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Death by a thousand cuts
By: Steve Rose, Publisher
The Kansas City Star has provided a tremendous public service by its in-depth series on downtown Kansas City, beginning May 18. The reporters spent months researching the facts.
The gnawing question is, in the future, will The Star be able or willing to dedicate so much of its resources to those kinds of exposes?
Buried in last week’s announcement of The Star’s new editor, Mike Fannin, was an off-hand quote from Fannin. He said, almost by-the-way, there would be significant layoffs and buyout offers this summer. This is from the editor, mind you, not the publisher. That means there will be huge cuts in the newsroom alone, not to mention other areas of the business.
Make no mistake, I am not gloating. An end of an era is rapidly upon us, and every newspaper is feeling it. The Sun has its own challenges. The Olathe News, formerly a daily, just became a twice-weekly. The newspaper industry is in a state of panic.
But The Star’s situation is far, far worse than most. That is not just because its advertising revenues and circulation are declining. It is because The Star was bought in 2006 from Knight-Ridder, just before the newspaper death spiral.
With interest payments on its $3 billion in debt, McClatchy’s stock has plummeted 80 percent since the purchase. The reason, besides the general decline of the industry, is that McClatchy blundered by concentrating most of its newspaper property holdings in the two worst advertising markets in America, California and Florida. As a result, advertising revenues last year plunged 16.8 percent, including a breathtaking 26 percent decline in classified advertising revenue, and this year is starting off just as bad, if not worse.
Meanwhile, online revenues at McClatchy were up a measly 2 percent in 2007 over the prior year. There is a lot of spin about online revenues as the salvation of newspapers, but that is, so far, just a hope and prayer. Nothing much is materializing from online revenues.
While The Kansas City Star is very profitable, perhaps the most profitable of the McClatchy chain, that does not matter. Our local newspaper is joined at the hip to a company that may not be able to make its debt payments and could very well go into default. While cuts at The Star were inevitable based on its own slumping performance, the pressures to cut faster and deeper are a matter of life and death for its parent company.
What does this mean to Kansas City, besides the fact that several hundred employees may disappear from an employment base of 1,347? (Many of whom are headquartered in downtown, which was not mentioned in The Star’s downtown series.)
It means unending cuts, particularly in the newsroom, will continue to diminish what we read, and the way our communities are covered.
Will The Star be able to afford a reporter dedicated just to health care? Can it afford a Washington bureau of its own? Can it afford a reporter who spends months on one series? Will The Star be able to cover the suburbs in a meaningful way? Where will the cuts come from? What will be lost?
This is a story just as big, if not bigger, than the fate of downtown. Because as our metropolitan daily dwindles, so does its oversight of government, and its commitment to send out reporters to cover stories that, in the future, will never see the light of day. It is death by a thousand cuts.
There will be no rejoicing at our newspapers when The Star newsroom layoffs are announced this summer. Kansas City needs vibrant, in-depth, watchdog news coverage. And as The Star retreats from its role, there is absolutely nothing on the horizon to take its place, certainly not by the Internet, where everyone expects to read all they want to read, for free, without the clutter of all those ads that pay for all those reporters.
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The gnawing question is, in the future, will The Star be able or willing to dedicate so much of its resources to those kinds of exposes?
Buried in last week’s announcement of The Star’s new editor, Mike Fannin, was an off-hand quote from Fannin. He said, almost by-the-way, there would be significant layoffs and buyout offers this summer. This is from the editor, mind you, not the publisher. That means there will be huge cuts in the newsroom alone, not to mention other areas of the business.
Make no mistake, I am not gloating. An end of an era is rapidly upon us, and every newspaper is feeling it. The Sun has its own challenges. The Olathe News, formerly a daily, just became a twice-weekly. The newspaper industry is in a state of panic.
But The Star’s situation is far, far worse than most. That is not just because its advertising revenues and circulation are declining. It is because The Star was bought in 2006 from Knight-Ridder, just before the newspaper death spiral.
With interest payments on its $3 billion in debt, McClatchy’s stock has plummeted 80 percent since the purchase. The reason, besides the general decline of the industry, is that McClatchy blundered by concentrating most of its newspaper property holdings in the two worst advertising markets in America, California and Florida. As a result, advertising revenues last year plunged 16.8 percent, including a breathtaking 26 percent decline in classified advertising revenue, and this year is starting off just as bad, if not worse.
Meanwhile, online revenues at McClatchy were up a measly 2 percent in 2007 over the prior year. There is a lot of spin about online revenues as the salvation of newspapers, but that is, so far, just a hope and prayer. Nothing much is materializing from online revenues.
While The Kansas City Star is very profitable, perhaps the most profitable of the McClatchy chain, that does not matter. Our local newspaper is joined at the hip to a company that may not be able to make its debt payments and could very well go into default. While cuts at The Star were inevitable based on its own slumping performance, the pressures to cut faster and deeper are a matter of life and death for its parent company.
What does this mean to Kansas City, besides the fact that several hundred employees may disappear from an employment base of 1,347? (Many of whom are headquartered in downtown, which was not mentioned in The Star’s downtown series.)
It means unending cuts, particularly in the newsroom, will continue to diminish what we read, and the way our communities are covered.
Will The Star be able to afford a reporter dedicated just to health care? Can it afford a Washington bureau of its own? Can it afford a reporter who spends months on one series? Will The Star be able to cover the suburbs in a meaningful way? Where will the cuts come from? What will be lost?
This is a story just as big, if not bigger, than the fate of downtown. Because as our metropolitan daily dwindles, so does its oversight of government, and its commitment to send out reporters to cover stories that, in the future, will never see the light of day. It is death by a thousand cuts.
There will be no rejoicing at our newspapers when The Star newsroom layoffs are announced this summer. Kansas City needs vibrant, in-depth, watchdog news coverage. And as The Star retreats from its role, there is absolutely nothing on the horizon to take its place, certainly not by the Internet, where everyone expects to read all they want to read, for free, without the clutter of all those ads that pay for all those reporters.
Comments on "Death by a thousand cuts"
Comments are limited to 200 words or less.ldp wrote on Jun 23, 2008 10:47 AM:
" Thank God and The Sun for Steve Rose! "
John Altevogt wrote on Jun 11, 2008 5:39 PM:
" Newspapers need to get out of the opinion business and offer more solid, unbiased reporting. Quality journalism is worth its weight in gold while opinions (this one included) can be had easily and cheaply on every blog on the Internet.
The Star needs to keep its reporters and fire all of those useless VPs they have wasting time, money and good newsprint on the editorial board. Give us the news, we'll figure out our own opinions. "
The Star needs to keep its reporters and fire all of those useless VPs they have wasting time, money and good newsprint on the editorial board. Give us the news, we'll figure out our own opinions. "
HST wrote on Jun 11, 2008 5:14 PM:
" I'll only be happy when the Sun fires you, Steve Rose. That will improve the Sun. "