Archive for the ‘Detroit’ Category

Columnist: Could this be Detroit’s new Edsel?

December 14, 2008

[Famous flops? A 1958 Ford Edsel vs. a 2008 Gannett Griffon]

Ending most home delivery of the Detroit dailies is “less a bold innovation than a Hail Mary pass,” Chicago Tribune media columnist Phil Rosenthal writes today.

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How Hunke persuaded Singleton to pull the trigger

December 13, 2008

[Detroit bosses: Hunke, Singleton]

The CEO of Gannett’s Detroit business, Dave Hunke, reportedly overcame reservations from GCI business partner William Dean Singleton, in order to reach this historic moment: A high-stakes plan to save the city’s money-losing dailies by abandoning most home delivery. Singleton, CEO of MediaNews Group, wanted Hunke to first run the idea past major advertisers, I’ve been told. Those presentations apparently went well; unless Gannett gets cold feet, an announcement is expected Tuesday.
Gannett owns 95% of the Detroit Media Partnership, the joint operating agency that publishes the two papers: Gannett’s Detroit Free Press and The Detroit News, which is owned by MediaNews. The Denver company owns the JOA’s other 5%.
Even with that controlling stake, Hunke may have needed Singleton’s formal OK because the plan is such a radical departure from Detroit’s business model. (To be sure, Singleton could also have given in because he’s gotten so distracted by problems in Denver, where he’s locked in another JOA, with an increasingly desperate E.W. Scripps.)
Culprit: Auto industry meltdown

Gannett is one of untold businesseses threatened by the slow-motion collapse of the Big Three automakers, long the engine of Detroit’s economy, according to this Freep video by Alexandra Bahou:

Please post your thoughts in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Reports: Detroit dailies to curtail home delivery

December 12, 2008

Here comes The New York Times, now reporting: “The Detroit Free Press and The Detroit News are planning to stop home delivery most days of the week and print a pared-down version of their papers for newsstands on those days, according to people briefed on the plans. They will be the first major dailies in the country to take such drastic steps.”

The Wall Street Journal reported earlier that Gannett hasn’t made a final decision. The paper cites a source it did not identify. “But the leading scenario set to be unveiled Tuesday would call for the Free Press and its partner paper, The Detroit News, to end home delivery on all but the most lucrative days — Thursday, Friday and Sunday,” the WSJ says. “On the other days, the publisher would sell single copies of an abbreviated print edition at newsstands and direct readers to the papers’ expanded digital editions.”

The changes are likely to result in significant job cuts, the story says. “Because the Detroit papers will continue to publish daily electronic versions, the cuts are expected to come mostly, if not entirely, from outside the newsroom, according to sources,” the WSJ says.

Detroit to address reports of ‘significant changes’ Big print, circ shift rumored | Stock plunges 12%

December 11, 2008

Gannett’s Detroit operations early next week will address newly published accounts of a secret project, designed to save the city’s two struggling newspapers. Speculation is focused on a rumored plan to end home delivery of the Detroit Free Press and The Detroit News for all but two or three days a week.

This would make the 300,000-circulation Free Press and the 177,000 News by far the biggest U.S. papers yet to drop, or effectively drop, a day’s publication, Editor & Publisher is now reporting. Such a switch, I wrote this morning, would represent an enormous gamble by Gannett and its partner, MediaNews Group, to stanch multimillion-dollar losses in a city whose economy is cratering around the auto industry crisis. Hanging in the balance are the jobs of perhaps 2,000 employees.

Wall Street investors weren’t happy: Gannett’s stock plunged 11.9% this afternoon, closing at $7.59 a share, down $1.02. Meanwhile, the widely watched S&P-500 index fell a smaller 2.9%.

Hunke: ‘Reposition’ for growth
In a memo regarding a plan reportedly named “Project Griffon,” CEO Dave Hunke said the Detroit Media Partnership has been “exploring various scenarios” to “ensure two strong newspaper voices in the community.” Gannett has controlled 95% of the partnership through a joint operating agreement, reorganized in 2005.

Hunke’s memo: “In the past 24 hours you have no doubt heard a lot of rumors and several news reports about significant changes at the Detroit Free Press and The Detroit News. Clearly, over the past months we have been exploring various scenarios to reposition the companies for growth and to ensure two strong newspaper voices in the community. We plan to share details early next week with you, as well as with readers, advertisers, unions and the community. In the meantime, let’s continue to focus on doing the best job we can and on building the strongest relationships we can among ourselves and with our customers.”

Tuesday announcement?
Hunke’s memo follows my post this morning, speculating that an announcement on Project Griffon could come as early as Tuesday. Looks like this story has legs after all.

A tipster says the vice president of circulation also advised employees: “Just wanted to remind everyone that all inquiries from media should be directed to Susie Ellwoods office.” (Gannettland is an even smaller world than I thought: Ellwood and I worked together at The Arkansas Gazette in the late 1980s, when Craig Moon — now USA Today publisher — was the Little Rock paper’s chief executive. Of course, back then, she had a different surname.)

Earlier: Motown, Project Griffon — and that secret PM code

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

[Image: this morning’s Freep and News, Newseum]

How Detroit got scooped on its own big story

December 11, 2008

It appears that a certain well-known Gannett executive has been talking privately to other news media for some time about big changes coming to GCI’s Detroit businesses — in effect, making it possible for rivals to scoop the executive’s own papers there.

Meanwhile, here’s the man with a plan: Detroit Newspaper Partnership CEO Dave Hunke, in a year-ago TV commercial, promoting the newspapers’ news online; I found this on the joint operating agency’s YouTube channel.

