Time: Herald is an endangered species

From Time Magazine's list of The 10 Most Endangered Newspapers in America:

3. The Miami Herald, which has a daily circulation of about 220,000. It is owned by McClatchy, a publicly traded company that could be the next chain to file for Chapter 11. The Herald has been on the market since December, but no serious bidders have emerged. Newspaper advertising has been especially hard-hit in Florida because of the tremendous loss in real estate advertising. The online version of the paper is already well read in the Miami area, Latin America and the Caribbean. The Herald has strong competition north of it, in Fort Lauderdale. There is a very small chance it could merge with the South Florida Sun-Sentinel, but it is more likely that the Herald will go online-only with two editions, one for English-language readers and one for Spanish.

Yes, the Herald will finally come the conclusion that any outside observer would have made a long time ago, that their business lies in the "news" part of newspaper, not the "paper" part. Getting rid of the dead tree version will allow the Herald to focus on its core business which is providing news content to readers and advertising opportunities to clients.

1 Year share price chart for McClatchy

Ouch. As you can see that's an evaporation of 94.1% of the company's stock value.

Race to zero nearing completion

I've mentioned several times that the Herald's parent company's (McClatchy) share price was in a race to zero. Today a reader notified me that the price was at 75 cents. In March of 2005 the price was 100 times that amount ($74.80). Of course that was before McClatchy acquired the Miami Herald and other troubled newspapers from Knight-Ridder. The company's stock will soon be worthless. Hopefully historians will correctly document this as a lesson on how NOT to run a company, namely by alienating, insulting and underestimating the company's customers. When the Herald goes out of business I suppose Herald Watch will go out of business. That's OK with me. I don't have much time for it these days anyway.

H/T: Big Bob

Odds and Ends

McClatchy stock could be worthless.

It's pretty close already. This stock traded in the mid $70s three years ago.

Herald Execs hold retreat at the Biltmore.

This guy should be really, really pissed.

Herald Ombudsman considers censorship (for Cuban-American journalists only).

Odds and Ends

Herald Circulation is down 11.8% to 210,884 and Sunday circ is down 9% to 279,484. Ouch.

Herald parent McClatchy's shares closed at $2.22 cents on Monday. In April of 2005 MNI shares traded for $74.50. Double ouch.

Herald Watch has learned that Oscar Corral, the author of the Marti Moonlighters article that resulted in the resignation of the Herald's then publisher Jesus Diaz and the disgrace of the paper's then executive editor Tom Fiedler has accepted a buyout from the Herald and will be among the additional staff cuts made by the company.

Corral secured ignominy when he was busted soliciting a teen-aged prostitute in Miami. No word on to whom he will be providing content in the near future.

More layoffs at McClatchy

McClatchy Watch informs us of this report that McClatchy is reducing its quarterly dividend. Hard to fathom why they would give any dividend at all the way the company is bleeding cash.

McClatchy is also slashing another 10% from its workforce.

We can surely expect that the Heralds will be affected. I guess they offended the Orishas.

Additionally ad revenues were down 17.8% in August compared to August of last year. A lot of people scoffed when it was suggested that newspapers need to sell more ads for less money (e.g. reduce the ad/editorial ratio to about 50/50). With declining circulations I don't see another way for the traditional fishwraps to survive. Show me an advertiser that wants to pay more to reach less people.

McClatchy shares closed up, at $3.40, after trading at a 52-week low of $2.57 during the day.

Pruitt resigns one of his McClatchy positions

The chairman of Herald parent company McClatchy, Gary Pruitt, has announced that he is stepping down as "trustee of four trusts that control about 12.5 million shares of [the company's] Class B stock."

An interesting note in the article is that:

The McClatchy family owns about one-third of the company’s shares, but the Class B stock gives members 80 percent of the voting control, according to a Securities and Exchange Commission filing late Friday.

McClatchy's shares traded in $50 range a couple of years ago and are now trading at about $3.60. The newspaper business is taking it's lumps but McClatchy is taking more than most.

H/T: Bob

McClatchy shares in a race to zero

Share's of MNI, the Herald's parent corporation closed at $3.89 today, up from a 52-week low of $3.73 a few days back but dismal nonetheless.

