News Cycle

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Archive for September 2009

Ad Revenue Hasn’t Hit Bottom, But Free Fall Has Stop, NYT Says

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Despite some tentative optimism from Washington, Wall Street and Madison Avenue, people who monitor the newspaper business for a living say it has not yet hit bottom, writes Richard Perez-Pena in The New York Times. But in what passes for good news these days, the free fall in newspaper advertising may be slowing, and specialists predict it will ease through 2009 and into 2010.

With 10 days left in the third quarter, analysts, publishers and ad buyers say that ad revenue will be down about 25 percent industrywide from the third quarter last year, possibly a little less. They predict that the decline will be smaller in the fourth quarter. Several of them say the usual back-to-school uptick in newspaper advertising seems to have been a little better than in most years, if only because July and August were so weak.

Ordinarily, such numbers would be seen as catastrophic, but these times are not ordinary. The drop in combined print and digital ad revenue last year, 16.6 percent, according to the Newspaper Association of America, was the worst since the Depression. But it looks rosy next to 2009, when revenue fell 28.3 percent in the first quarter and 29 percent in the second.

In the last few days, signs of life have been seen from struggling retailers, and the Federal Reserve chairman, Ben S. Bernanke, and others have speculated that the recession has ended. Media executives, including Rupert Murdoch, have talked about advertising starting to rebound. Last week, shares in several newspaper companies, including Gannett, McClatchy and The New York Times Company, jumped 10 percent or more, to their highest prices this year.

Alexia Quadrani, an analyst at J. P. Morgan, said newspaper stocks had benefited from a trickle-down effect, as investors, hearing positive news about advertising, asked, “What stocks are still looking relatively inexpensive among media stocks?” She said ad revenue would show a percentage decline in the mid-20s for the third quarter, about 20 in the fourth quarter, and next year, “more modestly negative, but still negative.”

Several publishing executives said those numbers seemed about right. The executives, who insisted on anonymity because they are prohibited from discussing financial information until it is made public, also said they saw no particular justification for the recent spike in stock prices.

If the rate of decline in advertising slows, it will largely be because 2008 grew steadily worse as the year wore on and the recession deepened, making year-to-year comparisons less stark. The figures for the fourth quarter of 2009 will be compared with the final quarter of 2008, when the financial markets were in crisis and newspaper advertising fell almost 20 percent, at that time the worst performance in generations.

Roberta Garfinkle, director of print strategy at TargetCast TCM, was skeptical about any improvement in the third quarter, but said signs of recovery could appear in the fourth quarter.

“Newspapers will be the last media to get any ad comeback,” Ms. Garfinkle said. “But we’re seeing more people wanting to have the conversation about doing some print advertising, where earlier we weren’t even having the conversation.”

Edward Atorino, with the Benchmark Company, a broker dealer, is one of the more optimistic analysts, predicting a decline in ad revenue of about 20 percent in both the third and fourth quarters.

“You’ve had Bernanke saying the economy is better, Murdoch saying advertising is getting better, broadcasting looks like it’s in a recovery stage, even magazines may be picking up a bit,” Mr. Atorino said. “But for newspapers, I don’t think I see much to cheer about yet.”

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September 21, 2009 at 5:54 pm

CNN Won’t Apologize for Jumping the Gun on Coast Guard Story

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CNN is unapologetic for jumping a story about Coast Guard vessels shooting at a boat near the Pentagon today (9/11) during an appearance by President Barack Obama. The story was incorrect as it turns out, and despite being told twice by the Coast Guard that nothing was going on, CNN ran with it.

This comes right after Obama used a story about Walter Cronkite holding a story about a fire because he did not have confirmation (Walter was right, the story wasn’t what it seemed, and everyone else was wrong.)

Here’s the CNN statement:

CNN staff were monitoring law enforcement activity this morning given the 9/11 anniversary. After hearing a U.S. Coast Guard radio transmission that a boat had breached a security zone on the Potomac River a short distance from the Pentagon where the President had just attended a 9/11 anniversary ceremony, CNN contacted the Coast Guard public affairs office at the agency’s headquarters. The Coast Guard spokeswoman said she was unaware of any activity taking place on the Potomac River.

