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|| SportsShooter.com: Member Message Board
Why one former newspaper owner bought his papers back
Michael Fischer, Photographer
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Spencer | Ia | USA | Posted: 5:31 PM on 07.13.09 |
->> A long time friend recently repurchased his newspapers from a media holding company. Gene worked for these guys for a long time. People were surprised that, considering the state of the newspaper industry, he would make the investment.
The Iowa Newspaper Association asked him to write an article on why he would make such a purchase. The response is below.
“Why I Did It”
Some say I’m “bucking the trend” or that I’m a “contrarian”. Maybe I’ve lost my mind or simply made a foolish investment. All this because I decided to step away from corporate life and repurchase the Charles City Press along with the New Hampton Tribune and their associated publications.
What could move me to make such a decision when nearly all financial pundits are proclaiming in a loud and clear voice that newspapers are at best endangered species and at worst just waiting for the post mortem?
To that I impolitely respond, “Horse feathers!” Actually I much prefer a stronger term, but I’m sure you get my drift.
Community newspapers are not yet dead. They need not die at all. The business model of community/local newspapers is still strong and will remain so. What is broken is the capital structure caused by way too much debt; unrealistic profit goals set by private equity owners; operational plans put in place by “Wall Street” analysts whose lack of knowledge and experience in the business is only exceeded by their shortsightedness.
Let’s see if this makes sense.
1. Ten or more times leverage to cash flow.
2. Only spend 1.5% of revenue (or less) on capital items and equipment.
3. Concentrate 90% of all efforts on what generously contributes 2-3% of overall revenue and likely zero profit; i.e., the Internet.
4. Keeping with that theme, let’s put our work up on the World Wide Web for all to see for free… and then wonder why we can’t sell a subscription to save our lives and net paid circulation plummets like a stone.
5. Slash employees to make the “number” even though it means weakening the product nearly to uselessness. Analysts proclaim this plan will make the papers more efficient so it will emerge on the other side of the recession better positioned to be successful. The reality is that this strategy just pushes good talent into other professions never to return.
6. Create a corporate structure that has far more accountants, controllers and bookkeepers than advertising, editorial and circulation staff.
The list goes on and on. I’ve been a corporate officer in a publicly traded media company for more than 15 years and learned a tremendous amount in that capacity. I’ve been to Wall Street meetings, put on “dog and pony” shows for financial sponsors and made presentations to numerous suitors. Here’s the rub: Never was there a meaningful discussion about the product being germane to the community. Never a sentence about putting something back into the product or community.
What has and is ruining American media is that, like even baseball, it came to be run solely as a business. Newspapers are more than a business. They have obligations and responsibilities far beyond what a big box retail store or a widget manufacturer has. Newspapers (the “press") are given special recognition in the Bill of Rights, for Pete’s sake. So what gave Wall Street, private equity sponsors and their kind the license to milk their media properties and turn them into so much pabulum? Big business has corrupted a sacred covenant. Care must be taken with a commodity so central to democracy.
Investors loved our industry just a few short months ago. That is why they paid so much so often to acquire newspapers. At last count only 3 daily newspapers in Iowa were locally owned. Newspapers were very attractive. Now comes the question whether the goose has been killed so the eggs can be served up quicker to insatiable appetites.
Believe me, I am a capitalist. I believe in earning a fair and honest profit. When I sell I, too, naturally want to sell to the highest bidder. Where I differ is that I am coming more to the realization that in order for community papers to be the best they can be they must be locally operated and better yet, locally owned. Market share and profitability will increase when we better serve our customers rather than constantly stripping away essentials for short-term gain to placate a stockholder that doesn’t give two hoots about what we do or the community we serve. Worse is that they may have never cared even before the recession.
I repurchased the paper I sold some 21 years ago because this is my paper in my community and I care. I’m essentially a private owner of a public trust and I feel good about that. Certainly, these communities change every day and not always for the better. But I do not believe they are going away. If I serve my advertisers well in both print and on line; if I reinvest in talent and technology; and if the paper stays as the social and historical register of life in this community then readers will again come to rely on the local newspaper as indispensable. This is true no matter what form the customer chooses to receive the information. It should be true no matter who owns the paper.
