Who Controls the Connecticut Media?

 
The Manchester Journal-Inquirer newsroom.

The Manchester Journal-Inquirer newsroom.

Jared Ramsdell / Journal Inquirer

In December 2008, Michael Schroeder picked up a copy of the New York Times, read Dan Barry’s “This Land” column about two dying newspapers in Connecticut, then threw away the newspaper without a second thought.

Schroeder was living on Long Island, working as a consultant for a medical products catalog, a career in newspapers and a stint at newspaper ownership already under his belt. The economy had killed his first business venture, a Monday-through-Friday newspaper called BostonNOW with a circulation of 135,000. A second stab at owning a newspaper wasn’t on his radar.

That is, until, a few days later when he ran into an old friend, Harry Binder, of Binder and Binder Social Security advocates fame. Binder had read the same article, and was struck with a different thought: Here was an opportunity. “He asked, did I ever think about doing something like this,” Schroeder recalled recently, sitting in a conference room at the headquarters for the New Britain Herald, one of the two papers mentioned in the article. “I said, ‘Not really.’”

And yet, after that conversation something clicked for Schroeder. Together he and Binder talked about buying the New Britain Herald and Bristol Press—Binder funding the purchase and Schroeder running operations. Three days later, Schroeder was sitting in a meeting with the mayors of Bristol and New Britain, asking if the residents there might accept an outsider like himself. Three weeks later, he had the keys to the New Britain Herald in his hand. (Binder was unable to be reached for comment regarding this story.)
 

CLICK HERE TO SEE A MAP OF WHICH NEWSPAPERS COVER WHICH PARTS OF THE STATE.


NEWS COVERAGE of the sale painted Schroeder as a savior for the small-town newspaper in Connecticut. His quotes about revitalizing community journalism invigorated industry conversations at a particularly depressing time for the business. Advertising revenues for newspapers in America had shrunk by 23 percent between 2006 and 2008, according to the Pew Project for Excellence in Journalism’s 2009 State of the Media report. Staffs and content were trimmed in 2008, hoping to stay ahead of the trends. Circulation continued its downward spiral. “It was the year no one seemed to want to buy newspapers anymore,” the Pew report stated.  Yet here was a guy coming in from out of town to save two dying newspapers.

“We made a commitment to community journalism,” Schroeder says. “We were going to put out a respectable community newspaper that would build community. We even added a line to our masthead on the editorial page that says ‘It takes a newspaper to build a community.’”

Almost five years later, while Schroeder continues pushing forward with his plans, his dramatic purchase has faded to the periphery. But his story could become instructive as the state—and the nation—watches several other prominent newspapers go through ownership changes. The moral being: this is not necessarily the end.

August was a particularly volatile month for big news organizations. John W. Henry, the owner of the Boston Red Sox, purchased the Boston Globe for $70 million—a steal by most estimates. A couple days later, the owner of Amazon.com, Jeff Bezos, bought the Washington Post for $250 million. Later, AOL announced it was closing or selling some 300 hyperlocal Patch.com sites, including several in Connecticut.

Closer to home, the Hartford Courant is poised for a change. The newspaper’s corporate owner, Tribune Co., is coming out of its bankruptcy filing and doing a lot of corporate reorganizing, and its future potentially hangs in the balance. As Tribune works through its next steps, the big picture question remains: What will happen to the state’s largest paper—the oldest continuously published newspaper in the country?
 

 

UNDER TRIBUNE OWNERSHIP, the Courant has been down a bumpy road.

Tribune Co. acquired the paper in 2000 from Times Mirror Company, along with several other large dailies in the country, including the Los Angeles Times. Sam Zell, a real-estate investor, bought the company and took it private in 2007, resulting in about $12 billion in debt for the Tribune properties, which included more than 20 newspapers and about a dozen television stations. That’s when things began to unravel, according to Paul Stern, a former editor at the Courant for 24 years who took a buyout in 2008.

