Donna Barrett, CEO of Community Newspaper Holdings Inc. and champion of quality journalism wherever she finds it, wrote a column recently that appeared in the Niagara Gazette, the Tonawanda News, the Lockport Union-Sun & Journal and the Medina Register, as well as in every other paper around the country owned by CNHI.
"Creating a more attractive experience for newspaper and Web site audiences enhances advertising revenues," she wrote. "Conversely, cutting back too much on content while raising prices to readers and advertisers accelerates audience declines, which in turn undermine advertising revenues.
"It's pretty much impossible for any business, including newspapers, to increase market share and profitability by decreasing the quality of its product and driving away customers," she added.
Simple common sense, I thought. How refreshing to hear it from somebody in the newspaper business these days.
Barrett's dedication to creating a more attractive experience for audiences and her staunch opposition to cutbacks and decreasing quality lasted about a week before she came up with a great idea to save CNHI some money by forcing each and every one of the company's thousands of employees to take an unpaid five-day furlough between now and June.
In a confidential memo sent to newspaper people from Cape Cod to Texas on March 11, Barrett finally told the truth about where CNHI's values lie.
"The recession continues to negatively impact businesses across the country, including those we rely on for advertising revenue. Until we see meaningful recovery in the economy, we must reduce expenses while maintaining our ability to serve our customers and our readers," she wrote. "We believe we have found a solution that should help us avoid future staff reductions. We have chosen to implement reduced work schedules for hourly employees and reduced work schedules and pay reductions for salaried employees in the second quarter."
Avoid future staff reductions? Since CNHI took over the once proud Niagara Gazette, the newsroom has been shrunk to less than one-quarter its former size. Only three beat reporters -- Mark Scheer, Rick Forgione and Rick Pfeiffer -- along with part-time columnist Don Glynn remain where, 10 years ago, eight full-time and two-to-three part-time writers labored.
It's difficult to imagine how they could do with any less. There are more former Gazette reporters now working at the Buffalo News than there are current writers working for the Gazette itself.
The floundering flagship of CNHI's Greater Niagara Newspapers group has seen seven publishers and eight managing editors in the decade since I worked there, each having failed at the onerous task of cutting costs and reducing staff to the point that the corporate masters down in Birmingham can continue to rake in the 20-plus percent profit margins that were fairly common in the newspaper business during the last two decades of the recent century.
Like many newspaper chains that sprang up from nothing during that go-go era, CNHI leveraged its acquisitions with cash realized from papers it already owned coupled with borrowing based on future earnings. Money paid by advertisers and subscribers to the Gazette went to finance the purchase of newspapers in Texas, television stations in North Carolina and Georgia, and a golf course in Alabama.
CNHI was founded in 1997 with a $110 million check from the Retirement System of Alabama, a pension fund for that state's public employees.
Executives like Barrett are there to ensure that RSA continues to receive a good return on its investment, rather than to pursue any worthy journalistic goals.
Needless to say, the Gazette and its sister papers failed to inform readers about the unpaid furloughs, in much the same way that the Buffalo News didn't play up the fact that it was closing its Niagara Bureau and planning on laying off 52 employees.
God forbid that anyone know what's really going on behind the facade at two of the region's most important institutions.
Last week, I did an interview with Mark Leitner of WNED, the local National Public Radio affiliate here.
He was talking to people involved in the region's newspaper industry, looking for insight as to why big daily papers from Philadelphia to Seattle are seeking bankruptcy protection or going out of business altogether on a daily basis.
People in the business agree almost universally that the current bad economy combined with the rise of the Internet are to blame for their woes, which is understandable. It's a bit more comforting, after all, than blaming themselves.
But the truth is that the slow death of the paid-circulation metro daily can be attributed to a single cause, regardless of whether the paper publishes in Boston or Bakersfield. And that cause, that culprit, is greed.
It's responsible for the fact that when the papers were making a ton of money they didn't put any away for a rainy day. It's responsible for three-man newsrooms at papers the size of the Gazette and it's responsible for papers having to file for bankruptcy even though they are still making money.
I expect the time will come in the not-too-distant future when they only seven-day-a-week paper available here in the Falls will be The New York Times.
And that will be a sad day for everyone.
| Niagara Falls Reporter | www.niagarafallsreporter.com | March 24 2009 |