Recovering Journalist

Get Me Rewritedown

The reverberations of McClatchy's "what were they thinking?" acquisition of Knight Ridder continue: For the second quarter in a row, McClatchy has been forced to take a writedown of nearly $1.4 billion in goodwill because of the declining value of the Knight Ridder assets McClatchy acquired.

"Goodwill" is a somewhat arcane accounting term, but the simple explanation is that it reflects the value of an acquired company above the book value of its assets, and companies are forced to write it down on their balance sheet when the company they acquired drops sharply in value. (Using an even more obscure accounting term, McClatchy calls the writedown "impairment charges." Ouch.) In other words, McClatchy has now had to take nearly $2.8 billion in goodwill writedowns on an acquisition that cost it $4 billion in the first place.

Or, here's another way to look at it, albeit in a slightly apples and oranges manner: The total market value of McClatchy stock these days is just a bit over $800 million. For the whole company. That's less than one-third of the past two quarters' writedowns. If McClatchy has to keep writing down goodwill, the whole shebang might just wind up at Goodwill.

Wise Words

Don't miss this terrific post by Douglas McLennan about why newspapers need to take the Web more seriously. What? You say they already take the Web seriously? Yeah, right. McLennan demolishes that illusion with spot-on points like this:

• Most digital operations are seriously under-staffed and under-resourced. They don't employ even the basic traffic-building strategies that independents are using with great success.

• Newspapers have declined to innovate as eBay, Craigslist, Monster.com, Google and myriad ad networks have sprouted, thrived and stolen away customers.

• Hundreds of small web operations have sprung up to compete with traditional newspapers, while news organizations remain mired in old conventions.

• Social networking has changed the way young people interact, yet newspapers have failed to meaningfully take the plunge.

• Pretty much every online initiative in the traditional news industry has been me-too-ism rather than bold invention.

• The backend digital news production structure at most newspapers is a mess.

• Many papers still bizarrely consider their online and paper versions separate operations.

• Most web operations are seriously understaffed and technically deficient, making what should be even basic tasks difficult to impossible.

There's a lot more. McLennan echoes a lot of things that have been said on this blog and a few others over the past year or so. His post should be required reading for newspaper publishers and executives attending the NAA convention this week. And the comments are great, too.

Foul Ball

You can't exactly call the people who run Major League Baseball geniuses (believe me, I used to cover the baseball business). Just look at the steroids fiasco for recent proof. But in case you need more, it's at hand: Following in the idiotic tradition of the NFL and other sports leagues in attempting to control coverage, Bud Selig & Co. have imposed draconian rules on how the media can cover baseball games this season. If you're the "bearer" an MLB press pass, here are some of the new, unbearable rules:

• "While a Game is in progress, Bearer shall not transmit or aid in transmitting any Game Information on a play-by-play or pitch-by-pitch basis, more frequently than once every half-inning of play (except to report on the occasional and significant historic event)." (Sorry, bloggers, tough luck.)

• "While a Game is in progress, Bearer shall not transmit, display, or aid in transmitting or displaying, any video, audio, pictures, photographs or other non-text based accounts or descriptions of Games ... that Bearer obtains at that Game in any media." (I guess that rules out any reporting by iPhone!)

• "Any video captured within the ballpark, excluding press conferences, must be limited to 120 seconds and cannot be carried live; ... no live or taped audio or video is permitted to be captured from 45 minutes prior to a scheduled game time until that game has concluded; ... a manager’s pre-game interview or other content may not be transmitted live and audio or video transmissions of such content may be no longer than 120 seconds; ... a manager’s post-game press conference may be captured via video or audio and transmitted (and archived for up to 72 hours) on Bearer’s website but may not be carried live; and ... interviews with players, Club personnel and baseball officials may be transmitted by Bearer on its website for a maximum of 72 hours, may not be longer than 120 seconds in duration and may not include any Game highlights." (All you local TV stations and Web sites who want to do video? Forget about it.)

• Oh, and these credentialed media sites aren't allowed to display more than seven photos of each game, or display those seven pix for more than 72 hours after a game (unless linked to a story)—and "such still pictures or photographs of any Game cannot be used as part of a photo gallery, the definition of which shall be determined by the Baseball Office of the Commissioner in its sole discretion."

This is unbelievable—but maybe not, given that it comes from the people who gave us the designated hitter, juiced ball and juiced players. I guess I understand why lawyers for sports leagues want to control their product and trademarks—and protect the lucrative league-owned Web sites that increasingly are muscling in on traditional media coverage.

But at some point, MLB's leaders and other sports executives are taking their eye off the ball. Sports in this country exists primarily because the media covers it. If coverage suffers, so do ratings and attendance (just ask the NHL, the WNBA and Major League Soccer). Baseball should be welcoming the press with open arms—that's how the sport is marketed to the paying public.

Online News Squared reports that media companies apparently are pushing back on these ridiculous restrictions; as I've said before, the ultimate solution is for the media to simply announce that it won't cover the games until the restrictions are lifted. Boycott the games, editors. Simple as that. The resulting public outcry, and impact on attendance, should knock some sense into the Lords of Baseball.

Major League Baseball is uniquely protected by an exemption from federal antitrust laws. Maybe it's time that MLB understands that the press has its own unique protections in the First Amendment.

Living La Vida Local

What's your hyperlocal strategy?

