Those of us who are daily readers of the San Jose Mercury News have had a little more than a year to observe the newspaper since Dean Singleton and his company MediaNews bought the northern California newspapers formerly owned by Knight Ridder.

It is obvious a great deal has changed.

Some of the changes have been mostly benign.

For instance, the crossword and other puzzles have moved to the inside back of the daily classified section. I suspect this move saves a bit of newsprint a day which helps save a job somewhere at the paper. This change does no real harm.

Other changes are more harmful. There have been layoffs and resignations. Well-known bylines have disappeared.

The worst thing about what has happened to the Mercury News is what we do not know. With 50% fewer people in the newsroom there are countless enterprise stories that are being missed. Sadly there is not way to know about them.

Some of the changes are very apparent. The newspaper has eliminated the weekly opinion section Perspective, the Monday paper is down to a very skimpy four sections. The story selection for the front page of the A section is all over the place. Stories on page 1A range from things that seem to have no news value to interesting piece that would have been great leads for the Local section or an inside feature section.

On Sunday Oct. 7 almost 50% of the front page was devoted to a blurred picture of a single college football player. Almost 14% of the same page was used to promote content inside the newspaper and another 4.7% of the page was an ad. On that Sunday barely a third of the front page was devoted to front page news.

These changes have occurred gradually over the last year. I had not thought about their total impact until a few weeks ago when Ron Beach, a former classified ad director at the Mercury News, emailed that he had been in the bay area for a visit and had read the Mercury News for a few days. He asked me: “What is your take regarding the Mercury News of today vs. a few years ago?”

I responded to Ron’s question. Then I forwarded my comments to the private email list I maintain and asked people for their thoughts. I had about a dozen replies which I have reproduced below. All of them are from former SJMN employees and several are from well-known journalist. Some dealt with specific content that has changed, like arts coverage. Other took a broader, more philosophical approach to the direction the paper has taken.

Beyond that, it is hard to generalize about the comments from my far-flung correspondents. Since some of the comments I received refer to what I wrote when I responded to Ron I’ll start with my thoughts, slightly edited:

I…think the paper has been diminished in a number of smaller ways, which you might not notice if you had not been reading it daily for a few years.

For instance, the Local section on Monday is almost always full of stories picked up form the weekly Silicon Valley Community Newspapers. These stories tend to be soft, a little out-of-date and not especially well-written.

The Sunday TV book is now a tabloid and the content has been radically reduced. Only three and four star movies are listed and the daily highlights are down to almost nothing.

The number of features in the Sunday Arts/Entertainment/LifeStyle section has been reduced. The Books pages are down by about half.

Especially notable is the disappearance of the Perspective section.

Another thing I have spotted is increased dependence on the NYTimes and other wires for coverage of national and international events.

I think the story selection on page 1A has been very different than it was a few years ago. Even if you discount stories that are down right silly on the front page—the champion hot dog eater for instance—the news deemed worthy of out front treatment have changed. Most days the front page is very local and significant national and international events are either below the fold or inside the section.

Also, page A2 has turned into a jump page… the features from page A2 have been moved to page A3. I found this change a bit amusing since Joe Natoli and his minions negotiated with the folks at Fry’s for about a year to get this (page 3A) space back so the newsroom could use it as a second front page. The idea was to give the front of the A section a newsier feel. Also, page 3A was sometimes used for an “In Depth” feature, which no longer has a home in the A section.

Here are the responses I received form people on my email list, in no particular order. I have included some minor info about each of the writers to provide context.

This is from a former Mercury News journalist who still keeps a close eye on what is happening here:

“Given the ascension of the Internet as a source of news for national and international news, and given the dominance of Craig’s List and Monster.com etc. for employment advertising, there is no question that papers like the Mercury News must make local news their central mission. There is no other business model that can keep local and regional papers alive. This has begun to happen on news at the Merc. But the paper is still spending huge amounts of money to send sports reporters and columnists to far-flung events that are covered as well or better by national outlets. Better that money should be spent on improving the quality and breadth of the local news report which — although it is now central — remains relatively shallow. Some fine work has been done on local issues, but not nearly enough to make the paper a must-read for people locally. Unless the Mercury News can do this — that is, make itself so vital to local and regional residents that they feel that have to subscribe to it — it will continue in its death spiral. This also means making smarter choices about what goes on page one. There should be an engaging, light read in the mix every day, but is should be a secondary story, not the centerpiece. With more resources focused on local news, there would be plenty of competition for lead stories every day that readers would find important and compelling — and a reason to justify paying for a printed product.”

I think these comments are right on the money. Metropolitan newspapers—like the Mercury News—survived for decades by meeting readers’ needs for national and international news, big-time sports and classified ads. All three of these are now delivered faster and better by the internet.

The Mercury News has done a great job lately on some important local stories—like the “resignation” of county schools chief Colleen B. Wilcox. This content is compelling and because of it I find myself taking longer to read the paper many days. On Sunday October 7 I had an hour long yakathon with Bob Schied, a former Mercury News automotive ad sales star. Bob noted many of the changes in the paper but he also noted that there are many very good feature stories which he finds worth reading.

This was emailed to me by another former Mercury News journalist:

You made some interesting observations about the current MN. The biggest loss in my opinion is Perspective.

Bringing 1B news onto the 1A spot has good and bad days. Today (9/21/07), for instance, the biggest story, the lead story, is the reopening of Original Joe’s Restaurant???? This is the best that can be done in the heart of Silicon Valley?

You should read Sports. The MN has excellent sports writers. Ann Killion is terrific, everything she writes, and Mark Purdy brings in years of experience. Even if his opinion is sometimes not so bright (see, I didn’t say stupid). Mark Emmons is top notch.

So, in all that is said and done, the Sports section is probably the best written and best covered of all the sections.

B section suffers. The reason for this is the small news hole for B, and the fact that the main writers are no longer there. Hardly any staff coverage of the neighborhoods. That is where the Silicon Valley Community Newspapers come in.

I don’t agree with your take on those writers however. Some are former MN staffers; some are college kids getting their first experience on a newspaper. I might add they make exactly half of what the MN editorial people are being paid, and they do a good job. Without Community Newspapers, there would be little or no neighborhood coverage. So, you are wrong there, Lou.

Features and Special Sections are struggling. Again, few writers and I might add, fewer copy editors. I noticed a Food story that mentioned a restaurant was off San Thomas (sic) Expressway. A more careful copy edit would have caught that the expressway is San Tomas.

These are the kinds of things that creep into the newspaper every day.

I don’t like the new Biz section. It’s too rah-rah looking for my taste.

I should be the last person to mention bad copy editing, considering the number of errors I make. But I agree that there are more small errors creeping into the paper. Copy editor shifts are expensive and I am sure they have been cut to save money. I agree about Ann Killion and Mark Purdy. They are fine writers. I always enjoy Purdy’s “better mail than jail columns.” I also remember a column Killion wrote years ago about covering a Super Bowl with her practically newborn baby in tow.

The Business section is a dilemma for me. It is glitzy looking, which I think sometimes detracts from the seriousness of the subjects covered. Also, it contains some content that seems to have no connection to Business.

Some examples of this are “The List” in the Sunday paper:
“Top Videos on YouTube for week…”
“Top 10 song downloads on iTunes for…”
“Top 10 DVDs on Amazon for week…”

There are similar list in the daily business section. They are interesting but I do not understand how the constitute “Business” content.

These comments are from a former business-side senior manager:

… I sense a lack of place (Silicon Valley) and lack of coverage that used to be our mantra: The Capital of Silicon Valley. And that permeated into everything: business, main, lifestyle features, the internet, all the things that made this place truly unique or as, Jerry Ceppos used to say, “the capital that is changing the world.”

But, the truth is since the dot com bust, this market isn’t really changing the world much anymore. We were going to be a world class newspaper. The New York Times could have Wall Street. The Washingon Post could have government but we would have Silicon Valley.

