Blood on the Newsroom Floor: MediaNews merger


MediaNews Group, the company that produces the largest share of California’s newspapers, is merging managerial functions with the Journal Register Co., with the new operation headed by Journal Register boss John Paton.

Paton, who is one of the newspaper world’s leading advocates of a transition to the digital realm, becomes the boss of most San Francisco Bay Area newspapers, now published by MediaNews’ Bay Area News Group, BANG [previously] — which had just announced a major consolidation of publications, transforming eight newspapers into three.

A hint of just what changes may lie ahead for California’s MediaNews papers may lie in this excerpt from a GigaOM post by Mathew Ingram:

Paton’s ascension to the executive suite at Media News wasn’t really a surprise (he is also CEO of a new management entity called Digital First Media). Martin Langeveld — a former Media News publisher — and analyst Ken Doctor have noted recently that moving Paton into that job would make sense, not just because Media News is looking for help in transforming the company but because both it and Journal-Register Co. share an investor: Alden Global Capital, which has been buying up stakes in newspaper companies throughout North America (including the Canadian chain Postmedia, where Paton is an advisor).

Paton has also made it clear that his new approach at Media News will incorporate a crowdsourcing strategy as well, something that could involve more experiments like the “community newsroom” that one Journal-Register newspaper recently launched — which allows readers to come in and help themselves to free coffee and free Internet access, and take part in editorial meetings. Media News has also been experimenting with crowdsourcing to a certain extent: it recently launched a mobile app called TapIn BayArea that allows readers to contribute photos and other news items.

For Bay Area newspaper readers, the real question is whether or not “crowdsourcing” means the layoff of even more journalists from BANG’s already severely downsized staff.

Paton is all about outsourcing, as he said in a January interview with News and Tech, describing his strategy for saving the Journal Register Co., which he’d been named to head less than a year before:

It’s a two-part strategy. The first is outsourcing. Yes, it’s blood on the floor, but why is outsourcing a $4 billion a year industry? Because outsourcers can do their jobs better than we do. It’s not our core competency to print and deliver. We do that because we have to; in fact, 66 percent of our cost structure is devoted to things we don’t want to do. Only one-third is content creation.

People keep talking about monetizing content. I’m not doing that. I’m monetizing the audience I have.

The official merger announcements

First, the press release from MediaNews:

MediaNews Group, Inc., the nation’s second largest newspaper company as measured by circulation, (“MediaNews”) today announced that it has appointed John Paton as CEO, and has entered into an agreement with newly-created Digital First Media, headed by Mr. Paton, to provide management services and lead the execution of the Company’s business strategy. Mr. Paton and Digital First Media will also manage The Journal Register Company. This arrangement provides MediaNews with immediate cost benefits, and the ability to leverage the combined scale and expertise of MediaNews and Journal Register Company to benefit both companies, respectively.

Under this agreement, the independent directors of the board of directors of MediaNews will oversee the activities of Mr. Paton and Digital First Media on behalf of MediaNews, and will make recommendations to the Board of MediaNews, which will have ultimate responsibility with respect to the arrangement with Mr. Paton and Digital First Media.

“We said in January that MediaNews was intent on continuing its transformation from a print-oriented newspaper company to a locally focused provider of news and information across multiple platforms to profitably address the rapidly changing industry landscape,” said Chairman Dean Singleton. “At the forefront of our efforts was developing a successful digital strategy. I have known and respected John Paton for more than 20 years. With ‘digital first,’ John has successfully implemented just such a digital strategy for Journal Register. We are delighted to tap into John’s experience as we accelerate further our successful transition to a digital world.” Mr. Singleton, who announced in January his intention to step down as CEO of MediaNews, will remain chairman of MediaNews, and publisher of The Denver Post and The Salt Lake Tribune. Mr. Singleton is also the Chairman of The Associated Press.

Gordon Paris, who has served as interim President of MediaNews since the beginning of the year, and Michael Sileck, who has served as interim Chief Revenue Officer, will continue in those roles throughout a transition period. Mr. Paris will remain a director of the company and after the transition period will serve as a special advisor to the company focusing on strategic transactions. Mr. Sileck will be stepping down as a member of the board and will become a special advisor to the board.