McClatchy to go private?

Newsosaur speculates that privatization of several newspaper companies including the Herald's parent McClatchy is possible. With the price of MNI shares as low as it is what Newsosaur says definitely makes sense.

MNI Shares continue to circle the drain

Once again shares of Herald parent, McClatchy, dropped during trading. Today the price closed below $5.00 for the first time ending the day at $4.93 after hitting ANOTHER 52-week low of $4.82.

The street continues to be unimpressed with the company's cost cutting moves.

Last week Standard & Poor's reduced MNI's corporate credit rating from BB- to B+ with a 'negative outlook' and:

It also cut its rating on the senior unsecured debt that Sacramento-based McClatchy assumed when it acquired Knight-Ridder Inc. in 2006, from B to B-minus, and kept unchanged its assessment that creditors holding that debt are unlikely to recover more than 10 percent if there is a payment default.

The race to zero continues

Shareholders in McClatchy continue to have no faith in the company as shares fell again today, closing at $5.31 after trading at ANOTHER 52-week low of $5.06 during the session.

Times of London makes archive available for free

As I've recommended here several times, the Miami Herald should open up its electronic archive in an effort to increase online readership and thus ad revenue, well The Times of London has made 200 years worth of its archives available for free. Of course this will be a much used resource by many web surfers.

H/T: Penultimos Dias

MNI shares way down

Shares of Herald parent company McClatchy are traded at a new low of $6.79 during today's session.

A quick summary of McClatchy by the numbers is available here.

A quick Pitts stop

Good friend Alex from Miami & Beyond brings a Herald column by Leonard Pitts to my attention. In the column Pitts come to many of the same conclusions that I have come to. I wish I could take credit for being so forward thinking so as to influence people in the newspaper industry about what they need to do survive but the reality is that the conclusions that Pitts and I drew, no doubt independently, should be drawn by anyone with two brain cells to rub together.

In any case here are some excerpts (emphasis mine):

We in the business of selling news have yet to adapt. Yes, every newspaper has a website now. Some, like The Herald, have TV and radio facilities as well. I'm talking about something more: a radical change of focus.

We still tend to regard our websites as ancillary to our primary mission of producing newspapers. But I submit that our primary mission is to report and comment upon the news and that it is the newspaper itself that has become ancillary.

So maybe we should regard the Internet not as an extra thing we do, but as the core thing we do. Maybe we should maximize the fact that we know our cities as no one else does. Maybe we should make our websites not simply online recreations of our papers, but entities in their own right, destination portals for those who want news and views from and about a given city, but also for those who want to find a good doctor in that city, or apply for a job in that city or reach the leaders of that city or research the history of that city. Maybe the goal should be to make ourselves the one indispensable guide to that city. And then maybe we should hire away the bright people who figured out how to make Yahoo and Google profitable and ask them to make our sites profitable, too.

Agreed on all counts. Then Pitts makes the only idiotic statement in the piece:

Maybe -- heretical idea ahead -- it's as simple as requiring online readers to pay for the product, just as our other readers do.

The internet, as an information source, is largely about free. I understand that internet advertising does not command the same amount of dollars as the fishwraps have been able to historically command but the cost of maintaining an online news organization is substantially cheaper than printing and distributing hundreds of thousands of dead tree editions EVERY DAY. Think about what the rising cost of fuel is doing to the distribution costs of newspapers.

A few weeks back, Carl Sessions Stepp, senior editor of the American Journalism Review, published a call to arms, an essay exhorting journalists to stop weeping over the state of their industry and launch an all-hands-on-deck, man-on-the-moon campaign to reinvent and save it. Consider this my way of seconding his motion.

Pitts accurately describes the mindset of many journalists who are traditionalists and purists. If you've read Bob Norman's lamentations, you know what I'm talking about. It reminds me of baseball fans who can't accept free agency, and new ways of evaluating players. Those changes are here to stay whether you like them or not.

Even more bad news for McClatchy

Shares of MNI hit another 52-week low of $7.35 during trading today. This despite the announcement of layoffs and other policies that that company projects will lower expenses by close to $100 million. Newsosaur believes these reductions may not be enough and that further layoffs may be necessary. Wall Street seems to agree.