I think they’re doing a pretty good job of covering the few start ups that are making it a go and the Googles and Ciscos of the world, and certainly the internet, and it’s probably current market conditions that are affecting coverage so much.

Not to mention a war in Iraq and a president with the lowest approval rating in this century.

Also, I think the killing off of Nuevo Mundo and Viet Mercury was a long-term strategic mistake. I know they were difficult to sell ad wise, but it will take them all that much longer and cost them a lot more to get back into that market, than if they could have sustained them over the long haul. With 50% of the market not white, and the internet having captured the youth market, the market viability, long term, of an English language newspaper gets smaller and smaller.

I applaud the new editors’ open “remake the Mercury News” effort… I wish them well, and although the loss of Perspective and the TV book were real diminishments, I’m sure the groaning was heard louder in the newsroom than anywhere. Let’s hope the market, and the resources come back but I think it will be a very long time.

I’m sure you’ve noted I’ve alternated between “us” and “them” throughout this missive. I’ve been gone a long time but still hold an affectionate place in my heart for the Mercury New.

This is from another former business-side senior manager:

…Knight Ridder was an employee oriented company and took great pride in publishing great newspapers. This was true until Tony took over and continued, in part, through his tenure particularly in San Jose. The changes in the news product seem severe given that history. In other similar markets, much of what is being cut never existed. From my post San Jose experience, what we had was lavish by comparison. They truly were the good old days.

I think there is more than a little truth is the statement that “what we had was lavish by comparison” to other newspapers. Mercury News circulation ranked about 30th in the country for much of the last 25 years. Yet, we were ranked as one of the 10 best newspapers in the country. During David Yarnold’s tenure as executive editor he set a goal to make the Mercury News the best newspaper on the west coast. For a time, especially when the Los Angles Times hit the skids, I thought we had made that goal.

This is from an ad side manager who left the newspaper a decade ago:

…the only thing that is disturbing to me so far is arts coverage. There are fewer critics, and I notice Rich Scheinin (who I LOVE to read) in more often, and Karen D’Souza is doing more, or so it seems. Also, freelancer, Colin Seymour is back, and that is good. The “Picks” the other day were relegated to the BOTTOM of a page, which was odd, but it looks like they are sqeezing everything sooooo tight, that there is no eye for design.

The other offense is that Sports was combined with Class. yech! The combination of A&E and other features is less offensive, as it strikes me as a throwback to the former “Living” section that we all knew and loved…..that said, they should rename those sections, so that it doesn’t look like A&E is getting the short shrift that it truly is getting!!!

Several of my old friends from Classified sent me their thoughts. The first of them:

Truthfully, I find very little that I care about reading anymore. I miss the Perspective section on Sunday - it was one of the things that I did read.

This is a somewhat minor observation in the scheme of things, but I read the Crime Report daily, and San Jose hasn’t even been listed there for almost 3 weeks. However, Campbell and Los Gatos are there just about every day. I would like to know if there is something going on in my neighborhood.

I aslo miss the brief summaries on the TV page about programs that are on that evening. Who cares what the call letters are??!!

So basically, I scan the newspaper - don’t read the Sports section, but do read Action Line, the Obits, Ann Landers, and do the crosswored puzzle. Guess my favorite section is the Valley section.

It also seems like there are more ads than ever on the page….. Content on gone downhill in my opinion.

And from a former classified department manager:

Being from the advertising side, I’ve always tried to make sure there was a very delineated line between advertising and journalism. I’ve noticed the decline in well-written news stories, but I’ve also noticed a decline in advertising quality (just gimme and ad–who cares where it is or what it looks like), so I feel we have to be fair there.

Newspapers were designed to be the eyes of the community. There was no other way to get reliable information, especially in-depth. We can no longer do that because the community now has choices that are, quite frankly, more in-depth, more focused, updated more quickly, and more available than waiting for something on your porch to show up (or in your driveway) each day.

The MN is so small now; it’s not worth even paying 35 cents to a lot of people anymore. You can purchase whole magazines with less advertising and more information devoted to what your specific interest for just a few pennies more and perceive a better value. (Now don’t gag, but even the National Enquirer has more news with less ads for a better price and is almost as much newsprint–with color on every page!)

There will always be paper-type products for people to read, but the day of the daily newspaper is numbered and I believe faster than any of us wish to believe. There simply is not enough revenue to support a daily newspaper because we can no longer offer the advertiser the advantage of being the best focus for their customer. As long as squeezing the last dollar out of the customer is the focus instead of serving the community, we’re doomed to fail.

Finally, (and this is really painful for me to say), but I think that the new place for ongoing advertising is going to be updated lists of businesses, like the yellow pages, where people go when they want a service, it will list the usual name, address, type of business; but will include web addresses so people can find what they want. These will come out reliably and be very regionally focused. Real news will be audible and Internet only. Niche news that can change quickly with public needs will survive, but old-time newspapers are a thing of the past.

From a front-line employee in classified:

…in my opinion I noticed right away the content of the entire paper got
BORING - BORING - BORING.

My neighbors…all know I worked at the Merc for almost 30 years and so they always feel the need to tell me their opinions as well. They also say it is boring and little is written about what is really going on in the S.J. area such as crime and useful info we should be aware of. I always enjoyed getting up in the morning and having my cup of coffee while reading the paper.. no more.

The biz/tech section is totally not what a lot of us are interested in reading. I used to read Business but now I never read the new section and of course Classified is a sorry section of about 3-4 pages normally. It’s almost embarrassing but probably not much can be done about it since so many use other avenues now such as Craigs list. Who can blame them when it’s free?

And finally, from another classified department front-line employee who has a way with a phrase:

How has the paper diminished? Well, I think news coverage as a whole in the Bay Area has diminished because, with the Bay Area Singleton papers all carrying each others’ stories, most of us are reading the same stories now, no matter where we live.

Losing the Perspective section is emblematic of the Mercury’s new direction. It was the one section I saved aside each week until I had some quiet time to devote to reading its often thoughtful articles.

The other big thing is that the local news coverage has really gone downhill. Before the sale, I could rely on the Merc to keep me informed about local news. But now there are lots of stories picked up from other papers that really don’t matter to someone in San Jose. For instance, while it is sad to hear that there was a one-alarm house fire in Castro Valley, I’m not really sure how it serves readers in San Jose to read about it.

Several months ago, several people wrote letters to the editor, published in the Saturday Merc, about some local events that even USA Today and the Wall Street Journal had covered, but not the Mercury News.

The trend of picking up stories from other newspapers and news services extends to every section of the paper. Even the Food section, which I could previously count on to carry good recipes geared to what is currently in season in our region, is now carrying more stories picked up from elsewhere.

I’m not happy with the new TV listings section, but I do understand the business decision behind it. I’m not much of a TV viewer, so it doesn’t much matter to me.

Particularly nettlesome are the quality control problems. I see so many mistakes in the articles that I think surely no one is proofreading them anymore. Also, I see more problems such as a note that a story is continued on page 2B, for example, when in actuality it continues on page 4B. (Sometimes, the rest of the story is nowhere to be found!)

I still think the people putting out the Merc are good, talented people. It’s just that there are fewer of them, so the resources that were previously devoted to putting out a top-notch paper are no longer there. All in all, the Merc is a shell of its former self. It’s very sad to see such a fine paper descend so rapidly. I feel the blame rests squarely on the shoulders of Dean Singleton. He once called the Merc the “crown jewel” of the Knight Ridder papers. Well, he seems to have broken the crown into parts which he’s put into a pawn shop.

I still expect that within 5 years, the Merc building will be sold and the remaining reporters and some outside sales people will be relocated to a floor in a highrise in downtown San Jose.