Perhaps incredibly, this is the short version. Catch me sometime and I will discuss in greater detail why local ownership still works in newspapers. In the meantime I’m going to work to be a better steward of my community and the newspaper it so richly deserves.
Gene Hall
Owner, Publisher
Charles City Press
“Why I Did It”
Some say I’m “bucking the trend” or that I’m a “contrarian”. Maybe I’ve lost my mind or simply made a foolish investment. All this because I decided to step away from corporate life and repurchase the Charles City Press along with the New Hampton Tribune and their associated publications.
What could move me to make such a decision when nearly all financial pundits are proclaiming in a loud and clear voice that newspapers are at best endangered species and at worst just waiting for the post mortem?
To that I impolitely respond, “Horse feathers!” Actually I much prefer a stronger term, but I’m sure you get my drift.
Community newspapers are not yet dead. They need not die at all. The business model of community/local newspapers is still strong and will remain so. What is broken is the capital structure caused by way too much debt; unrealistic profit goals set by private equity owners; operational plans put in place by “Wall Street” analysts whose lack of knowledge and experience in the business is only exceeded by their shortsightedness.
Let’s see if this makes sense.
1. Ten or more times leverage to cash flow.
2. Only spend 1.5% of revenue (or less) on capital items and equipment.
3. Concentrate 90% of all efforts on what generously contributes 2-3% of overall revenue and likely zero profit; i.e., the Internet.
4. Keeping with that theme, let’s put our work up on the World Wide Web for all to see for free… and then wonder why we can’t sell a subscription to save our lives and net paid circulation plummets like a stone.
5. Slash employees to make the “number” even though it means weakening the product nearly to uselessness. Analysts proclaim this plan will make the papers more efficient so it will emerge on the other side of the recession better positioned to be successful. The reality is that this strategy just pushes good talent into other professions never to return.
6. Create a corporate structure that has far more accountants, controllers and bookkeepers than advertising, editorial and circulation staff.
The list goes on and on. I’ve been a corporate officer in a publicly traded media company for more than 15 years and learned a tremendous amount in that capacity. I’ve been to Wall Street meetings, put on “dog and pony” shows for financial sponsors and made presentations to numerous suitors. Here’s the rub: Never was there a meaningful discussion about the product being germane to the community. Never a sentence about putting something back into the product or community.
What has and is ruining American media is that, like even baseball, it came to be run solely as a business. Newspapers are more than a business. They have obligations and responsibilities far beyond what a big box retail store or a widget manufacturer has. Newspapers (the “press") are given special recognition in the Bill of Rights, for Pete’s sake. So what gave Wall Street, private equity sponsors and their kind the license to milk their media properties and turn them into so much pabulum? Big business has corrupted a sacred covenant. Care must be taken with a commodity so central to democracy.
Investors loved our industry just a few short months ago. That is why they paid so much so often to acquire newspapers. At last count only 3 daily newspapers in Iowa were locally owned. Newspapers were very attractive. Now comes the question whether the goose has been killed so the eggs can be served up quicker to insatiable appetites.
Believe me, I am a capitalist. I believe in earning a fair and honest profit. When I sell I, too, naturally want to sell to the highest bidder. Where I differ is that I am coming more to the realization that in order for community papers to be the best they can be they must be locally operated and better yet, locally owned. Market share and profitability will increase when we better serve our customers rather than constantly stripping away essentials for short-term gain to placate a stockholder that doesn’t give two hoots about what we do or the community we serve. Worse is that they may have never cared even before the recession.
I repurchased the paper I sold some 21 years ago because this is my paper in my community and I care. I’m essentially a private owner of a public trust and I feel good about that. Certainly, these communities change every day and not always for the better. But I do not believe they are going away. If I serve my advertisers well in both print and on line; if I reinvest in talent and technology; and if the paper stays as the social and historical register of life in this community then readers will again come to rely on the local newspaper as indispensable. This is true no matter what form the customer chooses to receive the information. It should be true no matter who owns the paper.
