Jan 22, 2011

What's ahead for MediaNews - and what's left behind

In the best of possible worlds, the shakeup at MediaNews that left company president Jody Lodovic without a job and CEO Dean Singleton with a (severely?) diminished role would serve as an object lesson in how moral cheapness leads to downfall; a final judgment on mass consolidations and layoffs divorced from any sense of journalistic mission, ethics or service; karma for all the dedicated journalists told their dedication was a childish distraction, and for all the readers told they must accept lower and lower standards under the same brand name.

But, I doubt such lessons will be learned. There are now two forces at work in MediaNews, and neither of them is reflection. The first will accelerate change, which is inevitable. The second will shape the change, which is worrisome.

The first force results from the removal of Singleton as CEO. The new directors are no less interested in moneymaking than he and no more interested in quality journalism. Yet, they come without the baggage and ego that clouds strategic decision-making.

The second force results from the removal of the baggage and ego that at least served as a check on the most drastic consolidation plans. The new board is not going to try to preserve a newspaper company, as Singleton has. This could be a benefit to innovation, creating a potential for a sane and creative digital strategy (which is sorely lacking in MediaNews). But this also removes a check on pain.

Martin Langeveld, a former MediaNews executive now at Nieman Journalism Lab, has an excellent post about what to expect, and he makes a convincing argument that Singleton no longer much of a hand in in the company:
While Singleton may have ideas for strategic consolidations, without Lodovic he lacks the necessary financial engineering savvy, and without control of the board, he can’t make anything happen. The new title for Singleton looks and feels like a face-saving ambassadorial position.
In other words, it is time to look beyond Lean Dean. He is not the future.

So, who is in charge and what do they want? Alden Global Capital is the group that now has board control of MediaNews, and the investment company has a deep financial interest in a number of other distressed newspaper companies, many of which might be ripe for a leveling consolidation. Again, from Langeveld:
Clearly, Alden is the outfit with the most skin in the game, having investments in MediaNews, Freedom, Philadelphia Media, Journal Register, Freedom, Tribune and Postmedia. (Incidentally, as a further extension of this network, JP Morgan Chase, which has been involved in the Tribune, Freedom and Journal Register reorganizations, is the largest stockholder at Gannett, with a 10.2 percent “passive” investment.)
With all these interrelationships among investors and “distressed” newspaper firms, it’s not hard to see why Dean Singleton might say that achieving some kind of “consolidation” will be a full-time job. Still, it seems unlikely that Singleton will get to pull the strings, when the money behind the interlocking investment structures is controlled by billionaire Randall Smith, Alden’s founder, who built his fortune through investments in junk bonds and distressed properties. Alden acquired most of its newspaper stakes through its Alden Global Distressed Opportunities Fund, which it launched in 2008 and which is now worth nearly $3 billion. Alden has offices in New York, Dallas, Dubai and Mumbai, along with a tax-haven presence on the Channel Island Jersey.
The beginning of the consolidation process is likely to be here in Southern California, with some form of merger between MediaNews Group's Los Angeles Newspaper Group and the Orange County Register, owned by Freedom Communications. But Alden also has a stake in the Tribune Co, which owns the Los Angeles Times. This could lead to a distribution partnership that serves as a basis for mergers in other parts of the country.

Again, Langeveld:
For example, in New England, a combination of MediaNews, Journal Register and Tribune would have properties in Connecticut, Rhode Island and Massachusetts — totaling about 25 percent of circulation in those states, on a par with the current California partnership. On a countrywide basis, the companies in which Alden appears to have a stake and some degree of influence, as detailed above, have about 15 percent of all circulation and if fully merged, would be about 10 percent bigger than the current champion, Gannett.
Hopefully, we'll see more reporting on Randall Smith, the billionaire owner of Alden, and get a sense of where he wants to go.


Anonymous said...

Where Randall Smith wants to go? To the check-out register to cash in. Merge, rip off employees and readers, pocket what can be carved out of the carcass, then move on to the next opportunity in whatever industry this vulture puts his eyes on. There's no mystery here.

Anonymous said...

must be related to current owner with one exception...probably knows how to extract value.

Anonymous said...

Let's set aside the fear and bitterness for a moment and look at it clearly. Why do all of the So Cal papers need their own Natl and Intl News? Why does each paper have to do their own coverage of what amounts to national sports? In fact, except for local news, why do they each need their own separate group of reporters for anything? The same is true with much of advertising. Production can be consolidated much further. This not being a vulture. It's being smart, although it means a lot less jobs. Sorry, that's life.

Anonymous said...

That is called extracting value poster 9:13. You are exactly correct. One newspaper markets are a relic and multiple newspapers with the same management layers, reporters etc are nothing but a wasted expense. None of the local SOcal papers do it well. If printing has been consolidated, so will the rest of the organization. It just makes economic sense.

Anonymous said...

A New World Order, one world currency, one voice, and one big paper for all of Southern California. Together we can.

Anonymous said...

>>Let's set aside the fear and bitterness for a moment and look at it clearly.

You are absolutely right, 9:13 and 4:27.

Please pay my rent by the first of each month. A small stipend for some pork and beans would be appreciated too.

Paypal email: suckyourccks@gmail.com

Anonymous said...

hey there 5:13, shouldn't you be running your ad on craigslist?

if economics are difficult for you to grasp, you most likely need to get a job that can keep you in pork and beans to your content...as far as paying your rent, i am sure you can find like minded individuals to share all of your needs and wants with.

Anonymous said...

There should be a rule about management not being able to post on Reporter-G.

Anonymous said...

Wow, a mind reader too.