The declining influence of newspaper endorsements, like made worse by increasingly remote, corporate ownership
Morning Brief: Informa offers trading update eight months after the UK publisher acquired the US B2B publisher Penton in a $1.56 billion deal; earnings from DMGT
Yesterday’s Morning Brief ended with these words regarding the attack on the Guardian reporter by Montana House candidate Greg Gianforte: You see this incident probably will not change a thing. Between half and two-thirds of all ballots have already been cast in the Montana race due to early voting. And even though polls showed the race tightening, they didn’t show Quist actually close to winning, but simply outperforming expectations.
And so it came to pass. An attack on the reporter might have the winning candidate a few votes, but it also might have won votes for the guy, as well. It’s America in 2017 and journalism is under attack, whether everyone wants to admit it or not. This remains the biggest danger to the publishing industry today.
Yesterday, The Intercept looked at the Montana race and wondered if the race might be determined by the fact that the three major newspapers in the state are owned by the same publisher, Lee Enterprises. The three papers all endorsed the Republican candidate in the race, but then withdrew their endorsements after the attack on Ben Jacobs of the Guardian.
It is highly unlikely that the newspaper’s endorsements meant much, it certainly didn’t in November when the vast majority of newspapers endorsing Hillary Clinton, with many conservative papers even writing an anti-Trump endorsement editorial.
That Intercept post included a link to the goodbye column from Chris Rush, the publisher of The World (Coos Bay, Oregon). Rush was named publisher of the paper only in 2015, but has decided to step down, complaining that local newspapers just aren’t what they used to be, with business decisions now made from corporate. His paper is one of those, by the way, owned by Lee Enterprises.
“Amid this environment, I’ve become increasingly aware that I just don’t fit in anymore — neither within today’s corporate culture, nor the industry as a whole. I’ve become a dinosaur. So, it’s time for a change.”
Actually, many of us have become dinosaurs, publishing professions that don’t seem to fit in with the industry’s endless need to downsize staff sizes, lower wages, and hirer younger, less experienced personal on the theory that this will encourage younger readers to pick up the newspaper habit.
From my perspective, the real downside is that many of those who have understood for many years that publishing is a collective endeavor, one where balance is important — not editorial balance I’m talking about here, but business balance, where revenue comes in from many sources, where searching for national digital advertising doesn’t mean abandoning local businesses to Google.
Yesterday, Walt Mossberg dropped his last column. It is always a bad thing when experienced, talented professionals leave the business. But Walt is 70 years old, he deserves to move on. I think our industry will miss people like Chris Rush more because what he takes with him is the passion and expertise that made publishing a great industry to work in, and he leaves it well short of retirement age.
The industry’s economic fortunes have changed for the worse since the “great recession” of 2008. Corporate ownership by publicly-traded companies like Gannett, Gatehouse, McClatchy and Lee Enterprises (which owns this newspaper) has become the norm. Independent and family-owned newspapers with deep roots in their local communities are disappearing from the landscape.
At the same time, I have watched the autonomy of the local newspaper being eroded day by day and replaced with central planning from remote corporate offices. More and more decisions about your local newspaper — from its national news and feature content to how much you pay for your subscription — are being determined in boardrooms far away.
Staffing and publication decisions are no longer primarily driven by local market forces, but by the need to satisfy the unrelenting revenue acquisition and expense-cutting demands of Wall Street shareholders.
Two UK publishing firms today reported earnings updates, or as they say, trading updates. You will be able to find the press releases for both under News later this morning.
But I wanted to mention them here.
Informa’s update is interesting as it is comes less than a year after the coming announced that it would be acquiring US B2B Penton in a $1.56 billion deal. Penton as owned by private equity companies private equity firms Wasserstein & Co. and MidOcean Partners which held onto the B2B longer than usual, likely due to the declining value of B2B publishing companies. That deal brought a greater British presence back into the US B2B market, which once was dominated by Reed Elsevier. But RBI basically got out of the B2B magazine business in the US, selling or closing down many of its titles (I worked at the company years ago, and my magazines were part of a large divestment of titles, sold to BNP).
The other company reporting was DMGT (Daily Mail & General Trust), which reported that revenue fell 6 percent, but that “underlying revenue increased 1 percent.” What this actually means is that they are taking out of the results the magazine Euromoney. In December DMGT reduced its stake in the magazine from 67 percent to 49 percent. For the purposes of the trading update, DMGT treated Euromoney as a discontinued operation. Still, operating profits fell.