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.

Dead trees still rule

Most newspaper readers still prefer paper over computer screens. Martin Langeveld updates a study he completed last year and finds that of the total time people spend reading papers, 95.4 percent of it takes place with the paper in hand and 4.6 percent is online.

From his post at Nieman Journalism Lab:

U.S. newspapers have not pushed much of their audience to their websites, nor have they followed the migration of their readership to the web. Their combined print and online readership metrics, whether measured in pageviews or in time spent, show that there’s been significant attrition since last year in the total audience for newspaper content, and that the fraction of that audience consuming newspaper content online remains in the low-to-mid single digits.

The bad news is that people are spending less time with newspapers. Langeveld calculates that readers are spending about one-fifth less time with a paper this year compared to two years ago.

The news we could use

The vast majority of time we spend reading the news newspapers produce is done with an actual newspaper in our hands. Martin Langeveld at Nieman did the math:

All generally accepted truths notwithstanding, more than 96 percent of newspaper reading is still done in the print editions, and the online share of the newspaper audience attention is only a bit more than 3 percent.

This comports with an earlier study of online reading habits done by Web researcher Jakob Nielson that shows how little reading we actually do while we surf:

In the eye-tracking test, only one in six subjects read Web pages linearly, sentence by sentence. The rest jumped around chasing keywords, bullet points, visuals, and color and typeface variations. In another experiment on how people read e-newsletters, informational e-mail messages, and news feeds, Nielsen exclaimed, "'Reading' is not even the right word." The subjects usually read only the first two words in headlines, and they ignored the introductory sections. They wanted the "nut" and nothing else.

None of this is necessarily good news for the printed newspaper - fewer words and more shiny graphics is a recipe for cost savings and layoffs. However, we shouldn't ignore the rough parallel here between the time people spend reading content and the amount of money advertisers are willing to pay for ads.

I've argued before that the best thing that can happen to newspapers, as content migrates online, is for society to educate itself on how to use the Internet to read. Rather than passively accepting fads, fetishes and distractions, we should take an active role in the design of online news so that it encourages people to delve deeper - to concentrate and contemplate. News organizations can help themselves in the long run by experimenting with layouts that draw people into stories, rather give in to the temptation to cover Web pages with cheap, flashy graphics and stories designed to up the hit counts (or the temptation export these wrongheaded techniques to the print edition).

After all, you are what you publish.