Wednesday, December 24, 2008

Happy Holidays

The correspondent at ItsFourthAndLong bids you peace this holiday season. He returns the week of January 5, 2009.

Tuesday, December 23, 2008

Moving the holidays


If you’re Jewish, let’s face it, you’ve got it a tad easier. If you don’t take care of someone tonight, you’ve got five more nights in which to make it up to a loved one or whoever else is on your gift list.

Christmas and Hanukah suffer from Thanksgiving’s proximity. They fall too close to Turkey Day and, as a result, they’re the leading causes of stress, anxiety and depression in December.

Thanksgiving is the best holiday. You eat, drink and make merry – all without having to worry about buying someone a gift that requires an emotional touch point.

If your hosts hate the wine or the center piece you offered, that’s nothing. These gifts didn’t break your checking account and, emotionally speaking, they’re inconsequential.

But Christmas and Hanukah, they’re different stories. They demand your best gift giving efforts. Heaven forbid you should fail to buy that special someone anything other than that very gift that perfectly suits them.

At our house, every Christmas presents a gift giving conundrum. What to buy for whom? Our kids are easy; the kids of relatives and friends are somewhat easy; friends we buy for are easy. Our mothers are easy. Our fathers, men who have every toy they ever wanted, present difficulties. We’re never sure what to do for them.

In addition, this year’s short time frame between Christmas and Thanksgiving has presented numerous scheduling difficulties. A number of gifts will be late. I explained this to a dear friend who reminded me, because she’s always been wise beyond her years, that Christmas is a season, not a day. While a wonderful idea that works in some circles, it doesn’t cut it with our culture. Christmas remains a day!

So because these holidays demand our best efforts, we should reschedule them to a month that’s truly awful, January. Christmas and Hanukah in January would make the month so much more palatable. And once the celebrations are over, it’ll be nearly February, when spring’s just around the corner.

Is there a religious problem here? Not really.

The history of Christianity is a history of competition. One can’t just start up a new religion without figuring out ways to compete and, at times, collude with society’s domineering culture.

No one really knows when Jesus was born; stories suggest his birth was either in the summer or fall but it remains a mystery. The only thing that appears to be certain is His death, at around Passover, or sometime in either March or April.

The leading reason that Jesus’ birth is celebrated in December is because that’s when an event was celebrated during the days of the Roman Empire, Winter Solstice. In fact, green is a Christmas color because the Romans decorated with it to celebrate the pending arrival of spring.

Scholarly reports suggest that early Christians celebrated Jesus’ birth in December for two reasons: 1) so they would have something to celebrate while everyone else was marking the arrival of longer days; 2) to offer up a completely different celebration or, in other words, to compete against Winter Solstice.

So, religiously speaking, there’s nothing stopping us from moving Christmas to January 25th. If anything, it’ll give retailers, those gauges of economic health, double the time to score sales as opposed to the usual four to five weeks after Thanksgiving.

Since Hanukah is now competing with Christmas or vice-versa – take your pick – it should go along with this modest proposal and move to January as well. Religiously speaking, Hanukah can’t move as easily as Christmas can but, in the name of competition, I say, make the move. It’s stronger closer to Christmas than it is farther away.

Everybody wins here: People have more time to shop. Department stores, boutiques and others selling gifts have a longer lead time in which to make their sales figures and consumers breathe a sigh of relief.

If we implement this plan, we’ll still have New Year’s as usual. Even that song, “We Wish You a Merry Christmas and Happy New Year,” while suffering from chronology problems, still works. Let’s face it, you don’t want to sing, “We wish you a Happy New Year and a Merry Christmas.” Although depending on where you are on the sobriety chart on December 31st, maybe you do.

What about the clergy? Will they like this idea? I’m not sure but their objections can be met this way: The holidays’ meanings are more important to celebrate than the exact days on which the events actually happened.

Who’s with me?


Encyclopedia of Religion. New York: Thomson Gale, 2005

Encyclopedia of religious rites, rituals and festivals. Frank A. Salamone, editor. New York: Routledge, 2004

Friday, December 19, 2008

The Morning Routine

Most mornings are the same: I’m out of bed at 4:20 a.m., putting on my exercise clothes before heading over to the local YMCA to complete my “macho” workout in about an hour. I figure the time spent running on a treadmill, lifting weights and doing those god-awful abdominal crunches will keep mortality at bay, allow me to eat and drink to my heart’s content, and see my children well into their adult years.

