Monday, May 28, 2018

Pondering the Future of Our Local Newspaper

Photo by Lorraine Dusky
Me, my protest t-shirt and my protest sign outside the Montauk, Long Island vacation home of Heath Freeman, president of Alden Global Capital.
There is a scene I love at the end of the 1972 Robert Redford film "The Candidate."

Redford's character, the naive political novice Bill McKay, has won the unwinnable race against entrenched incumbent Republican Crocker Jarmon.

McKay is about to give his victory speech and, looking a bit dazed, he turns to his campaign manager Marvin Lucas, played in a brilliant low-key performance by Peter Boyle, and says "now what?"

Throughout the film, the McKay and his team give increasing focus to a single goal, winning the race, and less and less time and thought to what they would like to accomplish should they win.

As I stood Friday outside Heath Freeman's vacation home, a $4.8 million, five-
Screenshot from Zillow.com.
Heath Freeman's vacation mansion property
is outlined in white.
bedroom, five-bath mansion overlooking Lake Montauk at the tip of Long Island, holding a sign that read "Invest in us or sell us" -- I felt a little bit like Bill McKay (but much less handsome).

I looked at my sign and thought, "now what?"

Not that we're at the point that we've prevailed against the cartoonishly capitalist corporate raider who is stripping the meat and bones off local journalism only to invest the salaries of laid off journalists into spectacularly failed investments.

Far from it.
Screenshot from The Nation.
Here's a closer look at the Montauk house before Freeman
began expanding it.

The picture of the private equity hedge fund company Freeman and his mentor Randall Smith run, as painted in such publications as The Philadelphia Inquirer,  The New York Times, and The Nation is "a caricature of capitalism at its most greedy and amoral," as reporter Julie Reynolds wrote.

Salaries of reporters, editors and photographers who once held our local governments accountable, chronicled the highs and lows of our student athletes and undertook civic campaigns to better our communities are now literally paying instead for some of the most incredibly questionable investments in the history of Wall Street.

One included investing in one of Russia's worst polluters, with connections to President Vladmir Putin; another, in a Brazilian company that became the target of that nation's largest political scandal; and a third, a U.S. drug store chain named Fred's that, as of 2017, had lost $112 million since Freeman took the reins, according to reporting by Reynolds:
"To put that in human terms: at a cost of less than Alden’s gamble on Fred’s stock, the 350-plus news workers lost in the past two years could have kept working — and keeping their communities informed — for at least another five years."
Finally, the editorial page staff at The Denver Post, which Freeman's Digital First Media is currently strangling, along with its much smaller sibling, The Pottstown Mercury, had had enough and staged the kind of revolt that would only happen in a newsroom.

They wrote about it.

A lot.

You can find links to The Denver Post's single act of defiance (subsequent attempts were censored, followed by resignations in protest) by clicking onto this article on the web page run by The News Guild.

That's the union, part of the Communication Workers of America, representing many of the papers owned by Alden's Digital First Media company and for which Reynolds writes most of her spectacularly researched articles.

That's the same union that was meeting with Digital First officials to negotiate a new contract, including a request for our first raise in three years, while I was standing outside Heath Freeman's house holding a sign.

Having served on negotiating committees, my hopes and sympathies are with those Guild negotiators. Their job is not an easy one.

Industry analysts say the company earned nearly $160 million last year, while DFM’s own executives have said the company is solidly profitable. In fact, according to information published May 5 by newspaper analyst Ken Doctor, Digital First Media earned $18 million among the newspapers it owns around Philadelphia, which includes The Mercury, The Reporter, The Times-Herald, The Delaware County Daily Times, The Daily Local News and a fistful of weeklies. 

The 30 percent profit margin earned in "the Philadelphia cluster," is the largest in the company, which is one of the largest newspaper owners in the nation.

That should worry people beyond Pottstown, because the strategy of strip-mining newspaper jobs to generate cash for more bad investments is the same everywhere Digital First owns a newspaper. And they are certainly not interested in investing any of that profit back into the newspapers which are producing it.

According to a May 24 negotiating bulletin from The News Guild, "DFM attorney Marshall Anstandig sat at the negotiating table and said “I can’t sit here and apologize for the fact that we are profitable and our owners want us to be as profitable as possible. We have owners who are very concerned about staying in the black and quite frankly that is their prerogative.”

He concluded by adding a phrase I have heard many times at the negotiating table, “there is no wage proposal at this time.”

I suppose I'll have to take that as also being the answer I would have gotten from Mr. Freeman had he come to the door after I knocked Friday.

Although a woman I presume to be his wife told me he wasn't home when she pulled out of the driveway, the Dave Matthews Band music blaring from the outdoor speakers suggested otherwise.

So I walked to the front door and knocked.

A housekeeper answered and I asked to see Mr. Freeman. I stepped into the foyer at her invitation and I followed her eyes up as she looked to the second floor balcony and said "someone is here to see you" to the man I recognized as Mr. Freeman who was looking back at me and my "#NewsMatters" T-shirt.