After hearing a further radio transmission about 10 rounds being expended, and after reviewing video of rapid movement by Coast Guard vessels as the President’s motorcade crossed the Memorial Bridge, CNN reported the story. Simultaneously, during a second phone call, the Coast Guard spokeswoman informed us that its National Command Center and other command posts knew nothing about any activity in the area.

Given the circumstances, it would have been irresponsible not to report on what we were hearing and seeing. As with any breaking news story, information is often fluid and CNN updated the story with the official explanation from the Coast Guard as soon as it was provided.

Uncle Walter would have handled it differently!

During a memorial service for Cronkite two days ago, the president talked about how Cronkite wanted to get the story first, but “he understood the importance of getting it right.” He described how Cronkite was working a story early in his career about an allegedly massive blaze at a city hall. His boss demanded he get on the air immediately. But Cronkite said no, he first wanted to confirm the extent of the fire with the fire department.

“You don’t need to confirm it,” yelled the station manager, “my wife’s watching the whole thing,” and went on the air himself. Cronkite found it was a small fire, not a big one. No fatalities as rumored before.

“He lost his job,” said Obama, “but he got the story right.”

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September 11, 2009 at 4:49 pm

Posted in CNN, Obama

Negotiators Angered By British-Led Raid to Free NY Times Reporter

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Hostage negotiators expressed shock and anger today at British Prime Minister Gordon Brown’s sending in the muscle of a commando raid to free a kidnapped New York Times journalist, saying that they were within days of securing his release through peaceful means, James Hider, Philip Webster and Michael Evans of the London Times report this morning.

Stephen Farrell — a British citizen who was in Afghanistan as a reporter for The York Times was rescued in yesterday’s commando raid, but his Afghan translator, Sultan Munadi, and a British soldier from the Special Forces Support Group were killed.

According to media reports, the raid took place in the village of Kharudi, which was the site of a recent air strike that killed dozens of people. The raid to rescue Farrell took place under the cover of darkness early Tuesday when U.S. helicopters were used to deploy British and Afghan troops. At least one civilian and many Taliban militants were killed in the firefight during the rescue.

The Times report continues:

Defence sources said that intensive efforts had been made over the weekend to pinpoint the hostages and assess the strength of the Taleban presence. They said there were no guarantees that a negotiated deal would have led to Mr. Farrell’s release and that there were fears he could be moved. However, several sources in Kabul said that the captors were, at worst, seeking a ransom. A Western source involved in the talks said: “There was no immediate urgency that they were going to be beheaded or handed over to another group. You cannot move them easily. It’s a very isolated area.”

Another Western official said: “It was totally heavy-handed. If they’d showed a bit of patience and respect they could have got both of them out without firing a bullet. Instead, they ended up having one of their own killed, the Afghan killed and civilians killed. There’s a lot of p****d-off people at the moment.”

The negotiations had begun within 24 hours of the kidnapping last week. The Interior Minister had persuaded 300 local elders to intercede with the kidnappers, saying that the hostages were just journalists doing their job. Mr Mudani’s uncle had established communications with the provincial Taleban commander. An Afghan who spoke with the local commander said: “I think we could have got them out peacefully, maybe in a few days.”

Tuesday night’s raid was approved by David Miliband, the Foreign Secretary, and Bob Ainsworth, the Defence Secretary, after consulting Gordon Brown, The Times can confirm.

Mr Brown said: “Hostage-taking is never justified, and the UK does not make substantive concessions, including paying ransoms.”

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September 10, 2009 at 7:51 am

Daring Raid Rescues Times Reporter Held Capitve in Afghanistan

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New York Times reporter Stephen Farrell, held captive by Afghanistan militants since Saturday, was rescued during a military commando raid by NATO forces earlier today. Unfortunately, his interpreter, Sultan Munadi; a British commando, and an Afghan woman were killed in the rescue attempt.

He was working near Kunduz, in northern Afghanistan, on a story concerning the aftermath of Friday’s NATO airstrikes on Friday that resulted in scores of deaths, including that of civilians, Eric Schmitt of the Times reported.

Schmitt gives more details of the rescue in his report:

In a brief telephone call about 7:30 p.m. New York time on Tuesday, Mr. Farrell told Susan Chira, the foreign editor of The Times: “I’m out! I’m free!”

