There’s a lot of pessimism out there about newspapers. Maybe you’ve noticed.
Let’s get it all off our chest at once: The latest round of quarterly earnings reports from public companies ranged between disappointing and disastrous. Credit ratings, reflecting perceived industry prospects, sank. The kind of investors who pushed Knight Ridder and Tribune into selling are now pressuring the two-tier stock structure at companies like the New York Times – McClatchy has that, too – and stock prices are down across the board. Journalism websites predict another round of dismal circulation reports when the new ABC numbers are released. There were more layoffs at Tribune papers and others.
It gets discouraging, yes, but that’s not the whole picture. You often hear people caution against managing a company for the short term, and there’s never been a clearer instance in our industry of why that matters.
We’re in the midst of the short run right now. But this is not where we’ll end up.
Folks in McClatchy newsrooms have heard me talk about the “phase transitions” common in thermodynamics – the place where something changes from one characteristic to another. The easiest example is watching water in its solid form (ice) melt and turn into a liquid. That’s a phase transition; it happens again if you heat the liquid water to the boiling point and watch it turn into a gas. (In this photo, frozen argon is being heated, melting and turning to gas – a phase transition trifecta).
America’s newspapers (like so many other institutions) are definitely in a phase transition right now – and, as physicists will tell you, this is where the really interesting stuff happens. In chaos theory, we're on the turbulent edge, described as “a region between order and complete randomness or chaos, where the complexity is maximal.”
That would make a good t-shirt, don’t you think? “Complexity is maximal.”
In the meantime, we have to live through this. We will.
We are doing a great many things right. Like all companies, we’re working hard to restructure costs and operations to make them affordable within new revenue realities. Unlike some, we’re trying to do that without throwing the baby out with the bathwater: keeping as much staff as we can in newsrooms and sales departments, emphasizing growth online to backfill eroding print revenues, sustaining the print franchise as much as possible, launching new products, learning new skills, and above all focusing on total audience growth as the best hope for both our finances and our community service mission.
We could manage in ways that might boost the stock price at the moment, or satisfy some analysts quicker, or raise more capital. But we’re managing for the mission, and with the perspective of a 150-year old company: for the long run.
We can’t control everything, and won’t do everything right anyhow. But we have great confidence in our ability as a company to chart a steady course through the changes and emerge as a mission-driven, public service news company. As long as we all stay focused on the mission and execute well every day, we’ll move steadily toward that.