Posted on 12/28/2007 2:04:03 PM PST by abb
Seattle Times Publisher and Chief Executive Frank Blethen painted a dark picture of the newspaper's near-term future in a year-end memo sent Thursday to staff members, hinting at deep cuts without mentioning layoffs.
"The past several weeks your senior leadership group has been engaged in the most difficult and painful downsizing this company has experienced," he wrote.
"Until now we've been able to minimize some of the harm from the decade's downsizing. But, with the company at bare bones, these cuts will hurt deeply going into 2008 and the remainder of the decade."
Blethen said nothing specific about cost-saving measures The Times Co. may take. But in a Dec. 21 e-mail to members of the Pacific Northwest Newspaper Guild, which represents most of the editorial employees at The Times and the Seattle P-I, the union reported "speculation" about such measures.
That e-mail said Guild members were reporting to the Guild that The Times' East and North news bureaus would be consolidated into office space at the papers' shared Bothell printing plant, and that The Times' South King County and Washington, D.C., bureaus may be closed.
Larger and fewer newspaper-delivery routes may enable staff cuts, the union's e-mail said. And the Teamsters have said they plan to meet with Times management to consider a Times proposal to outsource all deliveries.
Times spokeswoman Corey Digiacinto said Thursday that the 2008 budget and "associated decisions" are still being finalized and that no announcements are likely until early 2008.
Thursday's five-page memo "is the first shoe, and the other will be dropping soon," said Guild administrative officer Liz Brown. She said that The Times' 2008 budget will likely be presented to the board of directors when it meets Jan. 17, and that any cuts will likely occur after that.
P-I Editor and Publisher Roger Oglesby said Blethen is "taking the appropriate measures." He acknowledged that nonnewsroom expense cuts made at The Times "very directly" affect the operation of the P-I, under the joint operating agreement that has governed the papers' business relationship since 1983.
"If you lose revenue, you have to do something to make up for it on the expense side," Oglesby said.
He said privately held Hearst Corp. does not release revenue figures. At the P-I, he added, "we've been trying to make expense cuts for some time, and we'll continue to do so."
P-I Managing Editor David McCumber said the P-I is routinely leaving job vacancies unfilled, cutting back on travel and selectively reducing the paper's size, all with an eye toward saving money.
"The economy is its own challenge and the state of our industry is another," he said. "The combination means it makes sense to be judicious about expenses."
Yoko Kuramoto-Eidsmoe, a Times features copy editor who is president of the Guild, said of Blethen's memo, "It sounds pretty bleak, but not really surprising given what's going on in the industry."
She continued: "Some people think it will affect the newsroom, some don't. It's encouraging Frank continues to be committed to good journalism, but who knows how much good journalism the company will decide it can afford?"
In his e-mail, Blethen said revenue from print ads will be down by about 9 percent in 2007, with a similar decline expected in 2008. For combined 2007 and 2008, print revenue losses will be about $33 million, he said.
In 2000, the paper booked $270 million in ad revenue, while in 2007, it fell below $200 million, he said.
"Our Seattle Times newspaper losses for the decade will exceed $40 million -- a staggering number," he wrote.
The publisher's senior leadership group has "found reductions of about $21 million" and needs to cut an additional $6 million "to ensure stability next year," Blethen said. Even saving $27 million "leaves a significant gap with the revenue losses," he said.
But, he said, if The Times can adjust to lower revenues, "I believe we are on our way to creating the metro newspaper model of the future."
That newspaper would appear in print and online, offering news, information and advertising, he said. Though online ad revenue is essential, it now equals only about 10 percent of The Times' print revenue, he said.
Blethen noted that the McClatchy Co., which owns 49.5 percent of the controlling stock of The Times Co., has twice written down the value of that holding.
The shares were valued at "well over $200 million" when the Sacramento, Calif.-based company acquired them through its $4.1 billion purchase of Knight Ridder Inc. in June 2006, he said. They were valued at "only $19 million" last month, he said.
Still, the Blethen family remains committed to journalism, he said. He laid out a 10-year plan calling first for a transformation from "the failing metro newspaper model," then for the "final hand-off" of the paper to the next generation, and finally to beginning to "grow value again" in 2017.
Frank Blethen's memo to staff To: Seattle Times Employees
From: Frank
Date: December 27, 2007
Subject: Publisher Year-End Message
Most of you read the industry press, so it should be no surprise that the economic model which has been the basis for the modern-day metropolitan newspapers is imploding.
snip
http://seattletimes.nwsource.com/html/businesstechnology/2004095833_newspaper28.html
Somber memo warns of cuts ahead for Times
By Kristi Heim
Seattle Times business reporter
The Seattle Times faces “the most difficult and painful downsizing” in its history next year as millions of advertising dollars continue shifting to the Web, Times Publisher Frank Blethen told employees Thursday in an unusually blunt internal memo.