Ms. Chira said Mr. Farrell told her that he had been “extracted” by a commando raid carried out by “a lot of soldiers” in a fierce firefight with his captors. He said Mr. Munadi was fatally shot. “He was trying to protect me up to the last minute,” Mr. Farrell said.

A statement from Prime Minister Gordon Brown of Britain announced the commando’s death, and an Afghan official confirmed the death of the woman.

Mr. Farrell, 46, joined The Times in July 2007 as a correspondent in the Baghdad bureau. He has spent many years covering the struggles of the Afghan and Iraqi people and built a respected reputation for his reporting on the Middle East and South Asia. He holds British and Irish citizenship.

Mr. Munadi, who was 34 and the father of two children, had worked regularly with The Times and other news organizations and was in the process of studying for a master’s degree in public policy in Germany. Back briefly in Afghanistan, he had returned to his role as a translator. He had hoped to one day work in public education to ease the problem of widespread illiteracy in Afghanistan.

Mr. Farrell, speaking to colleagues at The Times, said that he and Mr. Munadi were moved several times over their four days of captivity, and were finally moved into a very small room. In the first two days, he said, they had felt optimistic that they would be released.

The men holding them talked freely on their cellphones, Mr. Farrell said, and on the third day, some new Taliban figures, evidently more senior and from outside the immediate district, arrived. Mr. Munadi told Mr. Farrell they discussed moving the captives from the Kunduz area.

The atmosphere grew menacing, Mr. Farrell said. The captors taunted Mr. Munadi, reminding him of a case two years ago in which an Italian journalist taken hostage in Helmand Province was freed while his Afghan translator was beheaded.

Early Wednesday, the thump-thumping of approaching helicopters became audible.

“We were all in a room, the Talibs all ran, it was obviously a raid,” Mr. Farrell said. “We thought they would kill us.”

The captors scattered, he said, and the two men initially stayed put, fearing to be caught in any cross-fire. Then one of the captors came back and tipped his gun toward them, he said, but left without firing. The two men waited a bit, then made their way out of the room into a courtyard. Mr. Munadi leading, they scuttled along the outside wall of the compound. “It was a big, high mud-brick wall,” Mr. Farrell said. He said he could hear British and Afghan voices. “There were bullets all around us,” he said.

In the darkness, they ran along the wall for 60 feet or so, and then Mr. Munadi put up his hands and walked into the open, calling “journalist, journalist!” Gunfire broke out and he fell, Mr. Farrell said, just a couple of feet away.

“He was three seconds away from safety,” Mr. Farrell said. “I thought we were safe. He just walked into a hail of bullets.”

He said he dove into a ditch and waited a couple of minutes, listening for which direction the British voices were coming from, and then shouted, “British hostage! British hostage!”

The British voices told him to come over. As he did, Mr. Farrell said, he saw Mr. Munadi.

“He was lying in the same position as he fell,” Mr. Farrell said. “That’s all I know. I saw him go down in front of me. He did not move. He’s dead. He was so close, he was just two feet in front of me when he dropped.”

Neither The Times nor Mr. Farrell’s family knew that the military operation was taking place.

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September 9, 2009 at 12:50 pm

Sun-Times Media Group Cuts Nonunion Employees’ Pay

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Sun-Times Media Group announced today that it is cutting the compensation of nonunion employees earning between $25,000 and $100,000 a year by 8 percent. Those earning more face an 11 percent cut in pay.

Here is the memo sent to employees earlier today, which was leaked online less than an hour ago:

TO: All Non-Union Employees

FROM: Jeremy Halbreich
Chairman of the Board and Interim CEO
Rick Surkamer
President and Chief Operating Officer

DATE: September 9, 2009

RE: Compensation Reductions

Today we made the announcement that STMG Holdings, LLC, has entered into an agreement to purchase substantially all of the operating assets of Sun-Times Media Group, Inc. While much needs to happen over the next several weeks to complete a transaction, we are confident this means that our many businesses have a bright future ahead of them. This is an important milestone in our effort to secure the future of our newspapers and Web sites and to preserve as many Sun-Times News Group jobs as possible.