“The wheels didn’t start to fall off, really, until Sam Zell bought the place,” says Stern. “I think the real cost cutting started after Zell took over—when it was clear the company could not pay its debt to the banks that financed the take-over. That’s when the big cloud sort of moved over the company.”

In Stern’s time at the Courant, the newspaper won the Pulitzer Prize—twice. It published seven editions reporting on 81 towns. Some towns had two or three reporters to cover special topics such as education.

In January 2008, the newsroom had 245 employees, according to numbers published in the Courant. By March 2009, that number had dropped by 45 percent to 135 people. It was still making money on its own, but as Stern facetiously puts it: “We would ship off big boxes of money to Chicago” to help fund Tribune’s overall debt. Current staff numbers are hard to pin down. Hartford Courant editor Andrew Julien says he couldn’t comment on the specific staffing figures today.

“As most news organizations across the United States, we are smaller than we were 10 years ago,” he acknowledges. “What it’s forced us to do is to focus on what is our mission and what matters most to our readers.”

Despite smaller staff counts, the Courant continues to produce quality work—notably investigative pieces and detailed coverage of major state events such as the Newtown shooting, which earned the paper recognition as a Pulitzer Prize finalist. Yet, as is so often the case, the comparison is to the golden days of news reporting.

Those comparisons are counterproductive, says Julien, because the changes are industry-wide. The question now is: How does a newspaper adapt and continue to produce meaningful work?

One strategy employed by the Courant was its merger with Fox 61, also owned by Tribune. In 2009, they joined newsrooms in one building and started sharing content across the two platforms. In a story published in the Courant  in March 2009, Tribune leaders described the move as a way to respond to the economic woes of the industry and to keep up with the changing times of journalism. The merger with TV “was probably done for a reason,” says Joe Strupp, a media analyst and former editor at Editor & Publisher magazine. “It was done to save money, or to make money.”

The move impressed some: It was a true 21st-century newsroom. But it angered others, who pointed out that it violated FCC regulations on media ownership.

“Tribune knew it was going to be violating the cross ownership rule,” says Chris Powell, the managing editor at the Manchester Journal-Inquirer. “Tribune figured—calculated —that it could buy its way out of the rule. It almost succeeded in convincing the FCC to repeal the ban in cross ownership.”

Now—again in response to economic concerns—the broadcast business will be separated from the print, at least as far as corporate structure goes. In July, Tribune split into two companies, one for its broadcast properties and one for the publishing side. National news analysts, like Ken Doctor, the author of Newsonomics, speculate the change might be a tax dodge, a way to postpone selling the papers or a way to drive up the price.

Others assume it’s a way to keep the broadcast operation while continuing a bid to sell the publishing side. “Synergies that were supposed to develop did not add much,” says Powell. “The financial analysis is companies seem to think newspapers are going down the toilet and don’t want anything to do with them.”

After the announcement, several big names emerged as potentially interested in buy one or all of the Tribune newspapers—although no one has specifically mentioned the Hartford Courant as a paper it wants to break out from the group. The Koch brothers, billionaires who have prominently supported conservative causes, announced in June they wanted to bid on the papers, then said in August they were not interested. Other big names include Aaron Kushner, Warren Buffett and Rupert Murdoch.

Tribune spokesman Gary Weitman wouldn’t say specifically whether the media hype about a potential sale has any credence. He would only refer to a July 2013 statement outlining the company separation, which says the change is “designed to maximize shareholder value” and “position the company for long-term growth.” The release is thick with PR talk, and avoids answering the most-asked questions about a potential sale.

“The separation is designed to allow each company to maximize its flexibility and competitiveness in a rapidly changing media environment,” Tribune’s CEO Peter Liguori is quoted as saying in the release.

Local media analysts continue to wonder how Tribune’s changes will impact the Courant. The understanding is that Tribune’s separation leaves all the real estate holdings with the broadcast side.

“All they are selling now is the newspapers, the good will,” says Maureen Croteau, chairman of the University of Connecticut journalism department, who used to work at the Hartford Courant. “They are not selling the bricks and mortar. It also destroys the price of the newspapers. There is a lot of value tied up in the real estate. It may make it less attractive to a buyer in the future.”