I also predict that the recent section “consolidations” (i.e., cuts) will lead to even more subscription cancellations (though I still feel a tremendous sense of loyalty to the Merc employees, so I’m keeping my subscription going.)

The San Jose “Mercury News”? Perhaps people don’t realize it’s really more like the San Jose Argus now.

…I felt the Mercury reached a new low yesterday (Sept. 24, 2007). I saw a headline in the business section, front page, about the thefts of GPS devices being on the rise in Milpitas. Well, I live near Milpitas, so my attention was grabbed and I started to read.

As I started to read the article, it talked about evens in Boston, Philadelphia and the Washington, D.C., area, so I quickly realized I was reading a wire service report and not an article written by a Mercury News reporter. I looked at the top, and sure enough, it said “Associated Press.”

But then, about half way into the article, it suddenly started talking about Milpitas. Well, I don’t know about you, but I’ve never read an article that talked in the same breath about events in Boston, Philadelphia, and Milpitas. (Milpitas?!) So I thought, “I bet you that at the end of this article, it’ll have a little blurb about ’so-and-so from the Mercury News added to this report.’” And sure enough, such a blurb was at the end of the article. So now it looks as though the Mercury has been reduced to purloining articles from the AP, slapping on a headline dealing with something local, and adding some lines to the story to “personalize” it in the local sense. Pretty cheap if you ask me. (I realize it’s a longstanding tradition to take wire service reports and add to them, but this case was different.) Pretty sad.

All of the comments here are from former Mercury News employees. They were all proud of the paper when they worked there. It is not surprising that they have noticed the changes.

But non-employee readers are also not happy.

I have spent a lot of time in the last six weeks with doctors, nurses and other medical types. Many of them know I am a Mercury News retiree and they were not bashful about telling me how unhappy they are as readers. The same is true of the members of my old white guy posse and the folks I talk with at Peet’s Coffee Shop in Willow Glen during my daily stop.

It appears there has been a change in the relationship between San Francisco businessman and social commentator Clint Reilly and the MediaNews newspapers in the Bay area.

Reilly has been publishing a weekly column in the MediaNews newspapers for about the last six months as part of the settlement of an antitrust lawsuit. The column has appeared under a slug identifying it as a “Paid Advertisement.” But the column published today had a small italic slug at the top that says “Provided by MNG” (MediaNews Group.)

Also, biographical info about Reilly at the end of the column disappeared as of today. Instead, there is a copy block at the end of the column which says:

“Clint Reilly’s column appears weekly in 11 Bay Area Newspapers owned by MediaNews Group. MediaNews is providing the space at no costs according to the settlement terms of a public interest antitrust suit filed by Reilly to promote newspaper competition. The views expressed are Clint’s alone.”

This is a significant change, particularly considering the vehemence with which MediaNews Group Inc. President Jody Lodovic denied that the space in each member of the California Newspaper Partnership (CNP) would be free to Reilly. Lodovic was interviewed by Editor and Publisher magazine last April. At that time he insisted:

“This is paid space,” Lodovic said. “(Alioto—Reilly’s attorney is) running around telling everyone (Reilly’s) getting it for free. We haven’t got any terms for it yet, but it’s paid space.”

Lodovic also denied at that time that:

“Reilly has the right to sit on the editorial board of any California Newspaper Partnership (CNP) newspaper he chooses…”

Something has obviously changed and as soon as I get more details I will pass them along.

For those of you who need a refresher here is some background.

Last April MediaNews reached agreement on an anti-trust suit Reilly had filed challenging the sale of the former KRI newspapers to MediaNews and seeking to ban cooperation between the San Francisco Chronicle and MediaNews.

This is a graph from Pete Carey story on Mercury News.com at the time which summarized the settlement:

“A San Francisco investor’s lawsuit challenging the purchase of the Mercury News and Contra Costa Times by MediaNews was settled today with an agreement that Hearst and MediaNews abandon an earlier proposal to collaborate on national advertising and distribution in the Bay Area. The settlement was announced at a press conference by Clint Reilly, the investor who sued Hearst, MediaNews, the California Newspapers Partnership and Stephens Media to block the deal and Hearst’s involvement in it last July. He argued that the deal violated antitrust laws.”

I found all of this moderately interesting, although I did say at the time I thought MediaNews had won the suit.

It looks like I may have been premature in that judgment.

The San Jose Mercury News is about to make a series of sectioning changes largely focused on the newspaper’s arts and entertainment and feature sections.

These changes will begin next Monday and are part of a building-wide effort to reduce expenses in response to an error in the newsroom salary budget.

Here are the changes, as I currently understand them:

Monday

There will no longer be an Arts and Entertainment section. Comics and some other small amount of newshole will move into the Local section. Charlie McCollum’s Monday TV column will move to Tuesday.

Classified will be combined with the Sports section.

Tuesday

The Arts and Entertainment section will be renamed SV Life Arts and Entertainment.

Wednesday

The Arts and Entertainment section and Food section will be combined into one section called SV Life Food and Wine.

Thursday

The TV + Comics section will be eliminated. The content from that section will be moved into the eye section.

Friday

The Arts and Entertainment section will be renamed SV Life Movies.

Saturday

The Arts and Entertainment section will be combined with the House and Home section and renamed SV Home and Garden.

Sunday

No changes have been announced.

These changes are significant but they are not enough to solve the budget problems revealed in the last couple of weeks. Because of that I suspect more changes will become apparent as each day’s paper rolls out next week.

Your comments on the Mercury News
About a half dozen people have responded to my request for people to give me their impressions of how the Mercury News has changed in the last year or so. Several of these comments are detailed and thoughtful. I appreciate the effort people put into them.

A couple of others fall into the broad category of “the Mercury News mostly just sucks these days.” I plan to push back a bit on these and ask people to be more specific.

If you have thoughts about the current state of the Mercury News feel free to pass them on. I plan to compile all of this and send it out to the group by early next week.

In case you missed it, here is how I initially asked for your thoughts:

How do you think the paper has changed, from a reader’s perspective, compared to the summer of 2006 when the sale was completed? I’ll compile any answers and pass them on.

A couple of pleas:
•Please do not turn this into an anti Dean Singleton rant. I am sorry to see the changes (I have noted in my previous blog) but that does not mean I disagree with the motivation behind them. Had the folks at Knight Ridder taken some of these tough steps the company might still be around.
•Refrain from general comments like “The Mercury News mostly just sucks” or “The Mercury News is a crummy liberal rag.” I am interested in the kinds of changes that a thoughtful reader would notice.
•If you think some of the changes have improved the newspaper please include those. I am not a sports fan. But I am vaguely aware that some of the Sports coverage the SJMN gets from the other Singleton papers in NorCal is pretty valuable to sports fans.

The San Jose Mercury News is reducing expenses due to an accounting error which may lead to fewer journalists and cuts in other expenses.

This newest round of cuts was announced at a meeting in the newsroom about a week ago, on Friday September 7.

Several sources have said the error in the budget was close to $4 million. Of that $3 million may come from the newsroom. If this is the case the impact is likely to be dramatic.

None of these sources was willing to go on the record for fear of retribution.

No layoffs have been announced in response to this newest round of cuts. But it is hard for me to see how expenses can be cut by $3 million without further staffing reductions. $3 million is a big number and a big percent of the total newsroom budget.

Here is my speculation on how the math works.

There are about 200 people left in the Mercury News newsroom with a total budget for salaries and benefits of $20 million, give or take a couple of hundred thousand dollars. It is hard for me to get a good fix on the newsroom operating budget (all expense items other than salaries and benefits). If the operating budget is another $10 million (which I think would be a lot) that makes a total budget of $30 million. That would make a $3 million cut 10%. If the total budget is $25 million the $3 million is obviously 12%.

Regardless of the percentage, finding another $3 million to cut out of the budget will not be easy considering how much has already been cut.