After completing my exercises, it’s off to a nearby convenience store to purchase a copy of The New York Times before returning home to take my wife to the train station. (In case you’re curious, The Chicago Tribune, The Daily Herald and The Wall Street Journal are home delivered.) Our sons usually join us for this ride and receive mom’s usual admonitions, which include behaving like the well-mannered boys they’re expected to be. Once at the station, she hugs them, telling them how much they’re loved.

Back home – it’s not even 7 a.m. yet – the boys eat breakfast while I tend to shaving, showering and dressing. An hour later, the kids are dressed, their teeth are brushed, and we’re out the door again. The younger son, attending a junior kindergarten program, is the first to be dropped off.

I take him into his classroom, get him peed and his hands washed before giving him lots of hugs and kisses, telling him he’s great and loved. Once out of the building, I turn to his classroom window, wave good-bye and blow a few kisses his way. From what I understand, it eases his transition to his teachers’ care and provides the impetus he needs to start playing with his classmates

The older one, now a first grader, and I soon find ourselves sitting in a coffee shop, working on his reading skills. This lasts for about 45 minutes and gives him just enough time to read about 10 pages of a book he checked out from the school library. This exercise usually involves further memorization of words he already knows and expanding his vocabulary by sounding out words that are new to him.

This daily habit can be fraught with frustration. In the beginning, there were days he refused to read. So instead of becoming angry, I took a different approach. “We’re not doing this for my benefit,” I told him. “We’re doing this for yours. If you want to learn how to read, you better start reading this book.”

That message worked and, in the 10 weeks we’ve been at this exercise, I’ve seen dramatic improvements in his reading skills. Not only that, but his confidence and enthusiasm for reading show through so much so that he enjoys showing off new words he can read. It’s especially exciting if it’s a compound word.

Our time with one another also gives me a chance to pick up new details about his young life and answer his questions, which lately have included inquiries about people’s gaits, wishing wells (the restaurant has one, sort of), election results, football and whatever else happens to be on his mind.

Like all the parents who’ve preceded me and those who will succeed me, I begin to realize the limits of my influence. Our elder son, only six, is clearly growing up and doesn’t need us like he used to. He will experience many of life’s trials and tribulations without our interpretation. Not that we’re shy about expressing our opinions to him but we also know he needs to experience life sometimes without the benefit of our experience. Because if he doesn’t, he may never become the well-adjusted, self-sufficient adult he needs to be.

This is a difficult moment for any concerned parent: It’s that time when you realize that your once little, helpless, bundle of joy, who can now walk, talk and think on their own, is working as hard to be as independent from you as you once did from your own parents. It’s that alarming moment, a day of reckoning if you will, when you realize you now understand all the concerns and worries your parents once had for you – and may still have in spite of the many years you’ve been alive.

Before long, we’ve left the coffee shop and find ourselves at school. Given the weather, I, along with all of the other parents, pull up as close as possible to the entrance so he has a short walk into the building. I get out the van, help him with his backpack and give him two bags, one filled with snow-pants, the other with boots. He always seems overloaded.

Before he leaves my presence, I tell him I love him, how smart he is, and to learn a lot in school. He says good-bye, turns around and waddles toward the door. I usually remain standing next to the van, until I see he’s safely inside the building. Call me overprotective. I’ll plead guilty to the charge.

As he’s making his way toward the door, his pace quickens and this look of confidence comes across his face. He’s ready for whatever challenge awaits him. All at once, I’m overwhelmed with a deep sense of pride and a longing for days since past. I’m suddenly jolted into realizing that our little Buckaroo is growing up faster than I prefer. And the same thing happens every morning – tears fill my eyes.

Monday, December 08, 2008

My experiences with Chapter 11 Bankruptcy

Debtor in Possession are three words you never want to see on your paycheck. But if you’re a Tribune Company employee, those are words you’ll soon see emblazoned across your paycheck. It’s warning to the banks: The company you work for is in Chapter 11Bankruptcy.

It also tells the banks that the check is good because, should it bounce, the check issuer, in this case Tribune Company, very likely risks going into Chapter 7 Bankruptcy, which involves closing up shop and liquidating whatever assets remain. And if there’s anything Sam Zell and his bankers probably don’t want right now, it’s a Chapter 7 filing.

