Monday, December 8, 2008

Bellows and Buzz, Part III

Buzz Merritt's "Knightfall" contains the famous 1995 discussion between former Knight Ridder CEO Tony Ridder and his top editors:

"Tony Ridder, the new chairman and CEO, had the difficult task of addressing a roomful of [the recently deceased chairman Jim] Batten proteges who, he knew, were at best wary of him. After a speech with brief and seemingly obligatory bows to the need for good newspaper content, he opened the floor to questions.

"The first one was: 'Tony, what keeps you up at night; what do you most worry about?'

"He thought for a minute. 'Electronic classified,' he said.

"The air went out of the room."

Ridder is generally accounted to have been a less than outstanding CEO, one who grounded his ship on the rocks. And it was Ridder's responsibility, as head of the company, to make the people who worked for him see his vision. You sell the audience you have, not the audience you want. Then you try to get the audience you want.

Still, Tony Ridder was right, and free online classifieds have done more to weaken daily journalism than any government, any malicious department-store owner, any lazy proprietor, could ever have done. Yes, newspapers could have done many things better; yes, newspapers became set in their ways; yes, the merger of Federated and May Co. department stores, and the increasing success of retailers not dependent on traditional advertising, weakened the whole enterprise. But Ridder was right to be kept up at night by free online classifieds. And he was right to voice this problem publicly far ahead of others.

Merritt, writing from 2005, noted that "electronic classified is a substantial threat." Probably he would state that more strongly in 2008. But in the end, he feels, it was not really his problem. His problem was to cover the news. Tony's problem was to raise the money to do so and give it to his editors. He says Ridder "described the threat as one to the bottom line, rather than a threat to the company's tradition of public service journalism." Ridder was new in his job, so perhaps he simply assumed that his editors would see a threat to the bottom line as a threat to the company's tradition of public service journalism.

Tony thought like a businessman first. He didn't think like a newsman first, unlike his predecessor, Batten, and unlike Jack Knight, who set the tone that endured at his company and Knight Ridder for decades. Merritt goes into at great length the cultural differences between the news-first Knight brothers and the it's-a-business Ridder family. He rues the day the Ridders took control. He remembers that news coverage gave the Knights a win in Miami, although the same news values did not save the Chicago Daily News under Knight nor give the Detroit Free Press a circulation lead.

Merritt also points out that the investors who bought Knight Ridder stock did not see it as their role to give editors the money necessary to cover the news. They saw it as their role to demand higher returns. The only point to them of a newspaper company was to make money. Merritt notes that this was fatal to a news department. He bemoans that newspapers were allowed to fall into the hands of such people. He writes of how, when the Knights went public with their stock, it was inconceivable that institutional investors would hold most of it. The Knights and Ridders didn't come up with poison pills because they saw no reason to have them. The only people who would invest in newspapers were people who wanted to invest in newspapers, Knight thought. The whole thing is deplorable. If only Jack Knight's values had prevailed.

OK. I agree. Nearly all journalists would agree. But -- so what?

Lord knows I have no solution to the problem of lost revenue. I wouldn't expect Buzz Merritt to have had. I wish Tony's editors would have said: "Geez, Tony, if you're right this will cripple us. What are we going to do about it? Should we come up with editorial content to support redesigned classified sections?" OK, dumb idea. But as Merritt notes, "He and his editors were speaking different languages." Apparently both decided to continue doing so.

I don't know. Maybe they did ask those things. Maybe they asked Tony a-hundred-times-better things.

But I get the feeling that what they said was: Tony, you should be more troubled about the threats to Freedom of Information. You should be more troubled by what your cuts are doing to our ability to cover the news. You should not talk business to us. You should talk about statehouse coverage. They did not seem to believe that catastrophe lay ahead, and even if it did, journalism was a Public Good and it was the obligation of publishers to support it. KR was the gold standard of journalism and it was not the job of editors to figure out how to persuade readers and advertisers to part with their money. The bills just would have to get paid. Ridder, for his myriad faults, saw catastrophe ahead, saw it before most industry CEOs. I may be overstating Merritt's personal views here, certainly, but these are not views it was difficult to find in Knight Ridder.

Tony Ridder, when asked to defend his call for higher profits, would say: Knight Ridder has a lower profit margin when compared with Gannett, Tribune, and other peer companies. We have no second class of stock like the New York Times. If we do not produce the margins demanded by investors, they will break up or sell Knight Ridder. Do you want to work for a company like Gannett, one that cares about nothing except its financial performance? he would ask. I don't want to, he would add. Last week's Gannassacre once again showed Tony Ridder to be right.