I am being told that the people behind well-known bylines who do general assignment reporting and investigative work will be assigned to more mundane beats in business and metro. If this happens there is a danger these talented people will move on to places where they can do more than cover beats like City Hall.

These reassignments will save money in the long run since replacements will not have to be hired for beat reporters who resign.

Some of the non-staffing related changes being considered are further reducing the news hole, combining sections and cutting some of the comics.

Combining sections probably has a minimal impact on the newsroom budget. But it does result in a much different editorial product. Combining sections could reduce newsprint costs and might be a way to eliminate a second pressrun many days.

There are a number of four and six page sections in the paper now which could be combined. For instance, on Saturday the Home and Garden section could be combined with Arts and Entertainment. Also, some of the free standing classified sections could be combined.

Depending on how this is done the late afternoon/early evening press run that is now used to print the feature sections and classified could be eliminated. This would save personnel costs in the pressroom and substantial transportation expenses.

There are big downsides to a move like this.

First, it might mean earlier newsroom deadlines for late closing sections like main news and sports.

Second, the paper would be less reader friendly. Combined sections on Saturday would mean it would no longer be possible for one person to read about the latest video games while someone else read about gardening.

Third, it may be harder to meet advertisers’ requests for placement of their ads inside of a desired section.

Some of the changes may already have started.

Just this past Monday the Mercury News dropped Cathy and Piranha Club and replaced them with Secret Asian Man and Get Fuzzy. I thought Cathy and Piranha Club were repetitive, tired and terribly out of date. I am warming to Secret Asian Man and reserving judgment on Get Fuzzy. I do not know if these changes were part of the cost cutting or an attempt to make the comic pages more contemporary.

Also, the Drive section on Friday was changed from a newsroom section edited by Matt Nauman to a section edited by the marketing staff in advertising. This was another change that may have been made to save a few bucks. On the other hand the Drive section is about 15 years old. The SJMN share of auto advertising has dropped in recent years as car dealers make more use of the web to sell cars. Changing the Drive section is a reasonable response to this.

Regardless Matt did a great job on the Drive section from its start until now. The Mercury News has benefited from his knowledge, ability and the contacts he has developed in the auto industry. I am told he will be covering environment/green issues.

Over the last couple of days I have struggled with the issue of how an error like this could have happened.

There is a part of me that wants to say “off with their heads” about the people/department who made this error.

I have never worked with the MediaNews budget system. But one of the basics of a budget system is a series of balancing steps that compare a variety of factors to prevent errors of this magnitude. It is hard to believe that someone did not see the error, either in the budget department or in the newsroom.

At the same time, the Mercury News has been in so much turmoil—and is now part of such a complex organization—that I am inclined to be a bit more charitable. Expenses have been cut so much versus the previous year that year over year comparisons are probably useless. Also, the co-ordination among the various MediaNews properties means that knowing exactly how much is going to be spent at any property to cover the Warriors (to pick an example out of the air) is probably pretty tough.

Still, a $3 or $4 million error is very hard to get my mind around.

A couple of other things:

John Armstrong, publisher in Contra Costa, wrote an interesting column a while back, explaining what is happening to newspapers to his readers. The link is below.

Editor and Publisher posted a column a couple of weeks ago (linked below) that included some interesting commentary on the issue of non-compete agreements in Knight Ridder. For the record I remember attending a KRI meeting in Miami at which all the senior ad execs in Knight Ridder were asked to sign non-competes on the spot. We were also asked to take copies back to our home newspapers so that our sales managers could also sign them.

I refused to sign one and would not take them home for signature. Non-competes are pretty hard to enforce in California and I did not want to ask people to sign a document I knew was mostly worthless.

The Eastbay Express opines (linked below) about MediaNews plans to eliminate The Guild at the Mercury News. I am sure Dean Singleton and his minions would love to have a non-union front office in San Jose. But there is a mountain more money to be saved by eliminating the Teamsters, press operators and any other back shop unions left at 750 Ridder Park Drive. The Guild is in for tough times but they are probably not number one on the hit parade.

From the Contra Costa Times

READERS, WE HEAR YOU
With your support, Times will stay strong in face of challenges

DEAR READER, we need to talk.

Times editors and I have been receiving letters and e-mail messages from a few of you — some have been published in the paper –expressing displeasure with changes in the Times, and that makes none of us happy.

“You and the Times have really hit an all time low,” wrote a reader from Antioch, scribbling his comments across the face of a front-page advertisement cut from our East County edition.

A Clayton reader e-mailed to protest not only the acceptance of front-page ads but also the move of Sunday’s Perspective section to the back of the Nation & World section. “Newspapers have a role in terms of facilitating discussion of issues,” he noted. “Don’t abandon that role.”

A Dublin correspondent weighed in on the Perspective change: “It is sad when your newspaper eliminates a once a week ‘intelligent section’ and devotes 12 PAGES daily to SPORTS!! Sick!”

And then there are the sticky advertising notes that sometimes are appended to the main section. Nobody seems to be a fan of those.

Yes, we need to talk.

From Editor and Publisher online

Shoptalk: Goodbye to Loyalty

By Jennifer Saba

Published: September 04, 2007

Those following the tribulations at American newspapers certainly witnessed a strange summer. In the Dow Jones auction, for example, the loony waffling of the Bancroft family was even enough to inspire sympathy for that devil Rupert Murdoch. Amidst the swapping of properties, the layoffs, and the dismal ad results was the saga that played out in a St. Paul, Minn., courtroom (detailed elsewhere in this issue).

What gained the most attention was Par Ridder, the publisher of the St. Paul Pioneer Press, admitting that when he crossed the Mississippi to take the same post at the Star Tribune in Minneapolis he bogarted a whole slew of documents, charts, and templates on his laptop and other such proprietary information and delivered the goods to the CFO of the Star Tribune. E&P obtained the transcripts from the trial, and after poring over them found that one of the more bizarre aspects to this case — and trust me, there were many — related to another issue: Ridder’s noncompete agreement, which existed when he was publisher of the Pioneer Press.

From the East Bay Express

Trashing the Union
With the Oakland Tribune down, Mercury News may be next; and city says collecting debts from notorious bakery isn’t a priority.
By Robert Gammon
Published: September 5, 2007

Less than a week after the East Bay garbage lockout ended, The Contra Costa Times ran a scathing editorial that criticized trash hauler Waste Management, calling its actions “unnecessary” and “disgraceful.” The paper urged Oakland Mayor Ron Dellums and other cities to examine ways to terminate their garbage contracts, saying the company should “pay a steep price” for locking out the Teamsters’ union.

Ten days later, Dean Singleton’s MediaNews Group, majority owner of the CoCo Times, the Oakland Tribune, and other East Bay dailies, made Waste Management look downright union-friendly. The chain told officials from the Northern California Media Workers Guild — which represents reporters, photographers, and copy editors at the Trib — that it would no longer recognize the union.

MediaNews officials claimed the guild no longer represented a majority of newsroom employees following the merger of the nonunion Times and former Hills newspapers (including the Montclarion and Alameda Journal) with the unionized Trib and sister papers, a group then known as ANG Newspapers.

Guild officials immediately filed charges with the National Labor Relations Board. They claimed that the company had purposely downsized ANG’s staff to ensure it would be dwarfed by nonunion staff from the other papers once the merger became official.

In the 2002 Steven Spielberg movie “Minority Report,” there’s a scene in which commuters are reading USA Today. Only as they’re reading, the photos and story mix are changing right on the page. It was not one of the most important scenes in the movie, but it has stuck with me these past few years and I have often brought it up when speaking to community groups about the future of newspapers.

You see, the ongoing conversation about newspapers vs. the Internet typically come down to the same conclusion: The Internet eventually will kill off newspapers once and for all. The only question supposedly remaining is: “How soon?” This debate and solution, however, presupposes a very iffy proposition: that technology essentially will remain frozen long enough for the scenario to play itself out, to the certain demise of news on dead trees. Progress doesn’t often work that way.