I still remember those three words being on every check United Press International issued. It gave every bank cashier and/or clerk I dealt with some pause before cashing a check that had been issued to me by the company.

I experienced Chapter 11 more than 20 years ago when I worked for UPI. It was one of the most turbulent experiences in my professional career. In Chapter 11, you soon learn that there are no sacred cows and that everyone is dispensable.

In UPI’s case, the revenue stream, shrinking as it was, could no longer keep up with the company’s cost structure. If UPI’s management wanted the company to continue, it needed to borrow money. But to do so, the banks wanted to protect the money they were lending. As a result, UPI filed for Chapter 11, where it remained for about 18 months until it was purchased by a newspaper publisher from Mexico, Mario Vazquez-Rana.

Mr. Zell can say what he wants about being in firm control of Tribune, but the fact is the banks, especially J.P. Morgan Chase, are running the show. They may not have their own people sitting in the executives suite today, but they’ll be there soon. And they’ll start appointing their own people into Tribune’s management. People they can trust.

The same thing happened at UPI. Suddenly people with no experience in the media business, but plenty on Wall Street, wound up in charge. Each of them had to come up to speed on the company – its nuances, history and competition, employees and clients – so they understood the situation they faced. Some were successful at this; others were complete disasters.

The bankers have one mission – get paid. Mr. Zell can say he wants to keep the company intact, but that’s the bankers’ last and least concern. They want their money – and they’ll do what they need to do to get it, especially given today’s economic and financial climate.

I count my lucky stars (if I can use that phrase) that I experienced this when I was months shy of my 23rd birthday. The many UPI people who were older than me, laden with kids, college payments and mortgages, didn’t always hold up so well. Some left UPI for greener pastures. Some divorced; and some just hunkered down and did their job.

Chapter 11 is exhausting. It challenges you mentally – how do you look out for Number 1; pay your bills; handle your unpaid expense account; make the business you run work; keep people motivated; handle a spouse’s and/or family members (nagging) questions; plan for the future – and it’s also physically challenging. You feel beat up and, at times, powerless and helpless.

It can also bring about a gallows humor. At UPI, in Dallas, where I worked when the company entered into Chapter 11, a bank, right next to our office, where many of us had checking accounts, stopped honoring our paychecks. They told us we had to wait three to five days for the checks to clear before we could access the money. You can imagine the uproar that created.

So one of my colleagues, Dan Dalton, suggested we rent a school bus, pick up the homeless around Dallas, give each of them UPI credentials and then send them into the bank, telling them that the bank was holding a party in their honor. That would show the bastards, said Dan.

Tragically, we didn’t follow up on that idea. Reflecting back on that day now, we should have. It would have been fun.

My biggest challenge, at the time, was paying $1,500.00 in charges I’d racked up on my American Express card, which I’d used on the many sales trips I’d made. I still remember talking to some nice man at American Express, explaining that I couldn’t pay the bill. I later borrowed money from my dad so I could pay the tab.

And, as I recall, I bounced one or two rent checks as a result of UPI’s Chapter 11 filing because there were some problems with payroll.

Hopefully, the many things I went through at UPI will not happen to Tribune employees.

I feel awful for the many talented professionals working at Tribune who now have to deal with this. Sam Zell won’t suffer. But the many employees who’ve staked their lives and careers on Tribune will likely find that they’re bearing the brunt of this situation. That’s what makes it completely unfair.

Chapter 11 bankruptcy for Tribune?

The Wall Street Journal reports today that Chicago-based Tribune Company, owner of the Chicago Tribune and the Los Angeles Times, six other daily newspapers, a number of television stations, plus the Chicago Cubs baseball team, may seek Chapter 11 Bankruptcy protection.

What’s surprising is the Lazard, which is also handling the sale of the Chicago Sun-Times and Sun-Times Holdings, has apparently, according to the Journal, been retained to find a buyer for the assets of the Tribune Company, if not the entire company itself.

It begs the question whether Lazard has a conflict of interest because they’re working for two companies that compete with one another in Chicago.

Tribune Company went private about a year ago when real estate mogul Sam Zell purchased the company. The tragedy, however, is that instead of having the money to outright buy the company, he put it into debt, to about the tune of $13 billion.