JOA for Herald and the Sentinel?

Newsosaur believes a joint operating agreement is a viable option for South Florida's two struggling major English language daily newspapers. Such an agreement would have the two competitors share resources like printing presses, trucks, etc. while keeping separate editorial staffs. It's a way reducing expensive duplication that exists.

I knew the Miami Herald had a JOA with the Miami News before that paper ceased operations in 1988 but I didn't know (as Newsosaur points out) that the terms of that JOA included the Herald having to pay former News owner Cox Communications a portion of its profits through 2021.

I think a JOA makes a great deal of sense since, as I've mentioned many times, this whole thing is moving to the internet fast. That means newspapers everywhere have to find ways to cut non-newsroom expenses. Trucks with their fuel and maintenance costs, printing press operations, etc. are extremely expensive.

Newsosaur believes deadlines would have to change in order to accommodate both papers since, unlike the News, the Sentinel is also a morning paper. Newsosaur doesn't contemplate what would happen to El Nuevo Herald, McClatchy's Spanish language paper in the Miami market.

More details on layoffs

John Dorschner's short article has been updated to include more details about Herald layoffs:

McClatchy Chief Executive Gary Pruitt said The Miami Herald was being shrunk more than most of the group's other newspapers, because ``The Miami Herald's performance has been worse than most, if not all, of the newspapers, and secondly there were some opportunities for greater efficiencies.''

While having editions in English and Spanish made The Miami Herald hard to compare with the group's other newspapers, Pruitt said it was generally true that staffing at The Herald, formerly a Knight Ridder newspaper, was more than that of the historic McClatchy newspapers.

Pruitt said he was committed to continuing to offer readers a quality product. When asked if he viewed the reduction as cutting fat or muscle, he said, ``There's no doubt that we will have somewhat fewer resources, but we will remain the largest news operation in each of our markets, and we will be able to produce quality news reports.''

Translation: "The Heralds were fat."

The Herald newsroom is expected to lose about 60 positions, including some now vacant. About 40 newsroom personnel are slated to take voluntary buyouts or be laid off.

Those include 12 newsroom supervisors, five in the International Edition, two copy editors, three reporters, four designers and layout specialists, two on the state desk, two critics, two photographers and six in archiving and calendar.

Archiving, calendar and the International Edition will be outsourced to workers in India. The company is also exploring transferring its radio operations to a third-party company, but the services to public radio station WLRN will remain the same.

Translation: We're getting rid of managers that were overpaid and underworked, as well as others whose functions can be replaced by low wage people overseas.

In April, veteran Herald reporters, photographers and support staff in the newsroom were offered a buyout. Four accepted that offer.

The Herald offered those buyouts to 2% of its workforce (more than 30 employees), only four accepted. The others should have taken it, I'm sure the packages offered were better than the severance they will get after being laid off.

Where the cuts are coming from

McClatchy Watch has a running tally on the numbers of employees to be laid off at each McClatchy paper.

Not surprisingly, the Miami Herald leads the list with 250. What's not clear thus far is how many of the 250 (if any) are coming out of El Nuevo Herald.

All the Santeros in Hialeah...

couldn't put the Herald back together again.

Below is some video of the Santeria altar at which Herald employees were mockingly making offerings to save their jobs. It looks like the Orishas didn't take too kindly to the gallows humor.




H/T on the video to P.J.

McClatchy announces restructuring...

and 10% workforce reduction:

McClatchy said it is reducing workforce through both voluntary and involuntary separations, as well as managed attrition, involving about 1,400 full-time equivalent employees...

250 of those employees will be from the Miami Herald:

The Miami Herald announced Monday morning it plans to reduce its workforce by 250 full-time employees -- 17 percent of its staff -- in response to declining circulation and advertising revenue.

Publisher David Landsberg said the reduction includes 190 full-time and part-time employees being laid off, plus the elimination of other open positions.

More on "Bloody Monday" at McClatchy Watch.

Bob Norman has the Herald internal email.

Herald Watch first reported on possible layoffs back on May 22.