Quick: Anybody remember the first music video that ever played on MTV? If you said “Video Killed the Radio Star,” give yourself a gold star. It seemed like such a forgone conclusion at the time: If you could actually see rock stars perform a song, why would you settle for hearing them do it? But here we are more than two decades later, and radio — such as it is — is still going strong, and with satellite radio offering hours of listener-specified programming with little or no commercial interruption, the medium’s future appears to be secured. MTV, meanwhile, has become so overrun with reality and other programming that you could watch it for most of the day and never see a music video.

The point: What if the future holds a true melding of newspapers with Internet technology — and not just a capitulation by newspapers in which they go all Web with no print edition? That’s essentially what those commuters on Minority Report were holding in their hands, wasn’t it?

Every component needed to produce such a hybrid either already exists or is being developed in corporate research labs right here in Silicon Valley, even down to a product called “liquid paper.” OK, nitpickers, liquid paper isn’t actually paper at all, but a computer screen so thin and durable that it can actually be folded up and put in your pocket. Now add to that wireless Internet and a dash of not-so-pie-in-the-sky nanotechnology and insto-presto, you have the newspaper of the future: Buy one “paper” that lasts a lifetime, then subscribe to a 24-hour news service from USA Today or The New York Times.

Liquid paper seem too unwieldy? How about a pair of eyeglasses — or even contact lenses — that use wireless nanotechnology to project a copy of the latest edition of The Washington Post into thin air about a foot in front of your face?

If newspapers are to leverage technology to carve any future at all for themselves, however, the leadership will have to come from progressive, forward-thinking companies that are willing to spend money and even lose money for a few quarters with an eye toward a long-term payoff. In other words, while the necessary technology likely will be produced in Silicon Valley, the actually publishing leadership component of the partnership will almost certainly come from somewhere else.
Just one man’s “Minority Report.”

Oakland Post Publisher Paul Cobb has challenged Bay Area media to continue the work of slain editor Chauncey Bailey, according to a story posted on the KCBS Web site. Calling the murder “a moment of disaster for journalism, nationally and internationally,” Cobb added, “I hope this is an opportunity for us to continue the work he was doing and to step up.”

Cobb is right. Except it’s more than an opportunity. It’s a responsibility; a duty, even though the last time something similar occurred, both the effort and the result were highly controversial.

That was more than 30 years ago, following the 1976 car-bombing death of Arizona Republic reporter Don Bolles, who had been working on a story about mob activities in Arizona. In what became known as the Arizona Project, almost 40 journalists from some two dozen newspapers across the U.S. descended on Phoenix to finish the job started by Bolles. In 40 stories that ran in several newspapers over 23 days, they documented mafia influence at the highest levels of Arizona politics.

Nearly all of the reporters and editors involved in that effort were also members of a then-fledgling national organization called Investigative Reporters and Editors, as was Bolles himself. I joined IRE in 1978, and for the next several years, the Arizona Project remained a hotly debated subject at its national conferences — not to mention in U.S. journalism generally. While the Indianapolis Star, the Boston Globe and the Miami Herald published the story, neither the New York Times nor the Washington Post would have anything to do with it. Even the Arizona Republic — Don Bolles’ employer — didn’t publish it (although 30 years later, it did publish a decent look back at the project).

Many journalists argued that it was “vigilante journalism,” and some even compared it’s “you mess with one of us, you mess with all of us” message to a gang mentality. And the series certainly didn’t put an end to the mafia activity in Arizona.

Don’t care. Doesn’t matter. Anyone who would even consider killing a journalist on American soil in an attempt to kill whatever story on which he or she is reporting must understand that it won’t work.

Chauncey Bailey was working on a story about the Oakland-based “Your Black Muslim Bakery,” an organization with a history of trying to intimidate journalists through threats of violence. After the murder, Oakland police raided the bakery, arrested seven people and recovered a number of weapons. According to a story in the Oakland Tribune, one of those suspects confessed to killing Bailey, calling himself “a good soldier.”

Not good enough. If this is a war, then the soldiers must understand that you can’t kill a story by killing a journalist. Otherwise, the sword really does become mightier than the pen.

I challenge the Trib — which once employed Bailey and which recently abandoned downtown Oakland in favor of a suburban office tower for financial reasons — to answer Cobb’s call and prove its continued commitment to the community by throwing its diminishing resources at finishing what Bailey started.

In the process, we can find out whether “investigative reporting” at Dean Singleton’s Bay Area newspaper monopoly in the future is going to mean anything more than simply reporting leaks from sources within the police department.

The hilarious and whimsical nameplate above was published Monday along with a story titled “Gutting the Local Paper: Dean Singleton, Tom Honig and the Santa Cruz Sentinel” on the Web site of the Santa Cruz Independent Media Center. The content is all too familiar in cities large and small across the U.S.: Media News Group buys local paper, sells off real estate, eliminates jobs, moves to cheaper digs in the suburbs — what Seinfeld’s Elaine might call the “yada, yada yada of Dean Singleton.”

The acquisition, the article points out, was accompanied by the usual MNG disinformation: The paper will continue to be printed locally … no layoffs are planned … yada, yada, yada.

Mirroring the white flight of the 1960s, Dean Singleton’s abandonment of downtown Santa Cruz comes hard on the heels of his abandonment of downtown Oakland, where the “Trib Tower” now stands as a reminder and a symbol of Media News Group’s lack of any real concern for the cities in which it operates.

It’s a strategy that flies in the face of a half-century tradition established by U.S. newspapers that once really were part of the fabric of their communities. The urban decay that set in during the late 50’s and picked up steam over the next two decades surely would have destroyed many of our cities had it not been for the unflinching support of three institutions that generally refused to join the flight to the suburbs: federal, state and local governments; the headquarters and back offices of banks and other financial institutions; and local newspapers, whose local owners fully understood that a downtown is not only the heart of a city, but its identity as well.

They stuck it out until bottoming-out real estate prices, federal tax incentives and yuppie-led gentrification rescued many American cities from certain death and forged a new urban Renaissance. The importance of all of which appears to completely escape one William Dean Singleton, who never has seen a downtown he wouldn’t abandon if the price were right.

To his credit, I should point out that Dean isn’t anti-downtown; indeed, if he found economic gain from selling a suburban plant and moving to cheaper space in a downtown, he would do that with equal haste. So, residents of Santa Cruz and Oakland and numerous other cities large and small, rest assured: It’s nothing personal.

With Citizen Dean, it never is.

More bombshells fell at the Mercury News today.

First, just before 11 a. m. the Mercury News announced that the California Newspaper Partnership will be opening a “shared services center to provide business support functions to the papers in Northern California.”

Further, according to the email from George Riggs, “The shared services center will be located in San Ramon. Functions to be located there include: Finance, IT, HR, Marketing, online and parts of advertising. CNP anticipates that the transition from the local properties to the shared services center will occur in March 2007.”

Then, at today’s bargaining session with the Guild, the company set a deadline—November 30, 2006—for Mercury News employees to accept a tough contract proposal.

The company proposal outlines dire consequences the Guild work force will likely face if the deadline is not met. But accepting the contract has its own consequences, which are also pretty unpleasant.

The complicated details are below in the emails from George Riggs and Luther Jackson at The Guild.

This is one of the times when my concern for friends and former co-workers is in serious conflict with the part of me that likes to believe he is a “hard head” (hearted?) retired businessman. The conflict I feel is this: If the newspapers now owned by MediaNews in California are going to thrive they must take advantage of the savings that can be realized by combining job functions. This is a simple business proposition. Work that is now being done in two or three places by two or three people can be done less expensively if it is consolidated into one location. The company’s estimates of some of the savings are in the Guild email below.

