Thursday, December 25, 2008

Talk is cheap, but here's my money

I suppose most people had better things to do Christmas Eve than read newspaper and journalism blogs. Sadly, I was not among them, and couldn't restrain myself today from posting a comment on one of the latest Jeff Jarvis postings about why those of us laboring in newspaper companies have no hope.

In fact, that's the title of the Buzzmachine musing: No hope. You can read it in full there, but here's the particularly smirky part about McClatchy:
* McClatchy shares hit 60 cents yesterday. As I write this, it’s up to a big 78 cents. Bubble! Gatehouse hit 4 cents (and I’d still short them given their current attitude); market cap: $2.3 million. See Alan Mutter’s excellent analysis of how debt did in papers. I’d say it’s more than that: It was misplaced optimism in the form and in the incumbents. If these papers had instead taken on debt to innovate and create or to buy innovates (a la the New York Times buying About), that might have been productive. Instead, they bought newspapers, which was only an indication of how snug their blinders were.


Sigh. We've been here so often before.

Here's what I said in the comments on Jeff's blog:

I get so fucking tired of correcting you, Jeff. Has it *ever* occurred to you to do some reporting — like asking questions of those involved — before pronouncing such apocalyptic conclusions?

It’s perhaps more than interesting that you so frequently refer to blinders; I’ve never read an analyst who is so consistently, persistently wrong about basic facts.

Yes, the stock price sucks. As you know (or should) that reflects Wall Streets’ analysis of our prospects. And we all know those are some smart guys who always get it right, huh? To cite stock price as a definitive measure of performance is as bad a sin as those who ran their companies mainly to maximize stock price.

This much is clear: When McClatchy demonstrates, as it will, that it is coming out of the the downturn/transformation challenge whole, that price will rise again.

Yes, debt is tough to manage when revenues fall. No shit. But I guess you refer to Alan Mutter’s analysis as “excellent” simply because it confirms your beliefs. It’s anything but excellent. It’s very thin soup, persuasive only to people who know less about these issues than he does.

He opens by lumping all the news companies together and saying “The details in each case may be different. But the story is the same.” Nothing could be more wrong. It’s *all* about the differences. To equate the Tribune’s debt with McClatchy’s KRI debt is simply looney. Stop repeating this trash; it makes you look stupid.

Your post is entitled “No hope.” Bullshit. McClatchy remains a strongly profitable company (you can look it up at the SEC). It’s never missed a payment and isn’t about to. Lehman Bros failed; GM is failing; even in the same economic climate, McClatchy is not. There is much hope.

Online sales and revenues continue to grow at double-digit rates. Our percentage of revenue from online leads the industry (excluding, perhaps, the national papers) and continues to grow. Perhaps more importantly, the company is so much more efficient now than two years ago (to the tune of some $350 million in reduced expenses) that it doesn’t have to return to anything like historic margins or revenues to be successful.

You know that I have long offered to wager $1,000 on McClatchy’s prospects with anybody who doesn’t believe me. Let’s make it personal, shall we? Show me your money, Jeff.


Because you’re wrong. Consistently, persistently wrong in a way that hurts thousands of McClatchy employees who are working hard every day to advance the interests you profess to believe in but routinely dismiss with a shrug and near-total disregard for facts or reporting.

Stop it.

\-\/\/

P.S. Re Pew: The internet IS NOT a source of news; it’s a delivery system.

16 comments:

  1. Howard,
    It's Christmas. Can you at least talk civilly on Christmas.
    I'll take your bet if we agree to definitions and terms - what is success?
    But first answer this: Was buying Knight Ridder smart?
    My argument in this post is that having too much optimism about paper as paper is what led McClatchy to make what is turning out to be the disastrous acquisition of Knight Ridder. Those are the blinders to which I refer. They're made of paper.
    I've heard your CEO speak more than once and even though this makes you mad, I did hear him talk for far too long about the strength of papers as papers and about the change being cyclical. If he has seen the light, the question is whether he has seen it in time.
    The thousands of employees who are going to be hurt are those who are laid off to deal with issues of the debt and those who had their pensions in the company's stock. My opinion is not what's hurting them. And this is about differing opinions Howard.
    P.S. The internet is not a medium. Paper is a medium. The internet is not.

    ReplyDelete
  2. "Clueless," "idiots," "sucking toes" "doomed," "no hope," "earplugs well stuffed and blinders tight."

    Please don't condescend to advise me about civility, Jeff.

    And please stop repeating that you "know" Gary Pruitt truly didn't understand the secular nature of news media transformation. I went to work for him in 1995 as assistant for new media strategies, and I know for certain he's been ahead of that curve longer than anybody I know in a media leadership job. You're just wrong. Show me some evidence, or stop. (Talking about the strength of papers doesn't conflate with believing the problems are cyclical. The fact that the stars grow dim in the morning does not cause the sun to rise.)

    McClatchy NEVER allowed pensions to be invested in company stock. We also match 401(k) plans, and don't allow ANY of that to be invested in McClatchy stock. You're just wrong again. This is a metter of fact, not opinion. Why don't you check these things before you say them?

    The bet: I say McClatchy will be here in a year, profitably publishing newspapers (and more) and doing public service journalism. What do you say?

    P.P.S. I never said the internet was a medium. I said it wasn't a news source, but a delivery system for news.

    ReplyDelete
  3. Howard,

    I stand corrected and clarified on the 401ks, but I wonder: do a lot of employees have options now flooded?

    Let me put it this way: I suspect you can't agree with this in public but might in private.... What I'm really saying is that I think it would have been a far wiser strategic investment on McClatchy's part to have supported what you did there than to have bought Knight Ridder (out of too much faith in papers as papers).