Rich Hanley, a journalism professor at Quinnipiac University echoes Croteau’s concerns. “It’s going to be difficult to sell the Courant separate from the TV station, only because the integration is so thorough, to unpack it would erode value,” he says.

For now, the two entities continue to operate together. And the staff is continuing on as it has before, Julien says.

“The way I see my job personally is to say to my staff, ‘Try not to worry too much about the things you cannot control,’” he says. “We can control every day what we do in this newsroom.”
    

 

THE HARTFORD COURANT and Schroeder’s papers have more in common than immediately meets the eye—most notably, the cutbacks that so often come with a debt-burdened corporate owner.

The New Britain Herald and Bristol Press were owned by the Journal Register Company (JRC) before Schroeder stepped in.

The changes that happened to JRC since it sold the Bristol Press and the New Britain Herald highlight how complicated the behind-the-scenes ownership changes at newspapers can be. The company has gone through bankruptcy twice; once in February 2009 and again in September 2012. In between, it joined with MediaNews Group—which operates more than 50 dailies across the country—under an umbrella group called Digital First Media. The company’s Connecticut properties include Connecticut Magazine, the New Haven Register, the Middletown Press and the Register Citizen of Torrington.

The first time the company went through bankruptcy, JRC’s debt was $692 million, according to the New York Times. When JRC got out of bankruptcy, it still had $225 million in debt, according to a fact sheet distributed to employees. By 2012, the company still had $160 million in debt and what company executives termed “a legacy (media) cost structure” that required the second bankruptcy filing. (After the second filing, Alden Global Capital, the New York-based hedge fund that owned JRC, sold the company to an Alden subsidiary, which has re-named it 21st Century Media.)  

Even before bankruptcy, there were cuts across the chain. Printing the Herald and Press was outsourced to another JRC paper, as was the customer service desk. News staff was laid off incrementally.

“JRC was uniquely aggressive about making cuts,” says Steve Collins, a reporter for the Bristol Press, who started there in 1994. “It was a business to them. Covering news, truthfully, was always sort of an afterthought to the company.”

In the time between 1994 when Collins started, and 2008, when the end was near, he claims the two papers lost half their staff through cuts. “It was difficult, even a little painful, to see all the cutbacks that had occurred,” he says. “It seemed like a trajectory that was headed straight down.”

JRC is now trying to move forward with a new “digital first” mentality. “JRC is aggressively shedding its print legacy and moving into its digital space,” Hanley says. “And it’s not looking back. It’s going the full way forward. They have a long way to go, and they’re moving in that direction.”

Schroeder says his first priority as the Bristol Press and New Britain Herald owner was to build a connection with the readers. He moved the customer service office back to New Britain from New Haven. The paper continued to be published off site.

“Everybody told me the worst thing they knew about the paper was customer service,” he says. He also tried other ways to reach out to the community. For example, three years ago the New Britain Herald started publishing a weekly Polish language edition to serve the large Polish population in the city.

The two papers started publishing local editorials, instead of the regional content that had been published from the Journal Register Company chain. Schroeder’s papers even started running a full-page editorial on the front page each January 1, laying out goals and expectations for the coming year.

“We started out with building the newspaper back up, putting out a product people feel comfortable with, that they can respect even if they don’t agree. And one that was professional in quality,” says Schroeder.

You could argue that Schroeder has merely kept the status quo, that his purchase saved two dying papers, but did little to improve them. The staffs are roughly the same. The circulation—at about 11,000 between the two papers—is less than the almost 18,000 in 2008, according to figures from a 2008 Forbes article.

“We’re nowhere near the levels of back in the heyday,” acknowledges Collins. “But on the other hand, we have stopped the bleeding to some degree anyway. And local news means something, which wasn’t the case before.”