In our discussions and negotiations with the principals of STMG Holdings, LLC, we have underscored our commitment and they have made clear the critical importance that the businesses they are buying completely eliminate the cash burn and become self-sustaining and profitable in the future. The new owners are making a very significant financial commitment and they are committing substantial financial resources to our businesses that will directly support necessary capital expenditures and defined operating strategies to foster growth and innovation. While we have made tremendous strides toward this goal in the past months of eliminating the cash burn, there is still more that must be done.

We appreciate all of the sacrifices that our employees have made to date—and it is important to note that these sacrifices have been borne across our entire workforce: management, non-union and union employees.

However, while we have managed to significantly reduce the cash burn rate at the Company, it has not been completely eliminated. As a result, more needs to be done to establish a secure, sound business model for the Sun-Times News Group going forward.

Accordingly, we are announcing today a base pay reduction for all non-union employees who make more than $25,000 in annual base pay. The only exception will be the advertising sales staff below the vice president level, because they have already had their total compensation decline significantly due to the downturn in advertising revenues. While this is a difficult, unexpected and tough measure for the Company to implement, it is necessary along with the financial resources committed by the new ownership group to ensure a prosperous future for the Company’s newspapers and Web sites and employees.

The pay reduction program works like this: the first $25,000 of any employee’s base pay will not be reduced; base pay between $25,000 and $100,000 will be reduced by 8 percent; and base pay over $100,000 will be reduced by 11 percent.

Additionally, we have sent letters to our bargaining unit leaders today seeking their formal approval of a set of economic and work rule-related changes required by the Buyer. These are a required condition to be met before we can close a sale. The Buyer has required that agreement to these terms be achieved in writing no later than Tuesday, Sept. 29, 2009.

Please read the following frequently asked Q&A below for more details on the new cost reductions:

Q. Why has the Company decided to mandate a salary reduction program?
A. Our Company has been operating in an incredibly challenging environment. A tough economy and a significant, prolonged downturn in print advertising revenue, which has affected newspapers across the country, have continued to have a severe impact on the Company’s financial performance. We continue to need to drive revenue and pare expenses to put our business on a solid footing so that we can ensure that our new owners will be able to complete the transaction to buy the Sun-Times News Group business and secure the substantial financial commitment they are making to our enterprise. A salary reduction program is a tangible way to reduce expenses.

Q: Is everyone going to participate?
A: This program will be applied to all independent, non-union employees including senior management, director and manager personnel. The only exception will be the advertising sales staff below the vice president level because they have already had their total compensation decline by well over the levels described above due to the downturn in advertising revenues. Employees represented by third-party bargaining agreements already have undergone pay reductions and other measures, and they will be asked to make ongoing and additional sacrifices.

Q. How much money is the Company saving by doing this?
A. The estimated savings is very significant. It represents an important element in eliminating the cash burn rate at the Company and helping the Company reach profitability.

Q. Have other companies done this?
A. Many companies in many industries have used salary reduction programs to cut costs. Several of our media peers have implemented similar programs. As the secular and cyclical challenges facing our industry have persisted over the past 12-18 months, it becomes essential to align the cost base of our Company’s operations with the new revenue realities of today’s newspaper publishing businesses.

Q: Is this a permanent salary reduction?
A. This reduction is indefinite.

Q. When will the salary reduction go into effect?
A. For Chicago Sun-Times employees the salary reduction will appear on September 25, 2009 paycheck. For employees of Fox Valley Publications, Midwest Suburban Publishing, Post-Tribune and Pioneer Publications the salary reduction will appear on the October 2, 2009 paycheck.

Q. Is the reduction taken on my total salary or my base salary?
A. The salary rate is defined as the bi-weekly salary the employee is scheduled to receive. It does not include:

o Shift or other differential pay.
o Commission pay

Q. Can you provide an example on how the salary reduction will work?
A. See below:

Example 1. An employee earning $50,000 in annual base salary would see a 4 percent reduction overall of the annualized base salary – 0 percent on the first $25,000 and 8 percent ($2,000) on the next $25,000. That would be total a salary reduction of $2,000 annually resulting in $48,000 gross base salary for the year.