Mr. Paris said: “The board of directors was determined to select leadership for MediaNews that would accelerate the progress of the Company already underway. We are pleased to have reached this agreement with Digital First Media, which followed an extensive review of potential CEO candidates. John Paton has developed a highly innovative media business model built around digital that has achieved both content of the highest quality and commercial success.  We see tremendous benefit for MediaNews from teaming up to take advantage of Digital First Media’s expertise and the benefits of scale that both we and the Journal Register can accomplish as independent entities collaborating together.”

Mr. Paton said: “I am very excited to be working with the MediaNews Group and Journal Register Company teams to continue the Digital First transformation. This initiative creates a local news powerhouse with more than 880 multi-platform products in 18 states, serving more than 57 million people a month. It will be one of the largest and most compelling news platforms in the country for consumers and advertisers.”

Digital First Media represents the codification into a management company of a digital strategy that Journal Register Company has been pursuing with great success since February 2010, when John Paton was named Chief Executive Officer of Journal Register Company. MediaNews will benefit from that experience, and from cooperation with Journal Register Company, as it continues its own evolution to successfully compete in the new media landscape.  Mr. Paton, currently a member of the board of directors of Journal Register Company, has been elected to the board of directors of MediaNews Group. Mr. Paton is also a member of the board of directors of the Newspaper Association of America.

About Media News Group

MediaNews Group, Inc. (www.medianewsgroup.com) is the nation’s second largest newspaper company as measured by circulation, with headquarters in Denver, Colorado. MediaNews Group and its affiliated companies publish 57 daily newspapers and more than 100 non-daily publications in 11 states. In addition, MediaNews Group provides programming and operational services for a CBS affiliate in Anchorage, Alaska, and four radio stations in Texas licensed to Affiliated Media, Inc. FCC Trust. MediaNews maintains 187 Web sites.

About Digital First Media

Digital First Media, a division of the Journal Register Company to be headquartered in New York City, is a newly-created Company formed to jointly manage Journal Register Company and MediaNews Group.

About Journal Register Company

Journal Register Company is a leader in local news and information in 10 states. The Company’s more than 350 multi-platform products reach an audience of 21 million people each month. For more information visit the company website at www.JournalRegister.com.

And here’s the parallel announcement from Journal Register Co.:

Journal Register Company Announces The Creation of Digital First Media Inc.

Digital First Media to Manage Journal Register Company and MediaNews Group; John Paton Named Chief Executive Officer of Digital First Media

Digital First Media to Leverage Scale Opportunities between MediaNews and Journal Register Company Creating Local News Powerhouse with more than 880 Multi-Platform Products in 18 States Serving more than 57 million Americans per month

September 7, 2011

NEW YORK, NY. – Journal Register Company, one of the of nation’s leading local news and information companies, announced today the creation of Digital First Media Inc. Digital First Media will manage both Journal Register Company and MediaNews Group Inc.

John Paton, as the Chief Executive of Digital First Media, will act as CEO of both Journal Register Company and MediaNews Group.

In a separate release, MediaNews Group, the nation’s second largest newspaper company as measured by circulation, announced its appointment of Mr. Paton as CEO and the new agreement with Digital First Media. Mr. Paton, a director of Journal Register Company, has also been appointed to MediaNews Group’s board of directors. Mr. Paton and Digital First Media will report to the boards of both MediaNews Group and Journal Register Company.

This arrangement provides MediaNews and Journal Register Company with immediate cost benefits, and the ability to leverage the combined scale and expertise of both companies for their mutual benefit.

“This allows these two great companies to accelerate our Digital First strategy of transitioning from what have largely been print-centric businesses to modern, multi-platform media companies focused on local news and advertising,” said Mr. Paton, who is also a director of the Newspaper Association of America. “I am very excited to be working with MediaNews Group and the Journal Register Company teams. This initiative creates a local news powerhouse with more than 880 multi-platform products in 18 States serving more than 57 million Americans per month for the benefit of our communities, customers and employees.”

“Media News is intent on continuing its transformation from a print-oriented newspaper company to a locally focused provider of news and information across multiple platforms. At the forefront of our efforts is developing a successful digital strategy. With ‘Digital First,’ John has implemented just such a digital strategy for Journal Register Company. We are delighted to tap into John’s experience as we accelerate further our successful transition to a digital world,” said Dean Singleton, who will step down as CEO of MediaNews Group. Mr. Singleton, who is the Chairman of The Associated Press, remains Chairman of MediaNews Group and the publisher of the Denver Post and Salt Lake City Tribune.

