NewsInc., Nov. 24, 1997: IT WAS THE BEST OF TIMES, IT WAS THE WORST OF REACTIONS | Wall Street's take on Star Tribune deal shows it has much to learn

Nov. 24, 1997, Vol. 9, No. 23

IT WAS THE BEST OF TIMES, IT WAS THE WORST OF REACTIONS

Wall Street's take on Star Tribune deal shows it has much to learn

OAKLAND, Calif. – "I can't get no satisfaction."

Mick Jagger strutted around the stage of the Oakland Coliseum last week, claiming that at his advanced age, stature and wealth he is incapable of achieving enjoyment in life.

If the leader of rock 'n' roll's Rolling Stones really wants to see a lack of satisfactory outcomes, allow us to turn his attention to the newspaper business:

In what should have been a fitting legacy to the skills of former executives such as Erwin Potts and the late C.K. McClatchy, McClatchy Newspapers Inc. of Sacramento acquired Cowles Media Co. for $1.4 billion. For McClatchy's efforts, Wall Street punished the company, dropping its stock value more than $6 over a five-day period.

Though most analysts characterized the price tag on the company – which encompasses not only Minneapolis' Star Tribune but also three magazine publishing companies – as a "full price," it is clear that Wall Street thought McClatchy overpaid.

Once again, I am forced to say that the newspaper business has not educated the stock market adequately about either the value of our industry or how things work around here. There are only two ways to make a company bigger: either grow it or acquire things. If the stock market wants newspaper companies to get bigger, it has to come to terms with the fact that it's damn difficult to grow newspapers (see below).

The true survivors of the idealistic ’60s and ’70s may be the Rolling Stones, but another almost-extinct species is the newspaper ombudsman. Throughout that era, the idea of a mediator between the public and the newspaper was always hailed as a great idea. Unfortunately, too few papers adopted the concept and today the newspaper business has but 34 of them.

To find out what happened to the ombudsman movement, I sent my former San Francisco neighbor, Julius Duscha, out to uncover the situation. Duscha, a former Washington Post editor who ran the Washington Journalism Center for many years, was on the ground floor of the ombudsman movement. He gives us a good view of what happened then and what will happen in the future.

There is no way to be satisfied with the latest FAS-FAX numbers from the Audit Bureau of Circulations. As Senior Editor Pete Wetmore reports inside, even the "big" growth numbers hovered just above the 10 percent range.

Wetmore talks to the winners and losers in the circulation numbers game and details their strategies.

With Wall Street breathing down our necks (see above), it is imperative that the newspaper business start getting those growth numbers up (and let's not forget churn either – Mark Willes of the Los Angeles Times told the New York Times that his paper was churning 85 percent of all its new subscribers; retention should be 85 percent, not churn).

Far be it from me to criticize Mort Zuckerman, owner of the New York Daily News, but I certainly became less satisfied with him when he and the legendary writer, reporter and editor Pete Hamill parted ways a few months back. Hamill – who you've probably seen on TV with the likes of Larry King – seemed to have a handle on New York City that many of Zuckerman's previous editors had not.

Nonetheless, it was heartening to read Wetmore's interview with the new editor of the Daily News, Debby Krenek. She sounds like a good journalist who has a firm hand on the tiller and will guide the paper to many of the same kinds of stories that were Hamill's trademark.

No, as Jagger and his band skirted the rainy Northern California skies last week (one performance was neatly bracketed by torrential downpours, leaving at least one ’60s survivor a little more wet than his 40s body preferred), it has become clear that the newspaper business will be forced to skirt the issue of satisfaction for a little while longer.

– David M. Cole

Inside ...

McClatchy CEO prepares to take home a northern star

Idealism of the ’60s still is alive in newsrooms that have ombudsmen

Circulation numbers tell a story, but sometimes it's the wrong one

New Daily News editor puts enterprise reporting at the top of her list

Of sales, investments, introspection and rules that may change

New(s) Media seeks a grammarian

Persons

IT WAS THE BEST OF TIMES, IT WAS THE WORST OF REACTIONS

Wall Street's take on Star Tribune deal shows it has much to learn

From NEWSINC., Nov. 24, 1997, Copyright © 1997, The Cole Group. All Rights Reserved.