Given the size of the company, most days a debt of that size might have been easy to handle. But before the deal was even closed, Zell’s bankers were concerned about the deal because Tribune’s revenue stream was declining.

There are no asset sales on the horizon for Tribune Company – which kept the bankers at bay – so, as the Journal reports:

“The company's cash flow may not be enough to cover nearly $1 billion in interest payments due this year, and Tribune owes a $512 million debt payment in June.

”One of Tribune's most pressing concerns: The company is likely to be in violation of debt terms that limit borrowings at the end of the year to nine times its adjusted profits. The ratio stood at 8.3 at the end of the second quarter, before Tribune reported an 83% decline in operating profit for the three months ended Sept 28.”

It was reported about two months ago that the Cubs, coming off of a good season, plus an appearance (albeit brief) in the playoffs, could command a price in the $800 million range. If Tribune Company goes Chapter 11, it’s difficult to say if such a reported price would hold up.

In addition, two years ago, David Geffen, significant player in Hollywood, was offering $2 billion for the Los Angeles Times. Here, again, if Tribune goes Chapter 11, it’s questionable if that price will hold. (Even if Tribune wasn’t seeking Chapter 11 protection, it’s hard to say if, given the state of the U.S. newspaper industry, that price would hold up today.)

McClatchy, based in Sacramento, owner of a number of daily newspapers, recently restructured its debt terms. Tribune may be able to do the same and avoid Chapter 11.

Sunday, December 07, 2008

Papers missing in action as technologies develop

MIAMI — For Gloria Formosa, one of this city’s leading stock brokers, it’s an
absolute necessity she remain informed about the day’s news headlines.

Entrusted with millions of dollars of her clients’ money, she and her customers
know that an uninformed broker can make investment mistakes that can result
in costly — even ruinous — mistakes.

That’s why, shortly after Formosa wakes up and starts her morning routine, she
suddenly becomes aware of the day’s top news stories. What’s more, she does this
without using a Web site, turning on her BlackBerry, listening to the radio, watching
television or even reading a printed copy of her local paper, El Herald.

Earlier this year, Formosa, 45, did something a lot of women her age might not be expected to do: She had herself injected with nanobots, microscopic-size robots programmed to receive and deliver Bloomberg News Service headlines and
stories, stock and commodity prices — 24/7 — directly to her brain.

By the time she’s dressed, Formosa has a good idea of how the markets will perform
that day.

“I’m always updated,” she said. “With nanobots, I’m never caught off guard by
some event that could affect my clients’ investments. I’m way ahead of the game!”

In addition to being used to treat heart ailments, correct blood pressure and monitor
diabetes, nanobots are now employed by some news services, like Bloomberg and
Thomson Reuters, as a means of keeping their audiences informed throughout the day. There’s a chance, their executives say, that nanobots could even replace their
Web sites.

— The Wall Street Journal, “Invasion of the Nanobots: One Broker’s Attempt to
Stay Informed,” Sept. 3, 2032

While this scenario might seem like something out of a science fiction novel, there’s a better than even chance it just might happen. Nanotechnology is already in use, and nanobots — microscopic-size robots — will soon be employed to help people fight diseases, expand their minds and, perhaps, update them about the news.

Indeed, a host of recent technological developments, which include flexible display,’s Kindle, The Plastic Logic reader and nanotechnology, should force the daily newspaper industry to start answering a tough question: What will society look like a generation from now?

Consider the U.S. Army’s Army After Next program. Created after the first Iraqi War, this program was designed to help the Army determine how to defeat threats it might encounter in 30 years. Now called Unified Quest, the program today encompasses all military branches, intelligence agencies, the State and Treasury departments, and academics in cultural anthropology. The goal remains the same: formulating possible
solutions to the threats, wars and battles the United States may encounter a generation from now.

“These guys make your head hurt when discussing future scenarios,” said Harvey Perritt, a spokesman for the Army’s Training & Doctrine Command Headquarters in Norfolk, Va. “Even NASA shows up at these meetings, laying out how space might play a
role in any future scenario.”

Similar approach

The daily newspaper industry should undertake a similar intellectual exercise,
exploring how it will operate 30 years from now. The technology that’s on the
immediate horizon will further modify how consumers view newspapers. As a result, newspaper publishers must determine how it will own the future and remain competitive in an even more technologically advanced setting.

