From BANG to LANG?

MediaNews Group's decision to merge its 12 Bay Area newspapers into three has led to speculation that the company could do something similar with its nine Southern California papers, collectively known as the Los Angeles Newspaper Group.

I can only speculate myself, but I see the potential for structural mimicry if MediaNews succeeds in its stalled bid to buy the Orange County Register.

With the Register, LANG would look more like the Bay Area News Group did before yesterday's merger, with the Register playing the role of the Mercury News: a large paper with a statewide brand in a relatively affluent county that could serve as an editorial center of gravity for a larger region. The LANG papers already exist as three clusters of three, a structure that could be collapsed into two or three newspapers.

However, MediaNews would have to have a reason to further consolidate LANG. One obvious reason would be a desire to cut staff to lower costs - the BANG merger led to 120 layoffs. I might be wrong, but I think LANG was already leaner than BANG in terms of staff and so might not be able to stand such a huge "streamlining." (Indeed, the Register itself might be more vulnerable if cuts are a priority.)

Another reason could be that MediaNews actually believes the BANG model is more efficient and effective: Fewer brand names, a more uniform editorial approach, better positioning to do mobile, etc.

One reason MediaNews might leave LANG alone, even after a Register deal, would be to give it time to evaluate the Bay Area merger to see what works and what doesn't. Undoubtedly, there will be backlash from readers and circulation will probably drop (though the consolidation will mask some of this). But this feels like a post-print production plan and so BANG might be the guinea pig that gets isolated and studied until it recovers - or doesn't.

Stalled negotiations in bid for OC Register stall again

Europe is always doing something. And this time, that something is being blamed for delaying the sale of the Orange County Register.

According to the Wall Street Journal, MediaNews Group's $350 million bid to buy the Register and the rest of Freedom Communications's newspaper holdings stalled because of instability in the markets caused by the European debt crisis.

Talks stalled earlier this year over price, but apparently MediaNews, through a number of cost-cutting actions, offered enough money to get Freedom on board. The Journal says talks might resume in a few weeks, if the markets calm down a bit.

LA Times cutbacks, papers for sale, and other speculation

I'm told a memo was circulated this weekend among Los Angeles Times staffers asking for volunteers to take buyouts as a way to lessen or avoid layoffs at the paper.

The Chicago Tribune, the Times's sister paper, laid off 20 people on Friday, "many of them" from the newsroom, WBEZ reported.

Times employees are in a state of anxiety, as LA Observed pointed out last week, as rumors of layoffs swirl amid continued efforts by owner Tribune Co. to crawl out of bankruptcy. Investors are impatient and layoffs are a quick way to improve the financial picture in the short term.

So, is this about boosting profits and satisfying debt holders? Or should we believe the Wall Street Journal's speculation that the Times could be being readied for sale - with a smaller payroll making for a more attractive sales price?

And since we're speculating... Could the Tribune be raising cash as a way to up its bid for the Orange County Register? The Register's publisher announced Friday that he'll at the end of September, which would indicate a deal is in the works. MediaNews Group had emerged as the top bidder for the paper, but negotiations broke down last month. This was followed by a flurry of layoffs in MediaNews's Southern California newspapers - a sign the chain is looking to up its ante.

MediaNews acquires another newspaper - no, not that one

MediaNews Group is still in the merger business. The Denver-based newspaper chain has acquired The Gardner News, a family owned newspaper that circulates in central Massachusetts and southern New Hampshire. Terms of the deal are confidential.

MediaNews is the leading contender to buy the Orange County Register, though talks between MediaNews and Register-owner Freedom Communications recently stalled over price.

Merger talks between MediaNews and OC Register break down

A disagreement over price has stalled merger talks between MediaNews Group and the Orange County Register. MediaNews, which owns nine newspapers in Southern California, had put together a financed deal to buy the Orange County newspaper, but Register owner Freedom Communications wants a better offer for its flagship property, the Wall Street Journal reports.

Freedom owns eight television stations and more than 100 daily and weekly papers, according to the Journal. It's probable MediaNews only wants the newspapers - and possibly only the Register - and that could mean Freedom wants more time to negotiate better deals for the remainder of its assets.

