Jan 20, 2010

Bankruptcies could make strange bedfellows in L.A.

Last Friday, Dean Singleton's MediaNews Group sent out a press release that said the company would file for bankruptcy. The message included reassuring language about the future and promises that the company's newspapers would be shielded from any fallout.

Such promises came up hollow since most of the company's collapsing bottom line has already demolished its newsrooms. But assuming Singleton holds to his pledge and closes no papers and cuts no jobs as a direct result of the bankruptcy, the future remains uncertain for MediaNews.

In trying to divine what it all means, media observers focused their attention on a couple of paragraphs in the Wall Street Journal's story about the bankruptcy:
...Mr. Singleton said he wanted to be aggressive in merging newspapers.

People in the industry have pointed to MediaNews's paper in St. Paul and the Star Tribune in Minneapolis as potential candidates for a combination, as well as to adjacent papers in Southern California published by MediaNews, MediaNews Group Co. and MediaNews Group Inc.

The media site FishbowlLA reasoned that this merging would inevitably lead to more layoffs:
It's hard to imagine how merging any of MediaNews's Southern California papers won't result in lost jobs - and a reduction of local coverage. Perhaps Mr. Singleton has a more active imagination than the rest of us?
Additional layoffs are always possible. But the fact is, MediaNews has already consolidated most of the operations of its nine Southern California newspapers. It's hard to see where else the company could squeeze. While individual newsrooms exist under different mastheads and in different offices (and fight to remain independent, sometimes to the point of mutual contempt), they're highly interdependent. The Los Angeles Newspaper Group (LANG), as they're collectively called, shares stories, relies on a single copy desk, operates under a board structure, outsources printing, and has almost no redundant beats.

The three papers in the San Gabriel Valley Newspaper Group (aka SGVN) are essentially one newspaper with three zoned editions. While each of the papers has its own news staffs and at least two pages of original content, editorial oversight and business operations are centralized. SGVN, in turn, has a close relationship with the Inland Valley Daily Bulletin, San Bernardino Sun and Redlands Daily Facts. Together, they form the Inland Division of LANG. The other three LANG papers - Los Angeles Daily News, Torrance Daily Breeze and Long Beach Press-Telegram - form LANG's Metro Division.

So what's left to merge? Geography and local advertising warn against a single LANG newspaper or news site. But the bankruptcy could clear away business entanglements leftover from MediaNews's buying sprees. Notice the WSJ article mentions "MediaNews, MediaNews Group Co. and MediaNews Group Inc." This is because MediaNews has different investors for different blocks of newspapers, even with LANG. If the bankruptcy creates a single company, LANG papers might find ways consolidate further - or even partner with other papers.

On this latter point, MediaNews has already made overtures to share limited content with the Orange County Register (which also went bankrupt) and prints several of its papers on the Register's presses. Out in Riverside, the shrinking Press-Enterprise has largely ceded San Bernardino County to the Sun. It wouldn't be out of the realm of possibility for the two papers to cross-pollinate.

A few media analysts have raised the prospect of a deal between MediaNews and the Los Angeles Times. The Times - it's bankrupt, too - has a shrunken newsroom and a smaller vision for itself. This could, theoretically, pave the way for a deal to distribute Times content through MediaNews properties.

Former Daily News editor Ron Kaye:
The only obstacle to the Times taking over the whole LA market and potentially salvaging the existing papers nameplates in localized editions is the U.S. Justice Department and laws against monopolies.
Former Knight Ridder exec Ken Doctor's take:
In L.A., Tribune’s soon-to-be-owners similarly may have little interest in staying the course. Maybe a L.A. combination, involving the Times around lowered-cost, higher-efficiency publishing -- Singleton’s once and future trademark – is the way to go.
Is it possible we've come to the point where rivals end competition and embrace collaboration? At one time, Singleton's papers were seen as stepping stones on the way to a job at a paper like the Times, but times have changed and economic woes have become a greater leveler. Furthermore, bankruptcies have a way of killing ego and the drive to compete, and shrinking papers aren't looking to be dominant anymore - they just want to survive.


Anonymous said...

Singleton and Scudder don't seem to have a penny of their own considerable fortunes at risk. With Singleton, anything is possible. But whatever the outcome, it most likely won't be good for employees.

Anonymous said...

Bank on more layoffs and further bedfellows from former competitors. There are a number of ways to contine shrinking the newsrooms and it win't be good for readers or employees.

What will be left? No competition, and, a vastly diminished informed public. But the fat cats like Singleton, Zell etc won't miss a beat or a meal.

Anonymous said...

readers don't need newspapers. with the supreme court striking down mccain-feingold, they can just get their information directly from lobbyists and corporations!