More Wretched News for Newspapers as Advertising Woes Drive Anxiety

2016-10-28 09:52:14

 

More Wretched News for Newspapers as Advertising Woes Drive Anxiety

The gloom began earlier this month, when Gerard Baker, the editor in chief of The Wall Street Journal, sent a memo to employees that said, in part, “every story should be as short as it needs to be.” The next week, William Lewis, the chief executive of Dow Jones, which owns The Journal, announced a newsroom review that he said would be “underpinned by a series of cost-management initiatives.”

Two days later, on Oct. 21, the anvil fell: Mr. Baker informed employees in another memo that The Journal was looking for a “substantial” number of them to take buyouts, and that layoffs were in the offing.

With print advertising continuing to drop precipitously, you would be hard-pressed to find a newsroom devoid of uncertainty anywhere in the country. Companies like Gannett have recently announced layoffs, and its stock price has plunged during a monthslong pursuit of the company that owns The Los Angeles Times and The Chicago Tribune. The New York Times recently went through buyouts and has acknowledged that its newsroom will get even smaller next year. And for journalists at The Wall Street Journal, anxiety in the last several weeks has been especially pronounced.

Numerous Journal employees, who spoke on condition of anonymity because they feared endangering their jobs, said in interviews and conversations that they have received few specifics from management about the size and scope of the coming cuts. Mr. Baker said in one of his memos last week that changes to the print newspaper would “involve some consolidation of sections of the paper and the teams that produce it.” The employees said that the staff is now openly speculating about the potential for once-prized sections, including Greater New York and Personal Journal, to be folded or significantly reduced. Separately, employees have been working without a union contract since Oct. 1, and negotiations with the company are ongoing.

“There’s a lot of concern, a lot of worry,” said Timothy Martell, the executive director of the Independent Association of Publishers’ Employees, the union that represents about 1,300 workers at Dow Jones. “People are anxious, and they want to know how these changes will affect them and their families.”

A spokeswoman for Dow Jones declined to comment for this article.

Across the country, those working in the newspaper industry are fretting as the end of the year approaches. Driving much of the anxiety is a steep drop in print ad revenue, once the lifeblood for newspapers. Spending on newspaper advertising in the United States is projected to fall 11 percent this year, to about $12.5 billion, according to the Interpublic Group’s Magna.

At the same time, digital advertising and other forms of revenue have been slow to pick up the slack, leading news companies, including The New York Times, The Guardian and Gannett, the owner of USA Today, to cut costs by downsizing.

“More and more publishers are coming to the recognition that there’s a new normal,” said Alan D. Mutter, who teaches media economics at the University of California, Berkeley, and writes about the media on the blog Reflections of a Newsosaur. “And the new normal is not nearly as nice as the old normal was.”

With quarterly earnings looming, newspaper companies are facing something of a reckoning.

On Thursday, Gannett, which announced this week that it was laying off 2 percent of its work force, said print advertising revenue in its publishing segment fell 15 percent compared with the same period a year earlier, driven in part by a 35 percent decline in national print advertising. Digital ad revenue rose 6 percent, but the increase was largely because of recent acquisitions. Gannett is among the biggest publishers in the country, with more than 100 newspapers.

“While we saw signs of improvement late in the third quarter, we were disappointed with our performance,” Robert J. Dickey, the chief executive of Gannett, said in an earnings release. “As we expected, it was our most challenging period in 2016.”

Gannett has been pursuing an acquisition of Tronc, which owns The Los Angeles Times and The Chicago Tribune and was formerly known as Tribune Publishing, since late April. In that time, Tronc has rebuffed several offers, and Gannett’s share price has fallen roughly 50 percent. Gannett did not discuss the deal with Tronc in its earnings release or during its earnings call on Thursday. Stock prices for both Gannett and Tronc plummeted on Thursday after a report by Bloomberg News said that the banks financing the potential deal had backed out; trading of Tronc’s stock was halted at one point and ended the day down 28 percent. (Tronc, whose new chairman, Michael W. Ferro Jr., has opposed a sale, will report its third-quarter earnings on Tuesday.)

On Thursday evening, however, three people briefed on the negotiations said the deal discussions were not on the verge of breaking down. The people spoke on condition of anonymity because the discussions were ongoing. Representatives from both Tronc and Gannett declined to comment.

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