It's also possible bids from Platinum Equity, which owns the San Diego Union-Tribune, or Los Angeles Times-owner Tribune Co., might have given Freedom a new sense of its value. However, regulatory hurdles stand in the way of any merger with these companies.

From the Journal:

A March deadline for bids on Freedom's assets came and went before the unsuccessful discussions with MediaNews. Freedom is now in talks with other possible buyers, the people said. 

-snip- 

People familiar with Freedom's finances said the company's newspapers could fetch about $350 million, or roughly four times their earnings before interest, taxes, depreciation and amortization. Freedom's television stations could be worth about $400 million, or about eight times such earnings, these people said. 

Those figures fail to take into account corporate overhead expenses, and pension and tax liabilities, said some people familiar with the negotiations.

More furloughs for LANG

LANG employees will have to endure yet another round of furloughs. Fred Hamilton, CEO and publisher of the nine-newspaper chain, sent a memo today telling employees that they must take 5 unpaid furlough days between May 16 and July 2. LANGers will also stop accruing vacation between these dates.

For Hamilton to hastily order furloughs to be taken over such a short period of time indicates just how much pressure the company must be under to boost its bottom line before the end of the fiscal year (June 30). Indeed, Hamilton says in the same memo that LANG employees will be able to take an additional 5 paid holidays in the next fiscal year to make up for the short-term pain.

This leads me to wonder if this dramatic, last-minute action is related to a possible deal to buy the Orange County Register. LANG's parent company, MediaNews Group, is in a bidding war with the Tribune Co., owner of the Los Angeles Times, to buy the Register.

It's also likely the chain is simply trying avoid further layoffs, given the revenue demands of some of its investor owners, who agreed to swallow $765 million of debt as MediaNews emerged from bankruptcy last year. The furloughs and vacation freeze come a week after layoffs at the Long Beach Press-Telegram. Hamilton said the latest actions should keep future pink slips to a trickle:

...today's action does not preclude other cost reduction measures including and not limited to reductions-in-force. At this time such actions will likely be limited and will continue to be an expense reduction alternative until the economy and our performance measurably improves.

As expressed in the past, we regret any inconvenience this action may cause you but until our financial challenges are clearly behind us, such actions are necessary.

The full memo is here.

(This post was edited)

Awards

The Las Vegas Sun's "Do No Harm" series, written by former Pasadena Star-News reporter Marshall Allen and Alex Richards, won the best investigative reporting award from the Scripps Howard Foundation.     The Los Angeles Times won the public service award for its "Grading the Teachers" series, and USC journalism professor Joe Saltzman won teacher of the year.

The Society of American Business Writers and Editors awarded the Orange County Register two top honors: "Immigrants and the California Economy" won for explanatory reporting and "Reversal of Fortunes" won best feature. The Sun "Do No Harm" series won for investigative reporting here as well.

Bidding deadline for Freedom Communications approaches

Bids to buy Freedom Communications, the publisher of the Orange County Register, are due by tomorrow, the Wall Street Journal reports.

Bids for assets of the Irvine, Calif., media company, which owns the Register as well as other newspapers and local television stations, are due Thursday, the people said. Possible bidders include Denver Post publisher MediaNews Group Inc.; Tribune Co.; Gores Group; and Platinum Equity, owner of the San Diego Union Tribune, these people said.

-snip-

It remained unclear what prospective bidders might offer for Freedom's assets and which pieces each might pursue. The entire company won't likely fetch more than $1 billion, said people familiar with the matter.

Possible layoffs in Orange County (updated*)

I'm told the Orange County Register laid off at least one newsroom employee, a photographer, yesterday and LA Observed has reported that buyouts and possible layoffs were brought up at the paper's staff meeting Thursday. I'm also told that bought-out employees are being asked to sign an agreement not to go work for competing media outlets. More when/if I get it.

*Update: Here's a posting on sportsjournalist.com that appears to explain what happened at the Register. Boiled down, nine laid off from the newsroom:

The ax dropped at The Orange County Register again on Thursday as nine associates in the newsroom were laid off. Another six from elsewhere in the building are expected to be let go in the near future. 

