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Philly Newspapers Under Knight-Ridder: Beyond the Numbers

Posted by chanders on August 21, 2008

Philly.com in 2000, before the KRD centralization.

Philly.com in 2000, before the KRD centralization.

A couple of good questions about my previous post in the comments. A Cassel argues “KR’s managers were hardly geniuses, but blaming them for the disaster that’s overtaken their former empire is like blaming the lifeguards on Sri Lankan beaches for the tsunami deaths. What happened was, and is, bigger than all of us.” Paul B adds that “Your argument that the decline of the Philadelphia newspapers was due in large part to chain ownership is unconvincing. There are enough non-chain newspapers out there (Washington DC, St Petersburg, Buffalo come to mind) that would make it possible to analyze if being part of a major chain affected financial performance during the past few years.”

Let me say first off: I’m not an expert on newspaper finances or ownership economics. Nor am I an expert on Philly newspapers under the Knight-Ridder regime. Probably a lot of people reading this post know a lot more about this than I do (especially ex-PNI employees) so if you have insights, please continue to share them! If I’m an expert in anything, it’s in journalistic work and the relationship between the work of institutionalized (read: ‘professional’) and non-institutionalized (read: ‘blogger’) journalists.

That said — my fieldwork this summer and some basic poking around has convinced me that there were two aspects to the end of the K-R tenure that were particularly disastrous in Philly, and probably elsewhere. The first problematic aspect of the public / chain ownership model? The relentless focus on the quarterly bottom-line to the exclusion of a long term plan.  In October 2000 the New York Times wrote this:

“By almost any business measure, the Knight Ridder newspapers in Philadelphia would be deemed a success. Since 1995, profit margins at The Philadelphia Inquirer and The Philadelphia Daily News have more than doubled, reaching close to 19 percent after years of single-digit doldrums. Good? Absolutely. Good enough? Not for long. For 2001, the target margin is 21 percent. And now there is talk about 5 percent budget cuts at the papers, if not more. Anxiety is as plentiful as oxygen in The Inquirer’s newsroom.”

And regardless of the merits of those strategies, they just didn’t seem to me to promote a long-term plan for dealing with profound and fundamental change.

The Project for Excellence in Journalism 2007 report on the “State of the Media” summed it up this way:

Now, there has been a new turn in the debates over ownership. Starting in 2005 and accelerating in 2006, there have begun to be questions not only from journalists but now from corporate managers and investors about whether the dominant model of media ownership, the public corporation, is still preferred. And the questions are no longer simply moral ones … The one thing that can be said with certainty — to a much greater degree than was true a few years ago — is that the notion that a diverse public corporation is best suited to have the wherewithal, resources and experience to manage the future of media is no longer gospel. The concept of the media conglomerate, in that sense, has been put into play.

Second problematic aspect? I have two words for you. Or maybe four. Market Leader. Doesn’t ring a bell? How about this one– Real Cities. Now, I really don’t have an interest in revisiting the Knight Ridder Digital battles of 2002, and from what I can tell there was a lot of ink spilled on this in the professional press at the time (they’re still fighting about it on Romensko!) But from everything I’ve seen this summer, the move to standardize the local web site design and management in San Jose, while there may have been a business logic to it,  was an absolute disaster in terms of promoting and encouraging the kind of journalistic work that newspapers needed to do to make the transition online. Without going into a lot of detail here, I have pretty good ethnographic evidence that the Philly.com, Inquirer, and even the very small Daily News online staff were doing things on the web in 1999 that they are just now starting to do again in 2008. In an online journalism world where the local initiative is king and where you need a small, flexible staff that can operate quickly, with a high degree of independence … well, the years 2001-2005 are lost years as best as I can tell.

Let’s end with a riddle. How did Philly.com do this in 1997, and what happened between then and now?

One Response to “Philly Newspapers Under Knight-Ridder: Beyond the Numbers”

  1. Davisull said

    “A small, flexible staff that can operate quickly, with a high degree of independence…” — that’s what some newspapers had in the mid-1990s when the Web was a toy. Then KR decided that its future was RealCities. Well, OK, as you say, don’t fight that battle again. But it keeps being fought, like the Spanish Civil War, because it was never resolved in KR and pinged and ponged around from year to year, and so everyone can say they were right and would have succeeded had their plans been followed. One can say that the uncontrollable growth of the Web would have undermined any long-term plans, but KR never could resolve the conflict between its desire to have a corporate Web strategy and its publishers’ and editors’ desires to run their own shops. KR resembled the Holy Roman Empire more than it did a corporation, but it presented itself as a corporation and was continually beaten up by investors about its failure to act like one. Tony Ridder once said in a meeting at our newspaper, “Do you want to work for Gannett? I don’t want to work for Gannett.” But investors were pretty happy with how Gannett was run because they ran it like a big corporation. So KR was trying to compete with Gannett in terms of the stock price, while not being Gannett in terms of operations. I think they always feared this was a losing hand but they figured they would play it as long as they could.

    On the question on the previous post: Metro newspapers have been in trouble since the late 1980s when their traditional big retail advertisers began to either close or move to direct mail (groceries, department stores) or simply not advertise at all (Walmart), and their circulation began to decline in real numbers. The loss of the p.m. papers at first made the decline make sense because of circulation overlap, but then it became clear that people weren’t picking up the newspaper habit in the same numbers as before. This had nothing to do with the Web, which didn’t exist yet. People kept saying “I don’t have time to read all this,” but newspapers assumed they were just putting other aspects of their life, such as jobs, commuting, children’s sports, scrapbooking, etc., above reading the newspaper due to mistaken priorities, and they got even bigger and stories got longer. And stacks of unread newspapers piled up in kitchens. Circulation was declining, traditional advertising clients were declining, the only thing you could show was growth in revenue, particularly in classified, and the only way you could show it was to say, you have nowhere else to go, so we will charge you more for the ads. Then, suddenly, there was somewhere else to go, at the same time as the post-2001 recession, and KR, Tribune, etc. were out on a tree limb.

    The only thing they could have done to then plan for the future was say, “Hey, we’re going to make 7 percent and invest the money in the future,” but Gannett or JRC would have kept their profit margins at 25 percent or higher and KR and Tribune would have been sold anyway. But the initial problem wasn’t how to grow in the Internet age. The problem was that they couldn’t figure out how to consistently grow their metro dailies in the pre-Internet age. The Aberdeens and Bellevilles of the world did just fine, but Philadelphia was 20 percent of KR’s revenue.

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