He did not come down.

The housekeeper asked if he was expecting me.

Definitely not, I said.

So she asked me to wait outside and he would speak to me there.

Subsequently, she came out and asked how I knew where he lived. "It was published in The Nation," I replied.

So she said, "it would be best if you call him."

So I asked for the phone number and she said she did not have one. I replied that seemed highly unlikely.

Then I left.

My trusty reporter's notebook in my pocket, I had decided ahead of time that given the opportunity to speak face-to-face to the man who will eventually eliminate my job (perhaps sooner now that I've published this account) I would ask one question: "Mr. Freeman, what value do you place on local news?"

That is, after all, our product.

But that does not seem to be the view of Mr. Freeman and company.

Bernie Lunzer, the president of my union, put his finger on it I think when he spoke to The American Prospect last December:
“The traditional chains had to downsize, but they still thought like newspaper people — what sustains the product and the community. “With private equity, it’s about squeezing out the 20 percent and anything goes. Use it up, sell it, or just kill it. The profit is the product.”
It seems like there is little future in ownership by a company that considers its
only product to be profit.

Hence, the Guild's new mantra, "Invest or Sell."

Which brings us back to a young Robert Redford and Bill McKay.

Sell us to whom? Buyers are not exactly lining up for companies that produce single-digit profits these days.

In some ways, the Trump era is a kind of warped golden age of journalism, at least for the big boys. Subscriptions, digital and otherwise, are soaring at The New York Times and The Washington Post as people look for a place where sanity and reality have some kind of foot-hold.

But the Post is thriving mostly because it is owned by Jeff Bezos, founder of Amazon.com, who seems to like having newspaper in his portfolio and is satisfied with much smaller profit margins.

In Minneapolis, Glen Taylor, the billionaire owner of the Timberwolves basketball team, purchased the Minneapolis Star Tribune out of bankruptcy four years ago.

The newspaper makes a profit -- not vulture hedge fund-level profit -- but enough to keep it sustainable without cutting staff. So he doesn't.

By contrast, next door in the newsroom of the St. Paul Pioneer Press, owned by Digital First Media, the newsroom hemorrhaging  continues.

But is that the only way local journalism can survive? Getting purchased by a well-meaning billionaire? There are only so many of them around and I'm not aware that any of them live in Pottstown, PA.

Although I certainly wouldn't mind if that happened to The Mercury, it's not exactly a fool-proof plan for sustaining local journalism.

Photo by Karen Maxfield
If you're going to carry a protest sign to a corporate mogul's vacation home
in Montauk, what better place to make your point than it's iconic lighthouse
and to ponder the question, "Now What?"
Lots of people smarter than me, and with way more money than me, have made plenty of attempts to find a sustainable model that ensures the function of local journalism survives.

But I have yet to see one that can be duplicated elsewhere.

Consider that Peter Barbey, the wealthy owner of The Reading Eagle, recently announced lay-offs in that newsroom, once considered impregnable to such things.

Locally, former Mercury publisher Joe Zlomek produces The Sanatoga Post, a digital hyper-local news site that is sustainable, but not for a large staff.

And, I don't think its giving away any secrets to point out that Joe also has a full-time job.

He has several other local sites as well and frankly I'm not quite sure when he sleeps, but as sustainable models for moderate-scale 24/7 news gathering goes, it lacks the 24/7 part.

So I hope that my fellow journalists, union members and non-union members alike, will begin to turn their considerable talents and attention to that vital question, all at the same time we are fighting for our publication's lives with owners who have no interest in keeping them alive, only in bleeding them for cash.

Otherwise, if we focus only on that fight, and we actually get what we asked for -- a sale to another owner who is not an altruistic billionaire -- we may find ourselves like Bill McKay asking "now what?"

5 comments:

  1. I loved the attempt at confrontation with Freeman; congratulations! I wish he would have been a stand-up guy and talked with you, but that is too much to expect. Cowering on the second floor suited him.

    There are several examples of large-scale independent news-gathering successes. See the VT Digger (https://vtdigger.org/), The Batavian (http://www.thebatavian.com/) or The Tucson Sentinel (http://www.tucsonsentinel.com/). All have decent budgets, big staffs, and that 24/7 feel you mentioned. The Sanatoga Post will someday be like them too.

    Sadly, I don't see a pleasant end to Digital First employee woes. I do have a suggestion: beat Freeman at his own game. The Guild should invest in creating an online start-up, an experiment in a metro where it thinks it has the greatest chance of success (either against a competitor or not). The union needs to become a publisher (albeit now digitally and not in print) for a single outlet, learn what it must learn to succeed, then expand the model to a second or more metros. Publishers with the most appealing products will win, and the news ecosystem might flourish again.

    That said, I'll second Bruce Mowday's sentiment. Excellent post.

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  2. Thank you Evan and Joe for what you do. Your quest for truth is extremely inspiring.

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