The morning after

While drunk on big newspaper purchases, Dean Singleton promised competitive papers and no layoffs. Now he's swinging the ax, cutting deals with Hearst, and decimating local news coverage
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gwschulz@sfbg.com
The plight of newspapers is a popular news story these days, from a late-August cover package in the Economist ("Who Killed the Newspaper?") to National Public Radio's On the Media last week ("Best of Times, Worst of Times").
It's usually told as the story of an industry on its deathbed, bleeding from self-inflicted wounds and those delivered by Wall Street, Main Street, Craigslist, and the blogger's laptop. Ad revenues have nose-dived in recent years. Circulation is down nationwide. Journalism scandals and shortcomings have damaged the whole profession's credibility.
And staff newspaper blogs alone won't be enough to bring a new generation of tech-savvy Americans back to hard-copy publications that even smell stodgy and old.
Yet the bottom line is still the bottom line. The truth of the matter is that many publicly traded newspaper companies have healthy profit margins ranging between 15 and 20 percent. But the tendency of the doom and gloom business press to sensationalize bad news may actually make things easier for William "Lean" Dean Singleton, the cost-cutting king of Denver-based MediaNews Group, which recently announced a round of staff reductions at its Bay Area newspapers. The cuts came amid claims of a massive dip in ad income just a few months after Singleton promised that his company's buyout of local newspapers wouldn't diminish the quality or quantity of journalism here.
"Given continued declines in revenue, we need to reduce expenses significantly, and thus have no alternative but to implement a reduction in [the] work force," George Riggs, who was recently appointed to lead the company's Northern California operations, told employees in a memo Oct. 20. Several such memos have now been posted on the Internet.
If this is how quickly the news biz can turn ugly, it's a wonder MediaNews was attracted to print journalism in the first place. Who knows what newspapers around here will look like in another few months? How much fat can they trim before they start hitting bone?
They aren't just cutting staff. The Bay Area's newspaper establishment is now outsourcing work to circumvent those pesky labor unions. The press operators' union at the San Francisco Chronicle — which was the sole union holdout against management's demand for expanded control and decreased benefits — could disappear in three years as a result of a new printing contract with a Canadian company. MediaNews recently announced plans to outsource ad production positions to India.
Consolidation already has amounted to fewer reporters covering individual stories that are distributed to several publications, including at least one story about the latest layoffs. That means fewer editorial perspectives on key public policies (and possibly fewer editorial positions) for readers in a market that's notorious for its high intellectual demand and robust political participation.
Only an ongoing federal Justice Department investigation and a civil lawsuit threaten to slow down big changes going on at the Bay Area dailies. A federal judge ruled just before deadline in real estate mogul Clint Reilly's antitrust claim against the Hearst Corp., publisher of the Chronicle, and MediaNews that for now, at least, the two could not combine circulation and advertising operations to save money.
The companies had secured a court order sealing key records unearthed during discovery, including depositions and exhibits, citing the right to protect confidential trade secrets. It's an ironic move for a group of papers that have regularly sued government agencies for public records and made a great show of their First Amendment pieties.
Federal Judge Susan Illston on Nov. 28 blocked the two companies from merging some advertising and distribution operations, a consolidation she said was probably illegal under antitrust laws. And she sounded her concern that Hearst isn't the "passive equity investor" it had represented itself in court to be.

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