Cashing In

In case you missed it, this little nugget was buried in Tribune's bonus news as reported by the Chicago Tribune: "The Tribune Co.’s publishing division generated $461 million in operating cash flow last year, a margin of 16.7 percent 'during one of the worst years in newspaper advertising history.' ”

Sounds like that's a very respectable figure--considering. Cash flow measures the money or cash companies generate in relation to their sales or revenue to pay expenses. If that's the kind of cash flow margin Tribune's publishing division can generate in a bad year, imagine what it must have been in a good year--20 percent, 25 percent, 30 percent?

Of course, the amount of cash generated is not enough to pay off Tribune's billions of dollars in debt. And we all know that Tribune achieved the nearly 17 percent cash flow margin by rolling lots of heads down the aisle, which freed up cash by reducing expenses.

Considering all the heads that are still being axed, perhaps the cash flow margin for 2009 will hit 20 percent or better?? Banks and creditors are going to love it.

Tribune Asks Court for $13M in Bonus Money

Tribune Co. has asked the bankruptcy court for permission to award $13 million in bonuses to certain employees, even as more newspaper employees are being shown the door across the country, according to a story in the Chicago Tribune.

About 670 managerial employees are to benefit for doing such a great job of escorting people to their cars, with average payments of $18,000.

Payments are expected to total $12.2 million, while another $1 million in bonuses appears to be up in the air.

Meanwhile, another 70 employees may get about $2.5 million in severance payments that is owed to them, which sounds like a decent move.

The Delaware bankruptcy court is expected to rule on the motions during a May 12 court hearing.

I've been thinking more and more that the real pirates are not in Somalia, but here in the United States running the free (hah!) enterprise system.

Read the full post here: http://newsblogs.chicagotribune.com/towerticker/2009/04/.

Spiked

I am heartened by the response to my last meager post. I think many of you may already know who was on the hit list (see below). From what I understand, there is more to come later this year as well.

Writing this blog is getting harder. The bloodletting is huge, and folks can't blame Sam Zell any longer. Zell 'fessed up in an interview posted on Romanesko (http://www.poynter.org/romanesko) last week that he clearly underestimated the extent of the rot in the newspaper business and that the Tribune buyout has been a failure. It's not all Zell's fault. The people running this and many other newspapers are like the captain of the Titanic. Full speed ahead, into the iceberg.

I can no longer abide the "solutions" many news people still cling to, such as charging for content. Forget it, folks. The newspaper industry had a chance years ago to pool resources and aggregate content and it chose not to. How's that for vision? Google is not a monster. Google is simply filling a vacuum that new people created.

If newspapers put up a pay wall now, they will get some minor revenue but lose a lot of readers. It's time to come up with something a little more creative and 21st century. Hello! Free is not a bad business model. Many newspapers are free, especially weeklies. They are advertising supported and can be audited like paid subscription. Newspapers have to make "free" work.


Dearly Departed
Jerry Jackson, business reporter
Dave Darling, sports copy editor
Yoon Om, layout editor
Eric Palm, layout editor
Joan Andrews, layout editor
Angelisa Pinkston, layout editor
Karen Saunders, copy editor
Joy Dickinson, copy editor, to continue Flashback column
Geoff Nordhoff, wire and copy editor
Andy Goodwin, copy editor
Mary Tindall, copy editor, reporter
Dave Swiderski, copy and wire editor
Steven Ford, copy editor
Kim Calhoun, copy editor
Bonny Shonkwiler, copy editor
David Srinivasan, copy editor
A copy editor who doesn't wish to be named.
Elayne David, copy editor
Terry Godbey, copy editor, 26 years
Nicole Bogdas, layout editor
Helen Eckinger, Lake County reporter
Greg Gammonley, data desk, nice guy
Jay Hamburg, GA and religion reporter
Eleanor Trouse, from library, after 43 years of service
Bill Speros, deputy sports editor
Adam Shiver, sports copy editor
Pete Schreiber, sports copy editor
Robyn Shelton, medical writer, leaving for law school
Jerry Greene, sports columnis, wrote last column last week, after 33 years
David Whitley, sports columnist moving on to aol.com
Lynn Hoppes, associate M.E. in sports, moving to espn.com
Mike Berry, copy editor

Days of Thunder

Folks, there's a lot of chatter taking place over the social airwaves about heads rolling at the Orlando Sentinel this week. One source put the figure at 20 job cuts affecting the copy desk. Frankly, I didn't know there were more than 20 people on the copy desk left. Seems very high, but also somewhat plausible. The Chicago Tribune is cutting about 20 percent of its staff.

