful and impressed by the new management’s willingness to criticize the old regime. (The staff members requested anonymity for fear of antagonizing the new bosses.)
The positive feelings are remarkable considering how the U-T has been plagued by poor morale and severe financial troubles in recent years. The paper has physically shrunk by about half since 2006, and several rounds of layoffs and buyouts have eliminated about half of all jobs companywide. Three rounds of layoffs targeted the newsroom alone. It lost some of its biggest and most well-respected names.
Despite the new rays of hope, the U-T still faces many challenges as new owner Platinum Equity enacts its plans. Its circulation has slumped, advertising remains limp and, in the view of at least one newspaper consultant, it’s still lagging the rest of the industry.
“The kinds of steps that they’re taking today are several years behind the times versus what other newspaper companies have already done,” said former newspaper executive Alan Mutter. “The fact that they’re doing it now suggests that the management running the paper was less imaginative and aggressive than it should have been.”
Paul Bridwell, a Platinum Equity executive who now serves as the U-T’s chief restructuring officer, seemed to acknowledge as much during the two-hour newsroom meeting last Thursday.
Unlike the previous management, “we’re not hoping for a turnaround. We’re driving toward a turnaround,” he said, according to the recollection of a staffer in the room.
The U-T’s financial numbers have been grim. Bridwell told staffers that the paper made about $67 million in profit in 2006, as the local real-estate boom fizzled, and about $37 million in 2007.
But the paper only made $1 million in 2008 and was projected to lose $8 million in 2009, Bridwell told the staff.
“I’ve never seen anything like that from the Copleys,” a newsroom staffer said, referring to the family that owned the newspaper until the spring. “People were shocked when they put numbers up on a screen like that.”
As a private company, the Union-Tribune’s financial information isn’t made public.
The declining numbers are par for the course in the newspaper industry, where metropolitan papers like the U-T have been hit hard by declines in both circulation and advertising.
But Bridwell told employees that the U-T now expects to make $5 million in profit this year.
Employees also learned that the newspaper’s overall revenue has dropped 53 percent since 2006.
Other newspapers have suffered similar declines in revenue, said newspaper consultant Mark Potts, forcing publishers to slash costs. “Any business that loses 50 percent of its revenue in a short period of time has got real problems. They can’t cut that fast.”
To the surprise of those at the U-T newsroom meeting, officials were not shy about casting the previous ownership in a bad light.
“I don’t recall the name Copley ever being mentioned, but there was sort of a subtle criticism that the previous management team dropped the ball, particularly in the last year or so,” another staffer said.
The officials indicated that the previous management was “slow to come up with ideas to stop the hemorrhaging,” the staffer said. By contrast, the new bosses seem decisive, the staffer said, and “determined to not sit around a table and wring their hands and debate endlessly whether to proceed with one initiative or another.”
Decisiveness won’t cure the U-T’s ills on its own. The officials who spoke at last week’s meeting unveiled several new initiatives designed to put the paper on better financial footing. (The officials included Bridwell, who referred a call for comment to a company spokesman who wasn’t immediately available, and publisher Ed Moss, who declined to comment for this story.)
Officials told the newsroom that stories will be shorter. The U-T’s website will be redesigned, and partnerships will begin with Yahoo!, AutoTrader and the job site Monster.com.
The newspaper also plans to embrace hyperlocal content that’s only distributed to specific cities or even neighborhoods.
Newspapers have long experimented with zoned editions designed for individual communities. The U-T, for example, on certain days publishes editions for several regions of the county, including the South Bay and East County.
Zoning is designed to give readers more stories about their cities and allow smaller advertisers to be able to afford ads. An ad for, say, just the U-T’s East County edition costs less than one that would appear in every paper countywide.
The problem is that newspaper advertising departments have trouble adjusting to small-time ad sales, Mutter said. “The size of their sales organization, the compensation for the sales people, and their systems are all geared to large sales. Being able to find a cost-effective way to sell advertising is the challenge.”
Zoning is also more expensive because newspapers must print more editions, using more newsprint and ink.
The North County Times launched the biggest local zoning effort in the late 1990s, distributing eight zoned editions to different cities. It now has just two zoned editions in the county.
The officials told the U-T staff that major layoffs are finished. The paper laid off 304 employees this year, including 112 last week, and now appears to have fewer than 750 on staff, roughly half as many as the 1,400 it employed in December 2007.
As for the May round, Bridwell said those jobs should “arguably” have been cut under the previous Copley management, a newsroom staffer said.
But officials acknowledged that there may be more layoffs as the paper becomes more efficient in terms of technology.
The U-T continues to produce much of the paper through an antiquated “paste-up” system that requires employees to individually print out stories and ads and then attach them to boards used in the printing process.
Since the late 1980s and early 1990s, other newspapers have designed pages via computers. The system requires fewer employees and allows for greater flexibility.
The U-T, however, stubbornly stuck with the old system.
Overall, a newsroom staffer said, the new management appeared to not just be offering “abstract solutions.” Instead, they were saying, “Here is the problem and here’s how we’ll fix it.”
“I was reassured there was some kind of plan in place,” the staffer said.
One part of the plan: Growth, not just later but right now. Bridwell, the restructuring chief, told the newsroom that he expects something new to happen this week: The number of new U-T subscriptions is expected to surpass cancellations.
Randy Dotinga, a San Diego-based freelance writer, contributes to the North County Times, which is mentioned in this article. Please contact him directly at rdotinga@aol.com with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.