I doubt that any one feels good about this. I know I don’t, although I am not going to be personally affected. But friends I worked with for two decades are going to face some tough choices. Do they take jobs at the new shared services center or do they find new work outside of the newspaper industry?

The George Riggs email announcement was followed by a series of meeting with people from affected departments. I’ve had reports about a couple of the meetings. A few more details were revealed, but my instinct is that there is a lot more not known than known right now.

The details are very important to the people involved and I will pass them along as they become available.

But there are some things that can be reasonably assumed at this point.

–Wages will be lower for Mercury News employees who are selected for these jobs.
–Their benefits will not be as good as those which have been offered to Mercury News employees.
–People who have been working at the Mercury News will be looking at a commute that is 35/40 minutes longer than they have been dealing with.
–Lots of people—maybe dozens—will be starting new careers in new industries.
–The very difficult situation people at the Mercury News have had to deal with for the last year is going to continues for a long while.

I’ll post new details as I get them.

—–Original Message—–
From: Riggs, George
Sent: Wednesday, November 01, 2006 10:41 AM
To: ALL
Subject: A message from the Publisher
November 1, 2006

Dear Colleagues:

As you know, the Mercury News is part of the California Newspapers Partnership - a company made up of 33 daily and 56 non-daily newspapers jointly owned by MediaNews, Stephens Media and Gannett. Our sister papers in Contra Costa and the ANG group are part of the partnership as well.

Following last Friday’s meeting of the CNP board, today we are announcing a way for CNP to take advantage of potential synergies among its various Northern California properties. CNP is forming a shared services center to provide business support functions to the papers in Northern California.

The shared services center will be located in San Ramon. Functions to be located there include: Finance, IT, HR, Marketing, online and parts of advertising. CNP anticipates that the transition from the local properties to the shared services center will occur in March 2007.

CNP will be encouraging interested employees from the local properties affected, including the Mercury News, Contra Costa and ANG, to apply for positions there. As we get closer to the launch date of this new venture, CNP will keep us posted on application procedures, employee benefits and timing.

Given the business challenges facing the Mercury News and the newspaper industry generally, we believe that the Mercury News needs to be part of this new venture in order to take advantage of potential business synergies and gain needed efficiencies.

As more information about this venture becomes available we will be sharing it with you.

Sincerely,

George Riggs

From: Luther Jackson [mailto:Luther@SJGuild.org]
Sent: Wed 11/1/2006 5:46 PM
To: Mercury News Guild Members; retired Guild Members
Subject: Bargaining Bulletin: News on layoffs, consolidation

San Jose Newspaper Guild Bargaining Bulletin #9

Nov. 1, 2006

For the first time, the company today proposed direct links between layoffs and contract concessions. At the same time, the company introduced the entirely new subject of outsourcing jobs to the CNP San Ramon “shared services center,” which was announced simultaneously by George Riggs to the staff.

The company said that if the Guild accepted all contract concessions by Nov. 30 on health insurance premiums, elimination of the pension plan, loss of accrued vacation, a six-month pay freeze (beginning July 1, 2006), and elimination of most contract language that now reserves Guild work for Guild members, it would reduce the number of previously announced layoffs from 69 Guild members to 42. The company said it could make no assurances that the 27 jobs that would be saved — or any others — would be protected from future layoff.

If all concessions were made, the company would still layoff 10 employees in advertising, three in finance, one IT/PBX, 23 in editorial, two in circulation, two in creative services, and one in production. Layoffs would be announced Dec. 5, effective Dec. 19.

The company said if the Guild agreed to the proposed concessions, the company would achieve annual saving of $828,000 on health care, $360,000 on retirement, $270,000 by freezing wages for six months, and $4.8 million through adoption of ”management rights.” Those management rights would eliminate the rights of Guild members to do to the work they currently do (also known as jurisdiction). The company said it was not ready to explain how elimination of jurisdiction protections would yield $4.8 million in annual savings. The vacation accrual change would amount to a $2.1 million one-time savings for the company.

On the “shared services center,” the company said it intended to eliminate 116 Guild positions in March, broken down as nine from advertising majors; 19 from national; 14 from marketing; two from targeted delivery; 25 from recruitment; two from advertising co-op; 15 from the advertising call center and 30 from finance.

It is important to note that under the jurisdiction language of the current contract, the company cannot outsource this work to non-Guild members.

The company acknowledged that it needed to address these jurisdiction issues through collective bargaining. The company said that if the Guild agreed to its contract proposals, 71 of the 116 jobs would not be eliminated and would remain in San Jose under Guild jurisdiction. In any case, the company said 15 call center and 30 finance jobs would be eliminated and those functions would be shifted to San Ramon.

In total — combining those jobs planned for elimination through the layoffs announced Oct. 20 and the outsourcing announced Tuesday — the company said it planned to eliminate 185 San Jose Newspaper Guild jobs. Of those, if all company contract proposals were accepted, 98 would be preserved in San Jose, though for no fixed period of time.

The next bargaining session is scheduled for Nov 9. Also, on Nov. 9, the Guild will hold membership meetings at 12:30 p.m. and 6:30 p.m. at a location to be announced.

Representing the company were Marshall Anstandig, Andy Huntington and Kathleen Slattery. Representing the Guild were Suzanne Arnaud, Mary Anne Ostrom, Becky Bartindale, Luther Jackson, Barry Witt, Nick Warner and Dennis Uyeno.

I had a number of phone calls and emails about the bombshells dropped at the San Jose Mercury News and Contra Costa Newspapers on Friday.

The Mercury News announced layoffs of up to 101 people and CCN announced that the editor there was “leaving the newspaper” because his position had become redundant. Copies of both announcement memos are below.

One of the most interesting emails was from Stephen Buel (who I think is a former SJMN journalist) of the East Bay Express. He passed on a piece from their online edition about what was going on with Media News in Northern California. It included this comment:

“The announcement (of layoffs at the Mercury News) was seen by employees as a shot across the bow of the unions currently in contract talks with the newspaper.”

The New York Times story below includes a similar comment from Mark Schwanhausser, a reporter at the Mercury News. Mark suggests that the announcement may be a negotiating tact, since the Guild is currently negotiating a new contract.

“We’re trying to separate the scare tactics from the ‘wake up, your industry is imploding’ tactics,” he said. “Negotiations are a poker game. We recognize we have a weaker hand than we’d like, but I don’t want to lose on a bluff.”

I am sure that getting the unions’ attention is part of the reason for this move right now. But I do not think that is the major driver behind this layoff announcement.

My take, and than of several of my far-flung correspondents, is that the layoffs have more to do with the inability of the Mercury News to achieve its profit goals without cutting staff. A couple of people who have direct experience with Dean Singleton tell me that his world is really very simple. He sets the profit goals for his newspapers. He expects the leadership at the newspaper to make the goal. If they cannot make convincing revenue projections that show them making the goal the deficit has to be made up by cutting expenses. If there are not enough non-salary expenses that can be cut jobs have to be eliminated.

Failure is not an option.

The Guild’s response to the layoff announcement is below. It reveals the details of the cuts as follows:

“The Mercury News provided the following breakdown of cuts in Guild positions: editorial (37) advertising (18), finance (4), creative services (3), circulation (3, including one not currently filled), PBX (2), production (1) and marketing (1, currently not filled).

“Non-Guild cuts would include: circulation (7), editorial (4), advertising (3), typographical (3), HR (2), marketing (1) and the remainder in production and IT.”

The Guild’s response so far is quite mild. This may be because the language in the Mercury News Guild contract about layoffs is unusual and gives the company latitude to decide who to layoff. Most union contracts have a very simple formula to decide who gets cut in a layoff—last hired, first fired. But at the Mercury News seniority is only one factor that is considered.

Here is typical language about layoffs from the contract for the Santa Rosa Press Democrat:

ARTICLE XIV - JOB SECURITY
(d) Dismissals to reduce the force shall be imposed in the reverse order of the length of service with the Employer.