A sampling of what’s on the horizon:

•The Flexible Display Center, at Arizona State University, is developing, in
conjunction with the Army, technology that will spawn a variety of new products
including laptops with foldable screens. The Army funds the Center because it
plans to equip soldiers with PDAs, laptops and maps using this technology.

“Flexible display glass is rugged, lightweight, bendable and roll-able,” said Greg Raupp, the Center’s director. “It brings a new ball game of whole new products.”

The Center’s annual budget is about $14 million, with about $10 million coming from the Army and the remaining $4 million coming from industry sources and the university. As of now, though, there isn’t a single newspaper or media company sponsoring the Center.

Raupp said a newspaper company could sponsor the Center for a minimum of $50,000 annually to reap some benefits from the research. The cash outlay can be reduced if a newspaper can provide other value to Center projects, Raupp said.

•, attempting to sell more books in this digital age, is selling the Kindle, a handheld, wireless reader that downloads books, magazines and 17 different newspapers, among them The New York Times.

While Amazon says newspapers are a key Kindle partner, the Webtailer’s primary goal is to sell more books. The Kindle offers consumers a new reading and buying experience of print media. While it’s difficult to say how well Kindle sales are doing — Amazon refuses to release those numbers — devices like it will become more popular.

•Plastic Logic, a Mountain View, Calif., firm, last month demonstrated its flexible e-newspaper reader. The Plastic Logic Reader offers users a larger screen than the handheld, wireless reader from The Plastic Logic device — which goes on sale next June — is built with proprietary flexible display technology. The whole screen is active; there are no buttons.

Plastic Logic is talking to newspaper publishers about making their content available on their new, wireless reader, according to Vice President of Marketing Joe Eschbach.

“We’re ideally suited for newspaper content because the formats of newspapers are respected along with their branding and we can support their advertising.” He said the Reader “will be priced for massive adoption — quickly.”

Looking ahead

Author, futurist and inventor Ray Kurzweil says that 21st century technology will focus on “making things smaller.” In an essay published in the book Invisible Future: The Seamless Integration of Technology into Everyday Life, Kurzweil said that nanobot technology “will be feasible within 30 years.”

“Nanobot technology will … expand our minds in any imaginable way,” wrote Kurzweil. “Brain implants based on … nanobots will ultimately expand our memories a trillionfold … and since the nanobots are communicating with each other over a wireless area network, they can create … new hybrid biological-nonbiological networks,” Kurzweil said.

Army spokesman Perritt says nanotechnology is already employed by troops in Iraq and Afghanistan so they can see around corners before risking a fatal turn.

Unfortunately, just as with the development of the Internet, not a single newspaper is helping direct the course of these new technologies. The way newspapers will be consumed and perceived, by readers and advertisers, a generation from now is being determined with no input from newspapers.

The question the daily newspaper industry needs to answer is this: Will it catch up, join, lead or be left behind as this technology becomes reality? Will the newspaper industry own its future or will it repeat its current behavior — massive layoffs and continued downsizing of its printed product — just as it has reacted to the competition it’s experiencing from the Internet?

Consider options

Kurzweil says the world will experience 20,000 years of progress in the 21st century. The newspaper industry must start determining its future — today.

Consider this warning from Marshall McLuhan in his book, Understanding Media: The Extensions of Man: “The classified ads (and stock market quotations) are the bedrock of the press. Should an alternative source of easy access to such diverse daily information be found, the press will fold.”

That book was published in 1964.

Imagine, the newspaper industry might be a thriving business today if it had taken the time 44 years ago to consider all of the possible future threats — no matter how far-fetched — to a key revenue stream.

What will the daily newspaper industry look like in 44 years? Maybe the nanobot knows.

Editor's Note: This article, written by the correspondent to this blog, first appeared in the October 2008 edition of Newspapers & Technology magazine.

Wednesday, December 03, 2008

CNN & The Associated Press -- Celebrity Death Match?

The announcement that CNN would start selling its own branded news wire service reminded me of the time, about 11 years ago, when I suggested that Tribune Media Services, my employer at the time, start selling the network’s Web content.