Tony always tried to have everything both ways, and thus he failed. But he was correct that Knight Ridder would be broken up by investors wanting higher returns. And what they really wanted was to gut the Philadelphia operation, which accounted for one of every five KR dollars and about which KR alternated almost daily between admiring and evicerating. To some extent, Tony blamed the failure of KR on the failure of the Philadelphia Inquirer to "conquer" the suburbs. Editors at the Inquirer would respond that Tony did not give them enough money to do it. But I remember the comment of a KR executive to a top Inquirer editor about a zoning plan: We wanted a Chevrolet, and you gave us a Cadillac. They compromised on a Buick, which they could then not raise enough money to run, so they just junked the whole thing. Different languages.

There's never been enough money for journalism, and until the late 1970s and early 1980s it wasn't even close. Then, for a brief period, there was lots of money -- in a few places almost more than you could spend. Newsroom workers blame owners for keeping profit margins high and not investing in news. But profit margins were the only thing publishers had going for them to attract investment. Circulation was declining in real and relative terms; ad revenue was being pushed up by annual rate increases more than actual growth in business. Old retailers were dying and new retailers were not taking out ad contracts. Young people were less and less interested every year. The only card newspapers had left was that they controlled a unique pipeline and could charge monopoly rates. Online may be killing newspapers, but they were already beginning to stagger before the first browser clicked on the World Wide Web.

As readers clamored for more local news, editors engaged in lengthy debates about the meaning of local news, usually ending up with how what they wanted to cover was local. (If it happens in Zimbabwe and could affect you, it's local news.) Readers said they didn't have time to read the paper, and editors added space and stories got longer. Readers said stories took too long to get to the point, and writers crafted anecdotal ledes. Readers asked for news of their community, and one West Coast metro decided to regularly cover a neighborhood in Manhattan. Readers said the ink rubbed off on their hands, and we told them to wear gloves while reading the paper. And, of course, there are jumps and throwing the paper in the street.

What Buzz Merritt writes is in the greatest traditions of the Knight Ridder journalistic principles I worked under for years. It is a high-minded view of journalism's good to society based on a love for the trade and for democracy. It is what we all admire about journalism. It also is based on other people -- publishers, advertisers, whoever -- underwriting a civic good because they made money off it. That enabled a class of creative people, who as they became more professional and educated came to see the desires of readers as conflicting with the great work that needed doing. When the crisis came, each group had little to offer the other.

A county near us is divided between middle- to upper-middle suburbs and a bunch of depressed factory towns. Almost no one read our paper in the factory towns; they read the local daily. We had a big readership in the newer suburbs. We covered almost nothing that happened in those towns. We gave huge amounts of space to political pissing matches in the blue-collar cities. We did so because there was conflict, or there was a racial angle, or there was corruption. Most of our advertisers did not seek new customers in those towns. Wrong zip codes. Our coverage did not get us new readers in those towns anyway. There were major injustices, such as the disproportionate siting of waste facilities in the poorest city. There was a publicity-hound mayor who pulled stunts. There were great stories. We did not want to be red-lining news. Our reporters did not want to write routine stories about sewer bonds. People don't get murdered often in upper-income suburbs. The view was that the poor need the newspaper to address their issues; the richer can take care of their own issues themselves. It was good public-interest journalism. As a business, it brought us nothing except the ability to be ignored by people who wanted to read the paper and whom our advertisers wanted to market to. They said we published nothing about their lives and concerns. It was a wonderful time to be a journalist.


strongpoint said...

great post, but foreseeing the classifieds issue runs way deeper than that -- marshall mcluhan wrote in "understanding media" (1964):

"the classified ads (and stock-market quotations) are the bedrock of the press. should an alternative source of easy access to such diverse daiily information be found, the press will fold."

he should have added box scores, but no one had invented fantasy sports yet.

Anonymous said...

Paul writes,

No mention of blowing off a good half of the readers, known as Conservatives.

Smart, real smart.

Anonymous said...

"It is a high-minded view of journalism's good to society "

An undeserved air that the general public rightly perceives to be "narcissistic arrogance".

Anonymous said...

I think this is a brilliant analysis. Dead on.

Anonymous said...

Tony's prescience about Craigslist never seemed to spur him to do anything about it. The Mercury News and Knight Ridder web sites were, and remained, stodgy and slow -- no competition at all for the online crowd. And when the institutional investors put on the pressure, Tony folded. He had the option, after all, of just saying no, and then seeing what happened; instead, he said yessir, right away sir, and within a year -- no, less -- KR was gone. Tony may have been smart, but he was inept, at a time when savvy and skill were at a premium. So we all paid.

Anonymous said...

"free online classifieds have done more to weaken daily journalism than any government, any malicious department-store owner, any lazy proprietor, could ever have done."

You can't stop technology. It should have been apparent that a business model shift was, and still is needed.

What the quote above tells me most is that the content that Tony Ridder's papers produce is valueless.

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