Definitely a red letter day for many people at the Sentinel. Best of luck to all.

Heads Roll at the Sentinel

Don't know all the particulars just yet, but I've received several emails stating the Orlando Sentinel has cut more positions. I know that some newsroom veterans have left or are about to leave. Other folks say the copy desk is the target of this round of staff cuts.

Just letting you know the ranks at your hometown paper are getting thinner by the day.

Back to Basics

Chastened by the embarrassing massive layoffs, cutbacks and bankruptcy of the Tribune Co., Sam Zell is returning to his roots--real estate. So states the article in the Wall Street Journal, "Sam Zell Looks to Brazil to Change His Luck."

Zell is poised to become a big player in the affordable housing market in --Brazil. Yes, you read correctly. Brazil. Zell's private equity real estate firm owns a 19 percent stake in Gafisa SA, a Brazilian home builder. Brazil, whose President Inacio Lula da Silva recently blamed the worldwide financial meltdown on "white, blue-eyed people," is banking on white-skinned, white-haired gnome-like Zell to help build 1 million new homes for the country's low-income families.

Zell's Equity International Properties has $1.5 billion invested in warehouses in China and retirement villages in New Zealand. Who knew? However, the company is betting big on Brazil, where it has invested half of its capital. Equity International, which also owns apartments in the United States, has lost more than half its stock value in the past year, which is no surprise considering the real estate funk.

Zell, himself, has lost half of his net worth in the past year. He's down to a mere $3 billion. Everything that Zell touches no longer turns to gold, so we'll have to watch Zell's samba in Brazil to see whether he's lost his touch entirely.

But it sure must make the folks at Tribune feel real secure knowing that the guy who bought the company on a whim, investing just $300 million or so in the $8 billion buyout, has lost interest in his newspaper venture.

Day of Reckoning

Heard there were some more staff cuts at the Orlando Sentinel, but don't know the particulars. It wouldn't surprise me, given that so much has been happening of late in the newspaper industry.

The Miami Herald is about to slash about 19 percent of its staff, and those remaining will take a pay cut and a one-week furlough. Those making less than $50,000 will take a 5 percent cut, while those earning more will see their pay go down 10 percent. I guess it beats not having a job. Meanwhile, no candidate has stepped forward to buy the paper.

The Seattle Post-Intelligencer published its last print edition Tuesday and converted to an online edition only. In the process about 90 percent of the staff was let go. That ought to make eyes pop. If online is about 10 percent of newspaper revenue, then I guess you need only 10 percent of the staff?

I can hear it now: You have to align the staff to the numbers, Maria.

Indeed.

Anybody have more info about how the Sentinel is aligning staff to revenue, please let the rest of us know.

It's Mourning in America

A newspaper died this week. Will anyone notice? Will anybody care?

The Rocky Mountain News shut down Friday, about a month-and-a-half away from its 150th anniversary. It must have been wrenching for the staff. Newspaper people dedicate a lot of time and energy to their jobs. This is a great letdown.

Scripps owned the paper, and I predicted on this blog oh so many posts ago that the company would spike the entire paper, since it had ample precedent.

Scripps earlier closed the paper in its own home town of Cincinnati. What newspaper company does that? One that doesn't put a whole lot of stake in newspapers anymore. Scripps is now into HGTV, which it owns, than into breaking news.

So we can't say we didn't see this one coming. It was in the making for some time, considering the Rocky was in a joint operating agreement before it closed. The JOA often is a prelude to death.

We have another chronicle of a death foretold: It appears the SF Chronicle also is gasping for air, and may close any day now. It's shocking to see the newspaper industry down on its knees like this. The industry was so utterly unprepared for technological changes in news gathering and delivery. We are a long way from Kansas now--and boy do we know it.

This week the American Society of Newspaper Editors canceled its annual conference due to little interest. I'd say this is a good move. It would be hard to justify a junket to (fill in the blank) while editors everywhere are mercilessly axing staff and newspaper content and pages. Why that would have been the newspaper equivalent of auto industry honchos flying to Washington on private jets to beg Congress for money. Only in this case, editors would be wringing their bloody hands over cocktails.