Compare that straightforward statement to this from the Mercury News contract:

ARTICLE XIV - SECURITY
(j) Reductions in Force.
The Employer shall notify the Guild in writing of the intention to effect any dismissals for economy reasons, stating the number, classifications and departments of jobs affected, and providing, in such notice, seniority lists showing the employees in the classifications and departments affected, their length of service with the Employer and their length of service in the classification and department. The Employer shall in making discharges for economy reasons, give due consideration to such factors as general competence, qualifications, and ability to do the available work, and consideration will be given to the factor of length of service.

With language like this company is in a position to evaluate every Guild employee, giving weight to all of the factors cited in the contract, to decide who is included in the layoff. The Guild will surely attempt to fight back, but they are not in a strong position.

I have not read the contracts for the press operators, composing, mailroom and various teamsters units at the Mercury News but I suspect they all call for last hired, first fired in the event of layoffs.

A couple of more comments:

I was not aware of how much of its membership the Guild had lost since the last contract was signed. Their membership has gone from 820 to below 500 today. That is nearly a 40% loss. A shrinking newspaper industry and efficiencies gained through technology have not been kind to the Guild.

There have been a couple of comments by Guild officials in San Jose and Philly that they are disappointed that the current owner of their newspapers are acting just like Knight Ridder did, even though the newspapers no longer have to answer to Wall Street.

I am a little surprised that the events of the last year have not sunk in better than this.

Knight Ridder was sold and broken up. The Tribune Company is deciding how much of the company to sell to whom. There has been speculation that the New York Times should sell the Boston Globe, or maybe the whole company. A British financial publication wondered if Gannett would be the next target.

With all of this going on I would have thought that everyone would understand that newspapers are a business and that the owners set the expectations for profit, which are always higher than the workers think they should be.

Here are the memos and media reports cited above.

Friday, October 20, 2006

20 Oct 2006

Statement from the Guild bargaining committee
San Jose Newspaper Guild

From: The Guild Bargaining Committee (Becky Bartindale, Mary Anne Ostrom, Dennis Uyeno, Nick Warner, Barry Witt, Suzanne Arnaud, Darren Carroll and Luther Jackson)

This is in response to the Mercury News’ warning today that — without sufficient expense reductions — it could eliminate 101 positions by December 19. Of those, 69 would be Guild-covered positions, according to the paper.

The Guild Bargaining Committee is certainly aware of the economic situation of the paper and the industry. Over the past two months, we have been negotiating with the Mercury News to achieve a contract settlement that makes it possible to continue attracting and retaining top-notch employees while helping the paper prosper.

That said, we are very concerned about the impact of further cuts on our members and their families as well as the paper itself. Such reductions will make it very difficult for the Mercury News to provide our readers, advertisers and the entire community with the quality newspaper and website they expect. Without a quality product to sell, future revenue growth will never be achieved.

We are disappointed that MediaNews, a private company, is falling into the same trap as Knight Ridder, reacting precipitously to quarterly results by taking steps that will further diminish our newspaper.

Since 2000, Guild membership ranks have dropped from 820 to below 500 today. If these reductions went through, the newsroom will have dropped in one year from about 350 to about 240.

The Mercury News provided the following breakdown of cuts in Guild positions: editorial (37) advertising (18), finance (4), creative services (3), circulation (3, including one not currently filled), PBX (2), production (1) and marketing (1, currently not filled).

Non-Guild cuts would include: circulation (7), editorial (4), advertising (3), typographical (3), HR (2), marketing (1) and the remainder in production and IT.

Please be assured that we will work together to achieve a contract that supports you and your families and continues to make the Mercury News an attractive buy for readers and advertisers.

As always, we are available to meet with Guild members individually or in mobilizer groups.

From the East Bay Express
October 20, 2006
Firing at CoCo Times; Layoffs at Merc

If there are any lingering doubts that the new owner of virtually every major East Bay and South Bay newspaper intends to radically remake its properties, Friday’s news should change that. Contra Costa Times Editor Chris Lopez was relieved of his duties in a move related to the merger of the Times into the family of papers that includes the Oakland Tribune, Tri-Valley Herald, Argus of Fremont, and Daily Review of Hayward. Executive Editor Kevin Keane will assume his duties. Far more significant was the news from out of the sister San Jose Mercury News, where publisher George Riggs alerted his staff that 101 employees will be laid off sixty days from now. The announcement was seen by employees as a shot across the bow of the unions currently in contract talks with the newspaper. On the heels of other recent announcements, the developments seem to herald a significant downsizing across many or all of the company’s dozens of Bay Area papers.

Company employees, speaking under the promise of anonymity, see the layoffs at the Merc as the likely first act to a similar reduction in force at the Times and possibly also the company’s long-time East Bay papers. “The general feeling around here is that the hammer is coming down here soon too,” said one ANG employee. Indeed, Riggs, in his memo, warned archly of “continued declines in revenue” that these days afflict most daily newspapers and many other old media properties.

Article continues at length on the East Bay Express website.

From the New York Times
October 21, 2006
3 Former Knight Ridder Newspapers Plan Layoffs and Other Staff Reductions
By KATHARINE Q. SEELYE

The new owners of three former Knight Ridder newspapers announced layoffs, expected layoffs and abrupt changes in management yesterday as they painted a bleak outlook for the newspaper industry.

The San Jose Mercury News said it planned to lay off 101 people from its work force of 1,260 employees. The cuts are to include 40 workers from the 280-member newsroom. …

… Mark Schwanhausser, 47, a reporter who has worked at the Mercury News for 24 years, said that previous job cuts at the paper were made through buyouts, not involuntary layoffs. He said he thought such layoffs were inevitable because Mr. Singleton has been eager to move his newspapers away from print and toward the Internet and because no one had figured out how to sustain a print staff on the small revenues from the Internet.

Still, he said, some people questioned the timing of yesterday’s announcement.

“We’re trying to separate the scare tactics from the ‘wake up, your industry is imploding’ tactics,” he said. “Negotiations are a poker game. We recognize we have a weaker hand than we’d like, but I don’t want to lose on a bluff.”

Story continues at length on the New York Times website.

The announcement email from the Mercury News

From: Riggs, George
Sent: Friday, October 20, 2006 1:11 PM
To: ALL
Subject: Staff Reductions

October 20, 2006

Dear Colleagues

A few weeks ago, I wrote to everyone about the challenges our business faces, both over the past six years and going forward. Since then, our business outlook has worsened and we have completed our budgeting process. Given continued declines in revenue, we need to reduce expenses significantly, and thus have no alternative but to implement a reduction in work force.

We plan on eliminating 101 positions by December 19th. The process of identifying individual employees subject to layoff is not yet complete. Under California law, if an employer lays off fifty or more employees within a thirty day period, it is required to provide the affected employees with sixty days advance notice of the layoff. This is known as a “WARN notice.” Since our planned reduction involves more than fifty employees, we are providing employees who may potentially be affected with the required WARN notice. Please understand that employees who are potentially affected include all employees in those departments where layoffs are necessary. However, not every potentially affected employee receiving the notice will ultimately be subject to layoff. But in order to meet compliance requirements, notice will be given to a larger number than the 101 employees.

There are some things that could favorably impact layoff plans should they occur. Any significant upturn in advertising revenue would, of course, have an impact. We are seeking additional commercial print work, which would also increase revenues. We are working with our production unions (Pressmen, Mailers and Drivers) to be better positioned to accomplish this. Price reductions in newsprint have been rumored recently, and could lead to expense savings should they occur. Lastly, we have three open union contracts we are negotiating (Guild, Composing and Pressmen) and, depending on the outcome, they may also lead to further expense reductions. All of these could reduce the ultimate number of positions eliminated.