Digital First Media represents the codification into a management company of a digital strategy that Journal Register Company has been pursuing with great success since February 2010, when John Paton was named Chief Executive Officer of Journal Register Company. MediaNews will benefit from that experience, and from cooperation with Journal Register Company, as it continues its own evolution to compete in the new media landscape.

About Media News Group
MediaNews Group, Inc. (www.medianewsgroup.com) is the nation’s second largest newspaper company as measured by circulation, with headquarters in Denver, Colorado. MediaNews Group and its affiliated companies publish 57 daily newspapers and more than 100 non-daily publications in 11 states. In addition, MediaNews Group provides programming and operational services for a CBS affiliate in Anchorage, Alaska, and four radio stations in Texas licensed to Affiliated Media, Inc. FCC Trust. MediaNews maintains 187 Web sites.

About Digital First Media
Digital First Media, a division of the Journal Register Company to be headquartered in New York City, is a newly-created Company formed to jointly manage Journal Register Company and MediaNews Group.

About Journal Register Company
Journal Register Company is a leader in local news and information in 10 states. The Company’s more than 350 multi-platform products reach an audience of 21 million people each month. For more information visit the company website at http://www.JournalRegister.com.

And Paton’s own announcement, from his blog:

Folks,

Today marks another important step for Digital First.

As announced earlier this morning, we have formed a new company – Digital First Media Inc. It will manage both the Journal Register Company and Media News Group and its mission will be to accelerate the transformation of both these great firms to a modern, multi-platform media company focused on local news.

And, let me tell you, it will be a powerhouse out of the gate with more than 880 products in 18 states serving more than 57 million Americans per month. More than 41 million of those customers are digital-only creating one of the largest online news networks in the country.

I will head Digital First Media as Chief Executive Officer as well as be CEO of both JRC and Media News.

Newspaper companies aren’t supposed to be able to change. Haven’t you heard?

Here’s another one: Digital dimes can’t replace Print dollars.

Then this: No one wants what we have to offer.

And then this one: Digital revenue will never be able to pay for a newspaper’s newsroom.

We are supposed to be out of ideas, out of money and out of energy. To our competitors, I say keep thinking that. It will make this transformation easier.

At JRC we have blown up a lot of that received wisdom from newspaper critics.

Since implementing our Digital First strategy in mid 2010 our Digital audience has doubled to more than 12.3 million uniques and our entire audience has grown from 14.9 million monthly customers on all platforms to nearly 21 million customers.

That’s more customers for what we have to offer. A lot more.

In Q2 of this year, 10 of JRC’s 18 dailies are up year over year in advertising or within 2% of last year’s ad revenues because of digital advertising growth. JRC newspaper digital revenue grew more than 81% year over year in Q2. That’s against an industry average of less than 10%.

Digital dimes can replace Print dollars.

And if our dailies continue on the trend they are on right now, by the end of the year they will have brought in more digital revenue than the costs of running their newsrooms.

Digital revenues can pay for newspaper newsrooms.

This battle to transform newspapers is far from over but now under the Digital First banner Journal Register Company’s employees are joined by the innovative men and women of Media News Group.

From storied titles like the Denver Post, San Jose Mercury News and St. Paul Pioneer Press an enormous amount of digital initiatives have been underway to transform Media News Group.

Now, together, we are going to accelerate that transformation.

All of us have one goal – to preserve quality journalism in the communities we serve.

And we are going to bring along the Crowd to help us. News is created and consumed very differently these days. The folks we used to call the Audience have a stake in this because they have a stake in their communities. The same communities we are dedicated to serving.

We believe without quality journalism there is no democracy. No First Amendment without a vibrant Fourth Estate.

This is the proposition we are dedicated to.

Collectively, we will harness the energy of nearly 11,000 employees in JRC and Media News to meet that challenge.
Because, we are not of out ideas, we are not out of energy.

We are just getting started.

Until next time, John.

One response to “Blood on the Newsroom Floor: MediaNews merger

  1. Pingback: Blood On The Newsroom Floor: MediaNews Merger « Denver Newspaper Guild

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