Example 2. An employee earning $125,000 in annual base pay would see a 7.0 percent reduction overall of the annualized base pay – 0 percent on the first $25,000; 8 percent ($6,000) on the next $75,000 and 11 percent ($2,750) on the next $25,000. That would be a total salary reduction of $8,750 resulting in $116, 250 gross base salary for the year.

Q. What part of my salary will be used to determine the respective salary reduction?
A. An employee’s current annual salary rate will be used to determine the reduction amount.

Q. How will the plan work for part-time employees?
A. Part-time employees will have their salary reduced proportionately.

Q. Are there any plans for additional unpaid furloughs?
A. No, there are no scheduled furloughs for the remainder of the year.

Q. Will monthly health insurance premiums be adjusted for the rest of 2009?
A. No.

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September 9, 2009 at 12:34 pm

Posted in Sun-Times Media

E&P: Some Syndicates Seeing More Interest in Conservative Op-Ed Columnists

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Keeping things balanced on an op-ed page had been always the hallmark of a quality newspaper. And while the political winds across the country is most definitely coming from the left, many newspapers are searching more voices from the right to keep their op-ed pages truly on an even keel, according to a study conducted by Editor & Publisher.

But the trade journal also concludes that the thrist for conservative columnists is mixed, as some syndicates are not seeing any surge to the right.

United Media’s NEA Service, the package that includes puzzles, horoscopes, food and humor columns, editorial cartoons, opinion columns and other offerings, recently conducted a survey of its client editors and found those editors wanted more conservative columns, says Lisa Klem Wilson, senior vice president/ general manager of syndicates. An ensuing search yielded Byron York, former White House correspondent for National Review and now chief political correspondent for The Examiner in Washington.

York, Wilson says, is “willing to criticize Republicans when they need to be criticized,” and he’s one conservative columnist who does the reporting to back up his points. “Editors want someone who’s actually providing a thoughtful point of view, someone who’s credible,” she adds.

At Creators Syndicate, “We’re seeing a surge in sales of conservative columnists and editorial cartoons,” says National Sales Director Margo Sugrue. “Pretty much anyone who’s critical of the Obama administration is in great demand.” Creators’ bullpen of right-leaning columnists includes Linda Chavez, Robert Novak, Thomas Sowell and Ben Shapiro, as well as Bill O’Reilly. “With the glowing coverage in the media of the current administration, conservatives are eager to find an outlet that expresses their point of view,” she asserts.

Not everyone, however, agrees with the assessment that conservative content is hot these days. “If it’s a trend, I haven’t noticed it,” says Alan Shearer, executive director and general manager of the Washington Post Writers Group. He tells E&P that people always used to say that if a Democrat were to be elected president, it would make for good business for conservative writers. But as far as a conservative groundswell goes, “I don’t really see it in the numbers,” he adds.

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September 8, 2009 at 12:41 pm

Afghanistan Journalist, Sentenced to Death for Downloading an Article, Set Free

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Reporters sans frontieres is reporting today that Sayed Perwiz Kambakhsh, a journalist who was sentenced to death and then to 20 years in prison for downloading an article about the rights of women in Islam, was secretly pardoned in Afghanistan and released several weeks ago.

He has left the country for fear of reprisals.

“We hail Sayed Perwiz Kambakhsh’s release with deep emotion,” Reporters Without Borders secretary-general Jean-François Julliard said. “After being held for nearly two years, he now needs to be able to rebuild his life. We pay tribute to all the free speech activists in Afghanistan and abroad who never stopped defending his innocence and pressing for his release.”

Julliard added: “This case will be remembered as miscarriage of justice marked by religious intolerance, police mistreatment and incompetence on the part of certain judges. The authorities must now ensure that article 130 of the Afghan constitution, defining blasphemy, is no longer used to bring politically-motivated charges and to suppress free expression.”

Kambakhsh’s lawyer confirmed to Reporters Without Borders today that his client was released several weeks ago after President Hamid Karzai secretly signed a pardon.

Many foreign governments had interceded with the Afghan authorities on behalf of Kambakhsh, while the London-based Independent newspaper gathered more than 100,000 signatures to a petition for his release. Reporters Without Borders also handed in a petition with several thousand names to a presidential adviser in Kabul.

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September 7, 2009 at 10:25 pm

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