There is one other key difference—the papers are no longer lugging around corporate debt. In fact, the newspapers are actually making some money. Schroeder wouldn’t say exactly how much, but admits it was “lower than 5 percent” profit-margin range. “It’s not the old days where you are going to have people making a good buck as a business running a newspaper in New Britain and Bristol,” Schroeder says. “But there’s enough money there to pay for it, and for me to run it. So why not?”
 

 

THE QUESTION of how to fund news has been left largely unanswered as the news industry faces other major changes. Newspapers missed out on the Internet boat. Bloggers started publishing in a fresh way, and newspaper owners were left to catch up on the new ways people were getting their news. Advertisers cut back because of the recession. People started posting free classifieds on sites such as Craigslist instead of paying their local paper for space.

Chains like Tribune, saddled with debt at the wrong time, were in a crunch. So they found places to cut costs. Independently owned newspapers faced the same challenges. Even papers such as the Washington Post, which seemed to be doing everything right, were on a slow financial decline.

“It’s almost like who is the best butler on the Titanic,” Strupp says. “The business is such a mess that it’s hard to gauge who is making the best of the situation.”

Likewise, it’s hard to know which ownership model might be the most advantageous.

“The chains do have that advantage as they’ve got some central facility that can share the costs of the local operation,” says Powell. “On the other hand, the ownership, Tribune’s problems for example, can be a real burden on the operation. I think the people at the Courant would agree that their affiliation with the Tribune Co. over the last several years has weakened them, not strengthened them.”

The Journal-Inquirer is one of many independent newspapers that also had to make cuts, mostly by attrition, Powell says. Almost two years ago, the Journal-Inquirer started having its news staff take at least one unpaid furlough day per month. The paper has also switched to a higher deductable medical insurance plan, and reduced other benefits.

Several papers—such as the Waterbury Republican American and the New Haven Register—have outsourced printing to keep their resources concentrated on news production.

“There are economies of scale,” says Jon Kellogg, the executive editor for the Republican American. “Let’s say we have a full-time press crew and they have a seven-and-a-half, eight-hour day. If the press is only running three hours a day, what are they doing with the other five hours?” Add maintenance and newsprint costs, and the effects of downsizing the size and pages of most daily newspapers, and you’ve got a lot of unneeded costs.  

Other groups of newspapers have consolidated editing efforts. Hearst Corporation’s Connecticut newspapers, including the Connecticut Post, Stamford Advocate and Danbury News-Times, have instituted a central copy desk in Bridgeport. So while the Advocate and News-Times used to have their own editing staff, now the papers are edited and laid out alongside the Connecticut Post.

“The universal desk is nothing new,” Strupp says. “It’s effective in cutting costs. It’s not as effective in doing the editing and the oversight of individual stories. When you have any universal desk of anything, you have more copy coming in and fewer eyes on each story.”

“Everyone sees this as a death watch on newspapers,” Croteau says. “And because of that, they are looking for short-term answers that keep them in business from one quarter to another . . . Maybe that’s not a reasonable view.”

While profit margins in newspapers have historically been large, Croteau says media owners should refocus, and take the mentality of grocery store owners, where profit margins are much smaller. “We produce perishable things in great quantity every day,” says Croteau.
 

 

THE QUESTION of how to pay for news is so important because news is more than a business—a notion that is sometimes lamented, sometimes forgotten, as the industry convulses.
“I think one of the great advantages of family newspapers is they understand their institutional responsibility. They understand this is not just a business,” Kellogg says. “This is one of the only businesses that has its own Constitutional amendment. We have a responsibility—a public trust—that has to be maintained. Sometimes that comes at our own sacrifice. But that’s the bargain. That is the part that gets discouraging when the public doesn’t see that, or chooses to put on blinders.”

It’s that public trust that so many corporate news owners are accused of breaking in order to profit. “When the sale of public Tribune to Sam Zell took place, a number of top officials of Tribune made tens of millions of dollars,” Stern says. “To them, the company was all about money and, although I am sure they would not admit it, personal enrichment. To most of the journalists who lost their jobs as a result of the ill-advised sale, the newspaper was not only a weekly paycheck, but an institution that held a sacred public trust.”