Sports was hammered, losing three -- two writers and one copy editor -- Curtis Zupke (Ducks, golf), Chris Tobolski (preps) and Alan Petersen (copy desk). 

The other six were a photog, news copy editor, advertorial writer, two Web editors and another desk editor who already announced his upcoming retirement. 

Layoffs were solely OCR, not Freedom-wide. Apparently there is a rumor that the OCR newsroom was the second largest in the state, behind only the L.A. Times and ahead of bigger papers in San Diego and the Bay Area. So corporate slashed based on that.

There's nothing said about a non-compete agreement.

Times media critic talks about possible SoCal media mergers

Los Angeles Times media critic James Rainey looks at the various merger options before the owners of Southern California's newspapers, as the currently bankrupt and recently bankrupt look for ways to hook up to save money.

The chase seems to center on Freedom Communications, owner of the Orange County Register, which has put itself on the market. Most of the hedge-fund money is on the Register merging with MediaNews Group, also recently bankrupt and owner of the nine LANG newspapers. The same group of investors, led by Alden Capital Group, already own major stakes in the two companies.

Alden also owns a piece of the Times, and Rainey reports that the currently bankrupt Tribune Co. has kicked Freedom's tires. But Tribune's internal troubles and potential anti-competition complaints would seem to make this wedding a little more difficult.

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.

MediaNews and Freedom are thinking merger

The shakeup in the MediaNews Group boardroom, led by news that Dean Singleton is stepping down as CEO, isn't just a case of musical chairs. As the Wall Street Journal reports, two of the three new board members named today work for a company that is part owner of Freedom Communications, publisher of the Orange County Register. An insider told WSJ that the company, Alden Global Capital, is thinking merger.

MediaNews owns nine newspapers in Southern California, some of which already have a working relationship with the Register.

But the consolidation plans could go much further. From the WSJ:

MediaNews Group Inc., publisher of more than 50 daily U.S. newspapers including the Denver Post, is eyeing a merger with Freedom Communications Inc. and possibly several other newspaper companies, according to a person familiar with the matter. 

-snip-

The person ... said Alden wants to roll at least some of its various newspaper holdings into a single company. Alden was part of a group of financial firms that emerged last year as the winner of the auction of the Philadelphia Inquirer and the Philadelphia Daily News. Alden also owns a stake in Journal Register Co., which publishes the New Haven Register among a group of other papers.

A traffic accident is just a text message away

Poynter has a cheerleader column up today congratulating the Orange County Register for pushing stories out on mobile devices. According to the story, roughly 25 percent of the paper's digital traffic last weekend came via mobile sources.

The Register's well-named social media guru, Sonya Quick, said a 10-car wreck in Newport Beach was responsible for the spike. From her email to Poynter:

Three people died in the accident. The story’s many versions accounted for a large portion of our mobile traffic over the weekend. 

Social: The original story was shared 323 times on Facebook and in 26 tweets. The follow-up story was shared 148 times on Facebook and in 16 tweets. I have seen that social links are a much more significant source of referral traffic on our mobile website when compared to our full website. 

E-mail: This story is about people. Based on people being injured who were likely friends and family to many, and based on the number of social shares, I’m guessing that the story was shared via e-mail much more than an average story. 

Alert: The accident resulted in a 10-hour closure of West Coast Highway (also known as Pacific Coast Highway) on Saturday. Our newsroom sent an alert about the accident that alerted thousands of people to the article. (We have a news alert tool built into our content management system which allows us to send breaking news out to text message subscribers, @ocreggiefacebook.com/ocregister fans within seconds). Twitter followers and

Question

Whatever happened to the Orange County Register's experiment in outsourcing copy desk and layout functions to India? The plan, announced in June 2008, was to do this for a month and then evaluate the results. But I don't remember hearing about the results - maybe I just wasn't paying close enough attention. Or maybe I just forgot.