Perhaps incredibly, this is the short version. Catch me sometime and I will discuss in greater detail why local ownership still works in newspapers. In the meantime I’m going to work to be a better steward of my community and the newspaper it so richly deserves.
Gene Hall
Owner, Publisher
Charles City Press
I've always been proud to call Gene my friend; but no more so than when he wrote this. |
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Jeyhoun Allebaugh, Photographer, Assistant
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Brooklyn | NY | | Posted: 5:53 PM on 07.13.09 |
| ->> pretty awesome to see this, I wish him all the luck he needs. |
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Chris Morrison, Photographer, Assistant
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Tucson | AZ | USA | Posted: 6:40 PM on 07.13.09 |
| ->> That's great to hear. Makes me want to subscribe to his newspapers even though I don't live anywhere near Iowa. |
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Marty Price, Photographer
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Concord | NC | USA | Posted: 11:21 PM on 07.13.09 |
| ->> Wow! Let's all hope there are more people that think like him! Thanks for a positive story! |
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Sam Morris, Photographer
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Henderson (Las Vegas) | NV | USA | Posted: 1:04 PM on 07.14.09 |
| ->> Thanks for pointing that out Michael. And tell Gene thanks for buying back my hometown paper (which I also delivered when I was a little bit younger). |
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Mark Loundy, Photo Editor
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San Jose | CA | USA | Posted: 3:19 PM on 07.14.09 |
->> I just wrote Gene Hall the following:
Gene,
Good on you sir!
I've been writing about, discussing and contemplating "new" media for nearly a quarter of a century. I described what is now the iPhone back in the mid 1980s.
I used to be one of those folks who described themselves as having "ink in my veins." But now I don't really care one whit whether newspapers live or die. Since the mid 90s I've been one of those folks out on the front edge of the latest and greatest. What I care about is the newsroom -- the editorial product. How it gets into people's brains is irrelevant.
You and I share the opinion that the stereotypical corporate mindset is strangling journalism. For journalism to flourish, there has to be a throttle on profit expectations. Local ownership is one way of accomplishing that.
But what happens when the "king is dead" and the surviving family members want to cash out? The L.A. Times is what happens. Do you have any plans to continue your vision after you're gone? Perhaps leaving the paper in the hands of a non-profit foundation?
Mark Loundy
MediaWoorks
Media Consulting and Video Production
408-981-7939 (cell)
408-370-2119
http://www.mediawoorks.com |
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Michael Fischer, Photographer
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Spencer | Ia | USA | Posted: 9:48 PM on 07.14.09 |
->> Chris,
I'm sure the Charles City Press accepts credit cards :)
Michael |
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Dave Doonan, Photographer
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Kingston | TN | USA | Posted: 5:22 PM on 07.15.09 |
->> is he hiring?
I would love to work for someone like him! |
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Sam Morris, Photographer
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Henderson (Las Vegas) | NV | USA | Posted: 6:54 PM on 07.15.09 |
->> I don't think they have ever had a dedicated photographer, but if you can write, contact Mark Wicks editor@charlescitypress.com
It wouldn't pay much, but it is a great town to live in. |
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Michael Fischer, Photographer
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Spencer | Ia | USA | Posted: 11:13 AM on 07.16.09 |
->> Sam,
He has had one, but you can write that's a VERY big plus. It's tough for smaller papers to have someone dedicated to just shooting. It doesn't pay much, but Charles City, which is a lovely small town, is very affordable cost of living wise.
It's a small town, however, so you need to be aware of that.
Mark Hicks is a great editor.
Michael |
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Michael Fischer, Photographer
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Spencer | Ia | USA | Posted: 2:41 PM on 07.18.09 |
->> Dave;
Talked to Gene yesterday. If you can write sports, he has a opening.
Michael |
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D. Ross Cameron, Photographer
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Oakland | CA | USA | Posted: 4:09 PM on 07.18.09 |
->> Could someone please forward Gene's letter to Dean Singleton, Sam Zell, et al?
Thanks in advance,
DRC |
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