I understand the uncertainty these staffing cuts create for everyone, and deeply regret that we have to take this action. Please know that we would not do so unless it was absolutely necessary to ensure the future viability of our newspaper.

Sincerely,

George Riggs

The Contra Costa Newspapers announcement, copied from Romenesko

Topic: Memos Sent to Romenesko
Date/Time: 10/20/2006 5:58:54 PM
Title: Lopez departs as Contra Costa Times editor
Posted By: Jim Romenesko

Subject: ANNOUNCEMENT
Date: Fri, 20 Oct 2006 13:08:01 -0700
From: [Contra Costa Times publisher] John Armstrong
To: [Contra Costa Times staff]

Colleagues:

The single most difficult duty I have is to bid farewell to a valued colleague and friend, and this I must do now. Chris Lopez, a 6 and 1/2-year member of the Times news staff who became editor 23 months ago, is leaving the newspaper. Our executive editor, Kevin Keane, will assume Chris’s day-to-day responsibilities, effective immediately.

As we consolidate the operations of Contra Costa and ANG newspapers in the Bay Area, there are some positions that become redundant, and, unfortunately for Chris, his is one of those positions. In better times, we might have found a way to ignore an extra position or two or even three. But given the serious revenue pressures all newspapers are facing, about which I wrote to you this week, we cannot afford any redundancy, especially at the senior management level.

Chris has been a superb editor. When he succeeded me as editor nearlytwo years ago, we talked about pushing on investigative reporting and community coverage and involvement, and he and the news staff delivered in spades. I am indebted to him for the energy and dedication he brought to his service as editor.

Please join me in wishing Chris, MaryAnne, Katie and Eva every happiness in the years ahead.

Fortunately, Kevin Keane is well suited to assume the reins at the Times. Twenty four years ago he began his journalism career as a reporter in the Philadelphia area. He has served MediaNews as an editor for nine years, most recently as VP of News for ANG Newspapers.

I know I can count on all of you to give your full support to Kevin.

For those of you in the newsroom who would like to ask questions of Kevin and me, we will be available in Room 202 at 4 p.m. today.

John Armstrong

If you are looking for my observations on the final Knight Ridder annual meeting please scroll down. That post is immediately below.

Patrick Mattimore, a San Francisco attorney who has written commentary in the past for Grade the News, has asked me some questions in a comment on my previous post. I wanted to be able to provide links in some of my answers so I am using a separate post to respond.

His questions are in boldface.

1. You wrote that some people are clearing out their offices. Did McClatchy fire staff? What kind of numbers are we talking about?

There is a probably a thin semantic line here but I do not think McClatchy has fired any Knight Ridder employees. Instead, McClatchy bought Knight Ridder and chose not to offer jobs to almost the entire corporate staff. The corporate staff’s old employer no longer exists so there is no longer anyone left to issue them paychecks or pay their infrastructure costs. Their jobs were elminated

There are a couple of exceptions:

According to Editor and Publisher “only Tony Ridder, chairman and CEO of Knight Ridder, and an administrative assistant will maintain an office in the building for another month.”

Also, Margaret Randazzo, a member of the Knight Ridder Corporate staff, has been named publisher at the Modesto Bee. According to the Bee she is “a certified public accountant, she has spent most of her career as a financial officer with Knight Ridder and at its daily newspaper in Texas, the Fort Worth Star-Telegram.”

I do not know how many people were on the corporate staff.

2. As I look at today’s MN (Wed.) it is virtually indistinguishable from yesterday’s product. What does the sale mean in day-to-day terms for readers?

The changes between the Tuesday Mercury News and Wednesday Mercury News were very small. All I could see was that the Knight Ridder logo had disappeared from the color density bar on the bottom of the front page and from the masthead.

I would not expect many changes between now and the time the sale of the Mercury News to MediaNews is completed. There may be the occasional “McClatchy News Service” story in the paper but that will be about it.

My opinion is that McClatchy does not want to invest any management time in the papers it is selling. San Jose and the others will be largely left alone to operate as they see fit, within normal financial budget constraints.

Even after the MediaNews sale is complete I would not expect immediate, wholesale changes.

It will take a while for Singleton’s operation to swallow this large of an acquisition. Also, all of the MediaNews folks I talk to say that Singleton is sincere about allowing the local papers to operate with considerable autonomy.

The changes will come after the Mercury News and other papers MediaNews has acquired face their first financial budgets. Under Knight Ridder the Mercury News operating profit this budget year would have been about $20 million. If Singleton demands an immediate increase in that number—to $25 million or more—then the newspapers will have to use their local autonomy to figure out how to achieve that goal.

If that happens the clustering of editorial and business function that many have feared will happen quickly.

Also, the quality of the content of the newspapers will go down and newshole is likely to be greatly reduced.

For instance, the six-page Sunday Perspective section could be eliminated and replaced with an editorial page and op-ed page in another section. This would save a couple of hundred thousand a year in newsprint. Also, if four pages a week were eliminated there would be savings in copyediting shifts and probably in freelance expenses.

3. Is this different than say the sale of a baseball franchise to new owners? How?

I am not a sports fan and I am not sure what happens when a baseball franchise is sold. But, from a business perspective, this sale is a lot like the sale of Kmart to Sears. One company bought out another one; kept some of the properties, sold some others; kept most people at the store level and got rid of most of the people at the corporate level.

4. What will be happening to the KR San Jose offices?
The corporate staff was supposed to be out of them by “close of market” yesterday. That is 1 p. m. PDT, although I am told people were given until 4 p. m. local time to clear out.

According to the Mercury News the Knight Ridder sign will stay up for now, until new tenants take the space.

People told me at the final annual meeting Monday that they have seen potential tenants inspecting the space. The Knight Ridder office space is valuable real estate and is likely to fill up quickly.

5. Translating the only slightly improved position of the stock from the time PCM demanded the sale, what was the point of this?

It depends on which spinmeister you believe. Bruce Sherman from PCM says he hit a single. He claims to be satisfied since the final value of the deal was a higher price per share than the KRI value a year ago.

There are at least some observers who don’t buy it, including me. I am told Sherman thought the company would sell for a price of more than $70 a share. If that was his goal he hit a blooper to the infield.

Also, he ended up with over 6 million shares of McClatchy and has to hope Gary Pruitt can deliver a healthy increase in share value. Sherman has been criticized for owning too much newspaper stock. Forcing the sale of Knight Ridder did not reduce his newspaper holdings by much.

6. Was I reading this right? That the sale went through 80.1% and needed 80%. If so, why wasn’t there a push at some point to resist this? I’m no math genius but why can the Tribune Company apparently resist a push from Chandler but it wasn’t done in this case?

You read it the same way I did and this is the toughest question you asked.

Tony Ridder has repeatedly maintained that it was not possible to fight the demand that the company be sold. He and the board had already bought back shares, gotten rid of the Detroit Free Press and taken some other steps to drive margins. But that was not enough to satisfy Bruce Sherman and PCM.

Because the dissident share holders (lead by Sherman) controlled a majority of the shares, Tony says, they could have elect people to the board and taken control of the company. If that happened, he said Monday, this could have resulted in the share holders not receiving a “change of control premium” for their stock.

All that is true, but there was another possibility. Tony and others at the top of Knight Ridder could have borrowed the billions necessary and done a leveraged buyout of the company.

This leveraged buyout was one of the options discussed in the Morgan Stanley review (by Douglas Arthur) of Knight Ridder’s situation last November. Their view of an LBO was favorable, although not wildly so.

Beyond this, I have not read or heard much of anything about a LBO.

One of my far-flung correspondents has maintained that none of the senior people in Knight Ridder have enough passion to lead an LBO effort.

My own view is that an LBO would have required unpleasant decisions, like those made by McClatchy to sell of some of the newspapers. I do not believe anyone at Knight Ridder Corporate was prepared to make those kinds of decisions.