If you're a newspaper publisher or editor, or a TV station exec, you'd better have one. Because competition is coming fast for your most local business, providing news and information to your readers and viewers and monetizing that with advertising from local businesses. That's your strongest remaining franchise, and it's already under siege. But you ain't seen nothing yet.

Google is now fine-tuning Google News to deliver local headlines. Topix has been doing a version of this for a couple of years. Meantime, upstarts that traditional publishers have probably never heard of—Outside.In, EveryBlock, YourStreet—are doing ever-more-interesting aggregations of hyperlocal news, blogs and data, mashed up with maps, which just scream "local."

It's been more than a year now since Backfence failed, but smart people are still exploring the hyperlocal sphere, and while Backfence's problems were unique, our basic concept remains sound. Somebody is going to figure out how to make it work and make a business out of it, and when that happens, newspapers and local broadcasters lose their last unique offering. If you don't have an aggressive hyperlocal strategy, you're not going to be around in five years.

So where are the hyperlocal strategies? With the possible exception of WashingtonPost.com's terrific Local Explorer product, no traditional news organization is even close to being as advanced as the various upstart efforts in leveraging technology to reach down to the neighborhood level. And there still are only a handful of user-generated hyperlocal experiments by newspapers—notably Denver's YourHub and the Chicago Tribune's TribLocal.

With budgets being slashed, this isn't a good time to find money at traditional publishers for experiments like these. But they're vital to hope for long-term survival. Google and the others are coming for a piece of the $100 billion local advertising pie, and newspapers and local broadcasters need to start competing in this space, pronto.

Sam Zell and the Recovering Journalist Rorschach Test

Thanks to Tribune Co. mogul Sam Zell, we now have a handy Recovering Journalist Rorschach test.

If you watch the video of Zell muttering "fuck you" after responding to an Orlando Sentinel photog's insistent questions about journalistic quality and think, "Right on, Sam," you're a Recovering Journalist.

If you don't, you're still stuck in denial, a state of mind that has no idea that journalism is a business, doesn't get that it matters (far) more what readers think about stories than what journalists think of them, pines for the extremely bygone days when newspapers dominated the news universe—and is walking straight off a cliff clinging firmly to all of those romantic, noble but no longer realistic notions. Buh-bye. Nice working with you. You're toast.

Sorry folks. Zell's response may have been a bit salty, but he said exactly what every interview subject has thought at the hands of a pushy reporter with an agenda. I personally think Zell's way over his head at Tribune, carrying an enormous debt load in a bad economy that's going to sink him and the company's retirement fund sooner rather than later—but damn, he's fun to watch. He's challenging journalism business orthodoxy in ways that are long overdue.

Keep calling 'em like you see 'em, Sam. Some people—alas, maybe a lot of people—in this business really need to hear it.

Unfit to Print

In which Marc Andreesen—yes, the Silicon Valley legend who essentially invented the Web browser and founded Netscape and Ning—inaugurates the New York Times Deathwatch. (And I thought I was pessimistic?) Not a pretty picture, which is why the Wall Street machinations surrounding the company are so fascinating.

Ever Stranger Bedfellows

In the early '90s, Microsoft was the newspaper industry's bogeyman. Bill Gates & Co. were widely assumed to be aiming directly at the industry's birthright of readers and revenue. Fear and loathing abounded about such stealthy news products as Marvel (a code name for what later became MSN) and such not-so-stealthy initiatives as Sidewalk, Slate, MSNBC and Microsoft's overall move into the Internet through Windows 95 and Internet Explorer.

In newspaper boardrooms, hands were wrung, wagons were gathered and consortia were formed. (Disclosure: I consulted for New Century Network, an idea that was both behind and ahead of its time.) Heading off Microsoft at the pass seemed to be all that most of the industry thought about for the few years (if it thought at all).

However, as it turned out, Microsoft wasn't even the enemy. It was merely a symbol for the raft of new online competition for readers and revenue. Forget Microsoft: Suddenly newspapers were under assault from Web upstarts with ever-stranger names and more original business plans, such as Yahoo, Monster and Google. We know now that their threat—and the damage they've caused—dwarfs whatever anyone feared from Microsoft. (BTW, don't put any stock in harebrained speculation that Google will buy The New York Times. Google's too smart for that.)

Ultimately, Microsoft's ambitions to take over the journalism business—if it ever truly had any—cooled. Newspapers continue to scramble against all of the other new competition, and many recently formed a new sort of consortium with Yahoo to get access to the Silicon Valley company's technology and ad sales know-how. Former Knight Ridder exec Hilary Schneider has put together a package of tools and programs that definitely benefit Yahoo—by giving it access to the newspapers' content and audience—while also providing the newspapers with potential online advertising revenue and access to tools.

I was skeptical of the Yahoo deal when it was first announced—it seemed to benefit Yahoo far more than newspapers—but now that I'm seeing it from inside Philly.com, which is a Yahoo partner, the benefits are more clear, especially on the technology side. It simply gives the papers access to technology and features that they'd have to scramble to find elsewhere, at a time when they desperate need those advances to have any hope to stay competitive online. The Yahoo deal may not be perfect, but the alternative is pretty depressing.

And now, guess who wants to buy Yahoo? None other than ... Microsoft. It may no longer be the bogeyman. But if the deal goes through, the Seattle giant—itself doddering a bit these days—is going to be the newspapers' new best friend. How ironic.

There are several interesting posts about the Microsoft-Yahoo deal and its ramifications for the news and advertising businesses, including:

Greg Sterling
Jeff Jarvis
PaidContent.org
Alan Mutter