It was clear then, as it is now, that CNN had stopped being just a broadcaster. It was also in the print business. And, through its Web site, it demonstrated that it was a viable competitor to The Associated Press, Reuters and other traditional wire services, at least on national and international stories.

As a former Unipresser, (ex-United Press International employee for those of you not familiar with the lingo and the AP’s largest competitor until about twenty years ago), I’m the first to say that the AP is a tough rival. It’ll do whatever is necessary, including price cutting, to keep its clients, called “members” by the AP, in line.

So if CNN’s Jim Walton, president of CNN Worldwide, which will lead this undertaking, is having thoughts that his company will replace the AP, which possesses a near monopoly position with U.S. daily newspapers, his thoughts are delusional. The AP’s value doesn’t come from the stories it files from Washington, top cities around the country or even from various international datelines. It comes from the state reports.

If CNN wants to outright replace the AP, they’ll likely have to do what they thought they’d never do – provide a credible state report in all 50 states. That takes a lot of bodies, a lot of bureaus and, last but not least, a lot of money.

AP state reports are concocted through a combination of the wire service’s own reporters (if they can bother to get off their collective duffs to cover a story) and whatever their “members” contribute to the local, statewide AP report.

That’s right. The newspapers buying the AP service are required, by their contract with the news service, to also provide stories and pictures, produced by their own staff. That’s why the AP calls their clients “members” – not “clients.”

There’s a world of difference in the terms. A “member” is someone who shares an organization’s burden while a “client” is someone who pays for a service and, rightfully so, expects a decent product and decent, if not outstanding, customer service in return. At the AP, both of those things are, like, so yesterday, which is one of the reasons there’s no such thing as a satisfied AP customer or member, if you prefer.

This is one of the reasons that The Times story on Monday focused on The Columbus Dispatch, one of the largest daily newspapers in Ohio. The Dispatch, along with a few other newspapers in the Buckeye State, is working hard to drop the AP. The Dispatch and a few other newspapers regularly share their stories with one another. There’s a chance that The Dispatch and its group of rogue newspapers (as the AP sees them) will be able to provide one another with enough statewide coverage that they’ll able to drop the AP all together; at The Dispatch, this means a tidy annual savings, somewhere in the $800,000 range, according to The Times.

The national and international report that the AP provides can be easily replaced – for a lot less money – by purchasing other supplemental news services, including the Gannett News Service, the McClatchy-Tribune News Service, the Los Angeles Times-Washington Post News Service, The New York Times News Service and, perhaps, even Reuters.

Newspaper editors are frustrated, if not intensely angry, at the AP. The problem is that the AP business model – extortionary pricing for no or damn little customer service in return and a state report that’s as good as what the “members” contribute because the AP can’t be bothered to do much original reporting – is finally obsolete. At least that’s the appearance of the situation right now.

What gives me pause here is that the Dispatch’s attempt to form its own news cooperative is eerily similar to how this problem came about. One hundred and sixty years ago, a group of 10 men representing New York City’s top six newspapers formed a news agency. They named it The Associated Press.

So what The Dispatch and some of its fellow Ohio newspapers are doing is nothing new. The question is can they do a better job of providing what the AP has done for more than a century.

The AP’s problems are larger than Monday’s New York Times story let on. In addition to the new competitive threat from CNN, their tribulations include Tribune Company, owner of the Chicago Tribune, the Los Angeles Times, The Hartford Courant, The Orlando Sentinel and the South Florida Sun-Sentinel, to name a few, which cancelled its AP contract. (It’ll take two years for Tribune to drop the AP service.) Other newspapers, sources tell me, have, in some cases, stopped paying their AP bill.

What’s playing out here involves two issues: 1. The economics of the newspaper industry, which are declining faster than anyone had ever anticipated, and 2) decisions made by both UPI and the newspaper industry about thirty years ago, which only exacerbated the AP’s already over-inflated sense of self worth.

The newspaper industry is primarily a print medium. And though revenues to its Web sites are increasing, they still don’t match what they bring in on the print side. In addition, the industry’s audience is fleeing the print product for the free one on the Web. This is because the industry has never figured out how to create value for the fantastic service, in some cases but not all, it provides through its printed editions.

The revenue decrease is forcing industry executives to make difficult calls. They include eliminating jobs, sections, areas where they previously sold copies, and outsourcing certain job functions; editors are dropping features and, as has been seen, seriously considering dropping their largest news content supplier, the AP.