The faces of the Register

All reporters and columnists at the Orange County Register will have to have their mug shots taken and the pictures will run with every one of their stories, according to a memo obtained by LA Observed. The memo, written by deputy editor Brenda Shoun, offers this rationale for the mugs:

Recently-released MORI research recommendations told us that we need to better promote our talented writing staff. Images were specifically called out by the research team as a good way to do this. 

My guess is this has less to do with promoting the talented staff than it does with a readership survey that made vague calls for more transparency and accountability from the newsroom.

Nevertheless, the mug shots could be a good way to promote the talented writing staff within the paper so that no one forgets a talented reporter's name when memos go out:

Also, if we have somehow forgotten a name please forgive us. The list was assembled in haste.

Four in the morning

1. Republicans Meg Whitman and Steve Poizner have spent nearly $100 million between them in an increasingly bizarre primary contest. The headline for Dan Morain's latest column in the Sacramento Bee says it all: "Never before has so much been spent for so little" SacBee

2. Alan Mutter says local television stations could go the way of the newspaper (would that really be so bad?) Mutter

3. Reporters at Tribune Co.'s WGN Channel 9 are asked to shill for L.L. Bean. ChiTrib (found via Romenesko)

4. The Los Angeles Times has yet to close its printing press in Orange County. The new deadline is June 15, but the change in ownership at the Orange County Register could win the plant a reprieve. LA Pressmens' blog

Four today

1. On Facebook, just like everywhere else, sex sells. Social Media Scientist

2. Jonathan Gold of the LA Weekly wins the Craig Claiborne Distinguished Restaurant Reviews award from the James Beard Foundation. Eater

3. How the Hoiles family lost the Orange County Register. OC Register

4. The Arizona Republic goes front page with an editorial against the state's new immigration law. AP

OC Register shrinks again

According to the SportsJournalists.com message board, the Orange County Register eliminated 30 positions this month, including 10 from the content side. Of those, seven were open positions that were eliminated. Three people were fired, including UCLA sports reporter Al Balderas.

From poster "playthrough":

This comes shortly after the fourth-quarter economic targets were achieved and everybody received bonuses. But in 2009, there was a one-week furlough and a 5 percent pay cut. And, currently, the entire floor of the building that houses the Content staff is undergoing a significant remodeling projected rumored to be in the $500,000 range.

Also, Freedom's bankruptcy, which previously had received court approval, is supposed to be finalized next week.

Keep in mind that the posted information comes from an anonymous source. I decided to link to it since the message thread includes a memo from OC Register editor Ken Brusic that mentions furloughs and possible layoffs. If I get any further information or corrections, I will post them prominently.

Four in the morning

1. Meg Whitman wants media attention, but not media questions. Chronicle

2. Bonuses for Orange County Register employees. LAO

3. The new editor of the Pasadena Star-News says he's back in the USSR. Star-News

4. The Los Angeles Daily Journal eliminates one of two D.C. reporter positions, prompting reporter Robert Iafolla to quit, and adds a labor and employment beat to the legal paper. LAO

This week in bankruptcy news

Freedom Communications, owner of the Orange County Register, has filed a reorganization plan in a Delaware court and expects to emerge from bankruptcy at the end of March. From the Register:

Under the plan, Freedom’s secured debt would be reduced from $770 million to $325 million. Unsecured creditors would split an initial $32.2 million but would be able to pursue a lawsuit against the company board and insurance companies in an effort to recoup up to $25 million more.

The Hoiles family, which has owned the flagship Register newspaper since 1935, would have no ownership. The lenders have already named a new board of directors that will take over when the company emerges from bankruptcy. According to the court filings, Osborne will be the post-bankruptcy CEO. He has been interim chief executive since last summer.

MediaNews Group, meanwhile, will file its bankruptcy plan sometime in early March and already an affiliate of the Tribune Co. has filed a preemptive challenge. From the Denver Business Journal:

According to the objection, GreenCo paid $2.4 million in 1998 for an irrevocable option to buy all of the assets and business operations of the Los Angeles Daily News, which is owned by MediaNews Group. The option, which was due to expire in 2010, has never been exercised, and GreenCo says it’s owed at least $8.4 million under the terms of the contract.