Speaking of which, begging for money--either directly to Congress or in the form of sponsored stories or investigative series-- is what some newspaper companies are weighing.

Bad idea.

I realize these are desperate times, but newspapers are supposed to be free of any outside influence. If newspapers want to have freedom of the press, they have to take it on the chin and find a new business model, one that doesn't depend on sponsorship or government loans of any kind.

What Ever Happened to Shame?

It used to be that when alleged bad people did alleged bad things, you could detect a teensy-weensy bit of shame in their attitude or that of their families: The head held low, the biting of the lips, the inability to look you in the eye.

Oh, how that has changed.

Now, when alleged bad people do alleged bad things they get the 15 minutes of fame (maybe even wealth) that Andy Warhol predicted would be every one's due. Instead of the perp walk, you get the cat walk. Instead of a jail sentence, you get a book contract that, hopefully, will turn into a television movie of the week. And it's not just the alleged perp who's strutting his or her stuff before the world's stage. It's the whole dang family.

I am referring, of course, to the Casey Anthony case. Casey's parents have appeared on major television shows, including "Larry King." We now know that when Caylee's remains were found they stayed at the Ritz Hotel, courtesy of ABC television. Casey's dad cannot even try to commit suicide in private.

And now there's also Haleigh Cummings' father's girlfriend, who didn't waste time appearing on the "Today" show, ostensibly to defend herself or her relatives. When it was announced the little girl was missing, Casey's dad -- all better now -- made a beeline to Satsuma in Putnam County in a show of solidarity.

I have wondered throughout all of this: Doesn't anybody agonize in private anymore? Doesn't anybody close the door and say they would like to be left alone? (This is valid only if attempted before the big-publicity cry for help, before the big-publicity search and rescue effort, before the big-publicity help-me-find-my-missing-child poster and before the daily press conference updates.)

Must the press and television pull back the curtain a la Wizard of Oz each and every time to show the family mayhem and dysfunction? Shouldn't the media do a little pulling back of their own?

Does the press and television always have to work itself into a tizzy about one more missing child, as if other nameless, faceless children do not go missing everyday that are never found and that we never hear about. Why Caylee and not the others? Why Haleigh and not the others? Is anybody still looking for or writing about Trenton Duckett? And why does it seem that these things are happening only in Florida?

The glare of television lights and scribblings in reporter's notebooks have greatly diminished the sense of private agony and sometimes shame that, to my mind, was a lot healthier for the family and the community. It has also diminished the media's sense of credibility.

We are all now under siege from the mutual exploitation society that exists between the parents/relatives of the chosen few missing children and the press and television. Once on the stage, you can't yank these folks off. Once the television ratings, newspaper circulation or online "uniques" soar, you can't get the media to retrench.

We will hear and read about the Casey Anthony case everyday whether there is news to report or not. We will get the daily videotape or photo of the family, lawyers or other folks who weasel their way into the spotlight.

Now, to the delight of the media, we have two such cases. I can see the headline: Haleigh and Caley: What Went Wrong? It's a great stroke of luck for the media that the names happen to rhyme.

I am not unsympathetic to the cause of missing children. I am a mom and I know what I would do if someone tried to harm my child. But I am unsympathetic to the hoopla, hullabaloo and carnival sideshow that has little to do with the cause of missing children.

For the sake of decency and credibility, someone please draw the curtain. Bring back a little shame and embarrassment for the good of the community.

Millions of Trees Saved

No, you didn't imagine that your paper is getting thinner and less newsy.

Newspapers in the United States consumed 16 percent less newsprint in 2008 than the year before. That's 5.2 million tonnes, down from 6.2 million tonnes -- or a clean 1 million tonne, according to an item in Editor and Publisher this week.

The decline in newsprint consumption is accelerating as papers move more content online and cut back on pages and page widths in the paper product. Things may get worse for newspapers, but better for the trees in 2009.

Newsprint use was down nearly 24 percent last December, according to E&P, which cited the Pulp and Paper Products Council. Newsprint companies are reducing output to meet lower demand, which is also good for trees. U.S. paper mills are running at only 80 percent of capacity. Naturally, prices are falling too.

Although the decline of the traditional newspaper business and business model is lamentable, there is always and upside and this is it. Fewer trees will be sacrificed to print newspapers that fewer and fewer people are reading.

That's newspapers 0, Earth 1.