Bureaucracy and newsrooms

by Jason Preston on July 22, 2009

John Gruber recently floated the notion that big newspapers are failing (while startup news operations are succeeding) because of bureaucracy. Mark Bernstein promptly disagreed, but, I’d like to note, doesn’t really disagree so much as quibble over semantics.

The fact is that both authors have a valid point: Gruber is right that large news organizations are struggling to support an infrastructure that they’ve built over profitable years producing a paper product. And Bernstein is right to say that this extra weight is not “bureaucracy,”— it’s muscle.

But if a newsroom is muscle, then the ad revenues are a newspaper’s skeleton, and we’re dreadfully short on Vitamin C. News startups (like TPM media) are growing because their “muscle” is proportional to their “skeleton.”

So what should a newsroom do? Maybe they should jettison the extra muscle. A strong but unemployed editorial department does no one any good, and the staff necessary to produce and distribute the paper product are becoming increasingly irrelevant.

But someone has to go first. In Seattle—actually, in the US—the Seattle PI is the first large metro daily to drop 79% of their workforce and forge ahead as an online-only newsbrand.

Once that starts working, we might see more dailies abandoning their legacy products.

{ 1 trackback }

Muscle, not bloat | Hypercrit
07.26.09 at 8:13 pm

{ 2 comments… read them below or add one }

1 Mark Bernstein 07.22.09 at 1:07 pm

Is it possible, in general, for a newspaper to jettison its print distribution shell and “forge ahead as an online-0nly newsbrand”? Often, this would be difficult to achieve, even if management earnestly wanted to do it.

First, these are existing businesses. Their balance sheets are full of assets which clearly have value, but that the online-only newsbrand doesn’t need, assets like real-estate, printing plants, hundreds of trucks. It’s hard to walk away from assets, even if you’re a flinty manager, because they’re probably collateral for your bank loans. And it’s hard to liquidate them, because they’re probably more valuable to you than to any obvious buyer. (How many companies need a hundred delivery vans?)

Some of those assets are valued because of synergy with the newspaper. Look at the Chicago Tribune; it’s got a radio station, it’s got a TV station (and the TV station has a boatload of satellite deals), it’s got a baseball team! It’s got a landmark structure. Maybe you can walk away from the printing presses, but you can’t just abandon the Cubs at the local dump and hope for the best. But how is your online-only newsgroup (with, say, 20 staffers and annual revenues of $5M) going to secure financing for operating the Cubs?

You wouldn’t be an online news organization that held some legacy assets. You’d be the Chicago Cubs with some bloggers in the back room. Pulitzer Prize bloggers, sure, but that’s what a bank will see.

Second, there’s the contracts. Newspapers have had a difficult relationship with delivery and fulfilment personnel since the newsies struck Pulitzer and Hearst in the 1880s. Want to fire all the delivery people? That’s going to look to them like you’re breaking their union — and that’s been tried any number of times. OK — you’re going out of the delivery business, you don’t need the Teamsters any more, fine. But the writer’s guild is going to be uneasy. And maybe UPS drivers won’t cross the picket line, so you can’t get stuff delivered. Besides, you’ve got contracts; it’s hard to tear them up.

2 Jason Preston 07.23.09 at 8:07 am

Mark – you’re 100% right. Doing the business equivalent of clearing out the attic is a very difficult process. In the case of the PI, which was owned by deep-pocket Hearst, they literally shut down the paper as a company, wrote a big check, and then started up a brand new company with the same (but slightly different) name of SeattlePI.com.

Good way to get around contracts…

But yes, your point is well made. Dropping a print product is not a simple management decision; but bankruptcy is an option, and for many papers, it could be the only option.

Leave a Comment

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>