The bigger question on the minds of many journalists is: Does anyone in the public care anymore?

Powell describes “a decline in civic virtue” that has hurt newspaper sales. He tracks this virtue via voter participation in Connecticut. Not just how many registered voters actually went to the polls—how many adult citizens went to the polls? The numbers are depressing, he says. Some 80 percent of the eligible population didn’t vote in local elections, according to Powell’s most recent count.

“It’s been declining at a 45 degree angle for 50 or 60 years,” he claims. “We can sell newspapers to people who are engaged in the community. We can not sell to people who don’t give a damn.”
 

ENTER EXPERIMENTS in nonprofit journalism—something that has been incubating in Connecticut since 2005 when Paul Bass launched the New Haven Independent. Other non-profit sites, Connecticut Mirror and the Connecticut Health Investigative Team, followed. The non-profits use grant funding to pay for reporters and other expenses. And they publish on the Internet, saving print costs.

“It’s a solution in some places,” says Dan Kennedy, a journalism professor at Northeastern University, who wrote The Wired City, a book about the New Haven Independent and other nonprofit news ventures. “And certainly in New Haven it has been a great answer to the problem of how you pay for news. But you need certain factors in place.” Those factors include a driving force like Bass, a strong funding source like the Community Foundation for Greater New Haven, and a perceived void in news coverage.

Connecticut also boasts two long-time newspaper trusts, which fund The Day of New London and The Norwalk Hour. “That’s a wonderful model for journalism and journalists,” says Croteau, who serves on The Day Trust board of directors. “It’s not particularly a wonderful model for people who want to clean up and make a profit and put it in their pockets.”

Croteau says The Day Trust has meant that the newspaper doesn’t have to worry about double-digit profits, like a corporate-owned paper would. “Our standard is, ‘What can we do to stay in business, keep our business healthy and sustain us?’ Not, ‘What can we do quickly to make sure we keep profits high,’” she says.

Yet, even The Day has faced its own economic troubles, with layoffs in 2008 and 2011, according to PaperCuts, a blog that tracks newspapers layoffs in the United States. The paper also outsources its printing, as several others have done to keep costs down.

As Kennedy outlines in his book, one of the biggest challenges facing journalism today is “finding ways to bolster civic engagements—that is, to get the public interested in local politics, community events and other issues from which a mobile, wired generation are disconnected.” The Wired City outlines an argument that online non-profit sites can help solve that problem by better connecting with readers.

“One of the things the Independent has done, they’ve actually been able to use comments in a productive way, that not just adds to the journalism, but creates a real sense of community around the news,” Kennedy says. “If you can’t do that, I don’t think there’s an awful lot of hope, because people are disengaged.

“You need to not only cover the news, but create a community of people who understand that it is important, and why it is important, and not just important, but that it is interesting,” he adds.

Hanley also mentions the need for news to be interesting. “Too often news has been defined as matters of state, government, along with some features. Now it needs to be a tapestry of subjects,” he says. “It doesn’t mean you’re putting the Kardashians on your front end. You’re recognizing that people do not live in a bubble of government speak. There are everyday things that can be interpreted as news if presented in a way that matches the expectation of a web reader. It has no memory of what the news used to be.”
 

SO IS THIS a defining moment in Connecticut journalism, or just another bit of endless journalism business news? If the Hartford Courant is sold, could the removal of Tribune’s past burden have a similar—or ideally, better—outcome as the New Britain Herald and Bristol Press? If Tribune decides to hold on to its print papers, can the corporate reorganization give it the freedom to adapt to the needed industry changes?

One thing that’s clear, is that the media industry today is one in which news outlets are constantly making and remaking themselves, as Schroeder has shown.

“I wouldn’t be so quick to dismiss it as a dead entity,” says Hanley. A successful future will undoubtedly look different than the Courant’s past, he suggests. “There is a very robust future in news. It’s just undergoing a redefinition.”

 

Who Controls the Connecticut Media?

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