    As for the best: I won't disagree that McClatchy will likely be around publishing in a year. But I'd hate to think that that would be a sufficient definition of success in an era of such extreme change.

    Finally, on the last point, I'll say that the internet is not a means to deliver information. News is not and will no longer be so one-way. The internet is much more: a means for collaboration, cooperation, curation (and I didn't intend the alliteration).

    ReplyDelete
  4. Well, this is one thing we can certainly agree on Jeff (and there are many others): My stock options do indeed suck wind. I have been collecting them since the company went public in 1988, and none of them are worth anything now.

    I don't want to suggest stock price doesn't matter, just that it isn't the measure of all things. My retirement may be a little diminished by the lost value of those options, but I'm confident it will be enriched by watching McClatchy emerge successfully as the model of a new public service journalism company.

    Thanks for participating -- here and elsewhere.

    ReplyDelete
  5. Anonymous10:54 AM

    "Fuck." "Bullshit." Flexing your post-corporate lexicon? Classy, Howard, really classy. You are a bona fide blogger now, dude.

    ReplyDelete
  6. Anonymous1:38 PM

    Thx for the smack-down, Howard. It's like a half-time pep talk for us McClatchy folks. Nothing like the cold, hard facts to refute the lameass bilge that that dude is spewing.

    Ain't nothin' wrong with a little expletives to emphasize the excellent points you make. "Ain't" probably made Jarvis cringe, too. Who is that fool, anyway?

    It's nice to hear you "laying it down" for the jackass snipes who are constantly trying to dig our graves because they so desperately want to dance on it!!! I love it.

    I believe in our mission. I see firsthand the positive impact that we make every day in our community.

    ReplyDelete
  7. Anonymous8:27 AM

    Of course buying KR was an error - error is Tony Ridder's middle name. (see relocation: KR to Bay area.) The dope Par is no better.
    Howard - why the rage. We all admire and respect you dude. This Jeff nitwit could not have made the slog you did in newspapering and you need not duel with him.
    Howard, look forward. It is clear McC. has better days behind than ahead. Not your problem, not your making. Go forth and prosper. Sorry about the options...

    ReplyDelete
  8. Anonymous8:52 AM

    Just waiting for good times to come back is not a business strategy. This has been a constant complaint on this blog, going back past the days of the burning bridge, etc. Where is the business strategy behind the KRI purchase? What is the business plan behind MNI today? I suggest there is none.

    ReplyDelete
  9. Just as long as you've been making this "constant complaint," I have been patiently trying to explain why your perspective is so superficial and wrong.

    McClatchy operates the leading local media company in 29 premium market cities diverse in population, geography and demographics but all characterized by growth well in excess of national averages. While revenues have fallen, partly due to the internet and partly due to economic conditions, all are still profitable when lots of other businesses are not. Total audience is growing. Digital revenue is growing by double digits.

    How is this not a business strategy?

    ReplyDelete
  10. Anonymous10:50 AM

    Howard,
    I used to work at the Lexington Herald-Leader, and I remember the elation we all felt when McClatchy bought Knight Ridder. It felt like we'd been delivered from the lion's den.

    It was clear then that you guys believed in newspapers and were committed to quality journalism.

    In hindsight, you probably had too much faith in newspapers -- at least the big ones in California and Florida. But if everyone had your passion for news, the industry would be better off.

    I hope you have a Happy New Year and an enjoyable retirement. And I hope the company turns the corner in 2009.

    ReplyDelete
  11. Anonymous4:47 PM

    Are you kidding? Everybody knows the Internet is a medium, Howard: because nothing on it is well-done. Especially "newspaper death watch" commentators. Most of these bilgerats are mostly malcontents and never-weres.

    Think about Knight Ridder Digital for a second, a company that had a golden strategy: go forth and make money off the Internet, because the papers will supply the content for free. Ken Doctor couldn't even make that work, so now he's another lame commentator as well.

    ReplyDelete
  12. Jeff Jarvis is a charlatan who makes a living "consulting" for the very MSM demons he slanders. The question seems to be why does anyone listen to him?

    ReplyDelete
  13. Anonymous8:04 PM

    Howard,
    I thought McClatchy suspended its 401(k) matching this fall.
    I truly salute your contributions to newspapering and to McClatchy and wish you the best in the next phase of your life. But I have mixed feelings. You've spent the past couple years urging us McClatchyites to "ride to the sound of the guns." Now it looks to us like you are riding in the other direction. By the time the economy recovers, many McClatchy newspapers will look like shadows of their former selves.
    It is a sad time for all of us in this business we cherish.

    ReplyDelete
  14. Anonymous6:57 AM

    Though Weaver is correct that McClatchy does not do its 401(k) matches in company stock, Knight Ridder did. So many, many employees had substantial 401(k) money in the new McClatchy and took serious losses as the stock price went down the toilet.

    ReplyDelete
  15. Anon 627 is right; I forgot that. That would be mighty painful. I hope many of those folks have time to wait for the stock to recover some ground, which I think it will. Someday the company's retirement plans will be "harmonized" and I presume the old McClatchy strategy of diversification (no company stock) will prevail.

    ReplyDelete
  16. Anonymous7:38 AM

    While others focus on lexicon and civility - or lack thereof - I think Jeff and others are missing the point. Which is: If Jeff were a working journalist in ANY medium, he would be fired because he doesn't do any reporting of his own. He cites sources that agree with his outlook. The last time Jeff picked up a phone to do an actual interview was, well, never.

    ReplyDelete

 
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