UPI’s problems started back in the 1950s, when its forerunner, the United Press, merged with the Hearst-owned International News Service to form UPI. UP’s owner, the EW Scripps Company, named Scripps-Howard at the time, forced the new organization to give up the United Features Service, (later renamed United Media) which provides comics, columns and puzzles to newspapers. That meant that a large and very significant portion of the UP revenue stream was not transferred to the newly formed UPI. This meant that UPI’s future was based on a general news and picture service for newspapers and a broadcast wire and audio service for broadcasters.

UPI’s primary client base had been afternoon newspapers. As those papers stopped publishing in the 1960s and 1970s, the revenues at UPI declined. Some of the revenue loss was made up by selling the service to morning newspapers as well as to broadcasters, including CNN. Still the revenue slide couldn’t be stopped and the company lost money.

In addition, UPI’s owner couldn’t be bothered to invest in the service. A number of initiatives were brought to the attention of the UPI’s owner, but EW Scripps executives couldn’t be bothered to act on them, or, in some cases, even hear them out.

The last serious push to save UPI was done in the late 1970s, when the company attempted to sell a limited partnership to U.S. newspaper companies. Working against the plan was UPI’s owner, which insisted that it remain the largest shareholder and refused to give any of the limited partners much of say about UPI’s direction.

There was a Canadian newspaper publisher who was more than willing to sign up for the same deal that had been tabled to U.S. daily newspaper executives, but the forward-thinking EW Scripps executives rejected the overture because that would mean foreign ownership of a U.S. news service.

In addition, the level of UPI’s news gathering began to fall and, as a result, a number of editors felt they were better served signing up for the higher priced AP instead of paying for the cheaper service at UPI. A number of UPI sales executives, including yours truly, told newspaper editors they didn’t want to make the AP their only content provider.

Some editors continued with UPI, in spite of their reservations; some dropped UPI because they were tired of dealing with all of UPI’s problems (which were numerous), and others dropped UPI because they had delusions of grandeur, which included becoming part of the AP Board. The end result – AP was sitting in the driver’s seat.

CNN will face some of the same issues that UPI did. CNN is a profit center for a publicly held company, Time Warner, and its actions are dictated by one thing – the Almighty Profit Margin. CNN can afford to launch this service now because it’s flush with revenues; they always surge during national political campaigns – or any news event that gets people to tune in or head to their Web site. CNN, like UPI, will have to provide a strong value proposition for any editor to consider buying the service. CNN will run into all kinds of resistance from newspaper editors, including some who simply cannot imagine life without the AP at their paper.

In addition, the AP is a non-profit. Because it’s under no obligation to make money, the AP will slash and burn their rate card to prevent their membership base from eroding.

One of the questions that newspaper executives will need answered is what the CNN wire will look like during times of relative peace and quiet. While that day might seem hard to imagine right now, it will happen. Will CNN be able to provide the same level of service then that it can provide today, when revenues are healthy?

While a part of me very much likes the idea of CNN fighting the good fight against the AP, another part of me says this is much ado about nothing. The newspaper industry is filled with intransigence, which prevents it from taking the actions it needs to take to remain a healthy, viable industry. Newspaper executives will sing CNN’s praises publicly, but whether they’ll actually sign contracts for the network’s news wire is an entirely different matter.

So Mr. Walton, if I have any advice for you, it’s this: Keep your expectations modest.


Deadline Every Minute: The Story of the United Press, Joe Alex Morris. New York: Doubleday and Company, 1957.

The Associated Press: The Story of News, Oliver Gamling. New York: Farrar and Rinehart, 1940.

United Press International: Covering the 20th Century, Richard M. Harnett and Billy G. Ferguson. Golden, Colorado: Fulcrum Publishing, 2003.

"CNN Pitches Wire Service To Compete With The A.P.," The New York Times, Tim Arango and Richard Perez-Pena, December 1, 2008, pp. B3.

Monday, December 01, 2008

Does Dean Singleton read this blog?

I have no idea. But given his latest pronouncements about potential cost-cutting moves, it appears the chief executive officer of Denver-based Media News, owner of more than 50 daily American newspapers, is very much taking direction from a piece I posted on this blog more than 20 months ago.