Mirroring declines at newspapers across the country, The Times expects to see its print revenue drop a total of $33 million for the years 2007 and 2008, Blethen wrote.
Senior executives have found ways to shave $21 million in costs for the coming year, but another $6 million in expenses will have to be cut, the memo said. Blethen did not say how those cuts would be achieved.
“With the company at bare bones, these cuts will hurt deeply going into 2008 and the remainder of the decade,” he wrote.
Despite the financial challenges, Blethen wrote, his family is committed to continuing its ownership role.
The options are selling the paper, closing its doors or transforming the business “to a smaller, more focused organization. ... “
“For better or worse, my family has chosen door number three,” he wrote.
Times spokeswoman Corey Digiacinto said next year’s budget decisions are still being finalized and no details would be announced until after the first of the year.
“There will likely be some difficult cuts, but this is a temporary situation until we can realign our business model to match the changing revenue picture,” she said.
Blethen said he would not comment on a message intended only for Times employees.
snip
ping
They might consider not publishing a quotation from Chairman Mao on their editorial page every day.
LOL! HAHAHAH. Yeah, temporary readjustment to changing revenue pictures! BAWAHaHA Right!
Look Mom, I’ve learned how to say nothing at all, while lying through my teeth.
Aren’t you so proud of me, Mom?
“There will likely be some difficult cuts, but this is a temporary situation until we can realign our business model to match the changing revenue picture,” she said.
It just spells “doom” so well.
Are they going to stop giving their staff free crack?
Blethen Memo Warns Of “Painful Downsizing” In 2008
Frank Blethen
By Joe Strupp
Published: December 28, 2007 10:25 AM ET
NEW YORK In what The Seattle Times described as “an unusually blunt internal memo,” Publisher Frank Blethen told employees that the paper faced its “most difficult and painful downsizing” in history as a result of print revenue loses expected to reach $33 million for 2007 and 2008, the paper reported, adding that he blamed the downturn on ad dollars shifting to the Web.
“With the company at bare bones, these cuts will hurt deeply going into 2008 and the remainder of the decade,” Blethen wrote. The paper added that, “senior executives have found ways to shave $21 million in costs for the coming year, but another $6 million in expenses will have to be cut, the memo said. Blethen did not say how those cuts would be achieved.”
But the Times stated that Blethen was committed to maintaining ownership of the paper, the flagship of his family’s media company. His memo said that his options included “selling the paper, closing its doors or transforming the business ‘to a smaller, more focused organization... For better or worse, my family has chosen door number three,” he wrote.
Times spokeswoman Corey Digiacinto told the paper that next year’s budget changes were still being finalized and details would not be announced until early 2008.
“There will likely be some difficult cuts, but this is a temporary situation until we can realign our business model to match the changing revenue picture,” she told the paper.
Blethen’s memo followed one last week from the Pacific Northwest Newspaper Guild, the paper’s largest union, that raised questions “of content and staff cuts in a message to its members.”
The paper reported that the guild said members were hearing cuts being considered “include consolidation of the East and North news bureaus into office space at the Bothell printing plant, as well as potential elimination of the South King County and Washington, D.C., news bureaus.”
The Guild, facing an expired contract next year, said on its Web site Thursday that Blethen’s message “is no doubt a way of preparing the troops for operational and content changes.”
The Times’ reported that “revenue from print advertising will fall below $200 million for 2007, down 9 percent from 2006, Blethen’s memo said. It added that he expects a similar decline next year. Print advertising is the main source of revenue for major newspapers.”
“The continual drop in print-ad revenue ‘has had the most dramatically negative impact on the value of newspapers and potentially their economic viability since the Depression,’” the paper quoted Blethen’s memo as saying.
The Blethens own 50.5% of The Seattle Times Co., while McClatchy Newspapers owns 49.5%.
“Blethen said he anticipated a ‘difficult and radical transformation’ to a more nimble organization that provides print and online news, information and advertising based on a foundation of journalism and community service,” the paper reported, adding he stressed, “We must adapt or die and it isn’t an easy challenge.”
Joe Strupp (jstrupp@editorandpublisher.com) is a senior editor at E&P.
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Why not downsize the senior leadership group?
They should write more stories daily about illegal immigrants, gay rights and slam America whenever possible..er...nevermind....
Then they deserve to die.
Other than no more soy milk in the latte's for the staff...
Off to SD in CA with girlfriend....be back on board next year
Waaaahooooo
Just a wild guess but I suspect the American patriots in Seattle got fed up with the Seattle Times BS and they're not buying the rag.
And, you'd think the other liberal rags would take the hint... cease and desist with the spun story telling...But alas they won't and I'll be cheering from the sidelines as they too go down in flames.
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