In it, I suggested that newspaper companies would outsource editing functions to a company in Vietnam. This was part of a fictional account (maybe not so fictional after all) of what happened the day the last U.S. daily newspaper, The Shenandoah Valley News, located in southwestern Iowa, stopped producing a printed edition. (Yes, the newspaper really does exist – at least as of this writing.)

The tragedy of Mr. Singleton’s pronouncement, as reported in yesterday’s New York Times by Maureen Dowd, is that it will likely come true. There have already been reports about newspapers in California attempting to outsource not only editing functions – but also reporting functions – to companies located outside of the United States.

The Chicago Tribune, about two years ago, led some of this outsourcing initiative, when it farmed out its call center – the people who answer the phone if you call to complain about your newspaper delivery, cancel your subscription or put the paper on hold while on vacation – to a company based in the Philippines. Now when you call about your subscription, someone in Manila answers the phone.

It doesn’t take too much of an imagination to consider that, as Mr. Singleton sees it, his newspapers reporters, after writing their stories, would send them via e-mail to a copyeditor on the other side of the globe, who would simply look for grammatical errors.

With any luck, before the story is printed, there will be someone back at the local newspaper to question the reporter about their sources, put the story into context and add anything that might be missing to the article. Given Mr. Singleton’s plans, and his previous behavior, which includes the ability to squeeze out every last penny out of every newspaper he owns, don’t count on it.

It wouldn’t be surprising if the company providing this editing service was found in India. Given that India is home to call centers as well as jobs requiring a high-end skill set, it’s not too much of a stretch to believe that the former British colony might very well provide the employees editing English-language newspapers, including those in the United States.

Besides being cheaper, one of the reasons that India is home to jobs that require service skills as opposed to manual labor is because they once hosted a professor from the Massachusetts Institute of Technology, Dr. Norbert Wiener. This scientist, who assisted in the birth of the Information Age, and much of the technology we take for granted today, including cyberspace, told India’s top leaders to concentrate the country’s economic development on high-tech jobs – not manufacturing ones – about 50 years ago. Not only did India listen to Dr. Wiener, they acted on his advice.

(For more on Dr. Wiener, either buy or check out of your local library a recent biography of him, entitled Dark Hero of the Information Age: In Search of Norbert Wiener, The Father of Cybernetics, by Flo Conway and Jim Siegelman. It’s a great book and well worth your time, especially if you’re curious about the beginnings of the technology that surrounds us today.)

Mr. Singleton’s actions are par for the course in the American newspaper industry. Like the American automotive industry, this is an industry that’s been told numerous times to produce a product that people want to read and advertisers want to buy. And, too often, when it realizes that the audience has slipped away and that advertisers are reducing the amount of money they spend on newspapers to reach consumers, the American newspaper industry looks like a deer caught in the headlights.

Maybe Singleton and his fellow newspaper CEOs will borrow from the playbook of their cohorts in the American automotive industry and make a trip to Washington to beg for a federal bailout!

Singleton’s announcement is one in a long litany of cost-cutting moves. The newspaper industry has yet to provide a plan to restore its financial health. It slashes jobs, reduces the size of its papers, eliminates many of the sections that readers enjoyed, cuts back on the editorial content and then has the audacity to raise its cover price. As thinking goes in the newspaper industry, this passes for strategic planning. Is it any surprise that people who use to pay for a newspaper instead go to its Web site, which is free, read two or three stories and then consider themselves updated on the day’s events? Not at all!

Jim Oberweis owns a local dairy that sells some of the best milk and ice cream I’ve ever tasted. (He’s also a frustrated local politician who can’t seem to run a winning campaign, which is just fine with me. I’d never vote for him.) But if you order home delivery of his milk, it arrives at your doorstep in a case that keeps the milk cold until you place it in your refrigerator. Jim and his team truly show pride in the way their product is handled.

The newspaper industry would be well served to take a hard look at how Oberweis handles home delivery of its milk. If the newspaper industry stopped believing it produces and delivers a cheap, throw away product, it would take the time to deliver its product right to the doorstep – not the end of a driveway, where it’s subject to weather conditions – with the same care that Jim Oberweis delivers milk. This would demonstrate to its readers that the newspaper industry truly produces something to be treasured – not just a piece of trash.