Related: More video favorites on Gannett Blog‘s YouTube channel

Moodys: GCI partner MediaNews headed for default

December 11, 2008

That would add even more pressure on the unfolding Detroit drama, where MediaNews Group under CEO William Dean Singleton (left) owns 5% of the Detroit Media Partnership joint operating agency; Gannett owns the rest.

From trade journal Editor & Publisher‘s just-posted story: “Moodys Investors Services predicted Thursday that William Dean Singleton‘s MediaNews Group will soon be in at least technical default of its credit agreement — with a debt load that is nearly as staggering as the leverage that led Tribune Co. to seek Chapter 11 bankruptcy protection.”

MediaNews disagrees with Moodys, and rejects E&P‘s comparison to Tribune. Gannett and MediaNews are also tied together through the Texas-New Mexico Newspapers Partnership. Meanwhile, Gannett is partners with Tribune in two ventures: employment website CareerBuilder, and website entertainment chain Metromix.

Mutter: Detroit plan ‘eviscerates’ newspaper model

December 11, 2008

Newspaper industry blogger Alan Mutter (hi, Alan!) says in a new post: “The reported plan to cut home delivery to just a few days a week at the Detroit dailies does not merely tweak the classic newspaper model. It eviscerates it, perhaps mortally. While this bold initiative may restore the short-term profitability of the Detroit Free Press, The Detroit News and the joint operating agency that serves them, the experiment in non-daily home delivery could well be self-defeating in the long run.”

Crain’s: Detroit ready to lay off up to 300 staffers

December 11, 2008

The business-news weekly says Gannett’s Detroit operations are expected to make job cuts of “possibly up to 300 staffers.” Crain’s does not source that information, however. It reports that Detroit Media Partnership CEO Dave Hunke said last month that staffing levels would be addressed as part a first-quarter strategic plan, “which is what next week’s announcement is expected to detail.”

Crain‘s says today that calls to Hunke’s office were referred to Leland Bassett, CEO of public-relations firm Bassett & Bassett in Detroit. “The Detroit Media Partnership is looking at everything right now. No decisions have been made,” he told Crain’s.

Detroit employs as many as 2,000 workers, making it one of Gannett’s single-biggest worksites. Any cuts there would follow nearly 2,000 newspaper jobs eliminated last week in GCI’s ongoing mass layoff.

Blogger: Why MediaNews won’t bolt from Detroit

December 11, 2008

Martin Langeveld explains why struggling business partner MediaNews Group is unlikely to provide an easy solution to Gannett’s dilemma, by simply abandoning the GCI-controlled joint operating agency that publishes Detroit’s two newspapers.

“Gannett might wish that MediaNews would similarly fold their tent and leave Detroit, but that won’t happen,” he writes today in a post, citing this U.S. Securities and Exchange Commission document filed by MediaNewsGroup. “Under the terms of the Detroit JOA, MediaNews is ‘reimbursed for its news and editorial costs associated with publishing The Detroit News,’ and if the JOA is profitable, it also receives a ‘fixed preferred distribution’ set at $4 million for 2008 and 2009, and declining in later years.”

He continues: “In other words, MediaNews is guaranteed not to lose money in Detroit. Assuming the JOA is currently in the red, they’re forgoing the fixed preferred distribution, but their newsroom expenses are fully covered. (By contrast, in Denver, E.W. Scripps had to fund news operations out of the meager JOA proceeds, so it was operating at a loss.)”

[Image: today’s News, Newseum]

Motown, Project Griffon — and that secret PM code

December 11, 2008

Here’s the Executive Summary of what anonymous readers and senders of e-mail to yours truly have been whispering about in comments here and here over the past week. (Who knows? Maybe some of what follows is even true!)

The Gannett-controlled publisher of the Detroit Free Press and The Detroit News is working on something super-duper-secret called “Project Griffon.” It would represent an enormous gamble by Gannett and its partner, MediaNews Group, to stanch multimillion-dollar losses in a city whose economy is cratering around the auto industry crisis. Hanging in the balance are the jobs of perhaps 2,000 employees.

Yet with nothing to lose but, well, more losses, the idea is to blow up the traditional newspaper business model in an especially dramatic way. A formal announcement could come as soon as Tuesday — if you believe the speculation.

The concept explained
Under the purported plan, one or both Detroit papers would end home delivery entirely, except for perhaps two or three days a week — the more-lucrative Thursday, Friday and Sunday editions. Other days, there would be some sort of slimmed-down single-copy-only version. And everyone would be encouraged to subscribe to already-available electronic editions of the Freep and the News.

Stoking speculation: this widely circulating link to a special Freep subscription offer. When prompted for the two-digit access code, type MP and you get one offer; type PM, and you get the offer purportedly available under Project Griffon.

An adviser on all this, we are to believe, is a Silicon Valley consulting firm, IDEO, with a wild-and-crazy website (detail, left) to match its California-groovy About:

Based in Palo Alto, Calif., IDEO is “an innovation and design firm that uses a human-centered, design-based approach to help organizations in the business, government, education, health care, and social sectors innovate and grow in three ways” — and it just keeps going on and on like that!

Is any of this true?
There are many things I don’t understand about this — like, whether any of it’s even true. That said, Detroit Free Press editor Paul Anger wasn’t very reassuring yesterday in this Metro Times column (second item) about Detroit’s future. Or maybe Anger was just choosing words extra carefully when he said: “I think it’s pretty safe to say we’re going to print a newspaper.”

Now, I can imagine lots of savings on newsprint, presstime and labor (depending on union contracts) for production, and delivery. But how would this affect ad sales, and the size of the ad sales staff? And what other savings would there be?

General Motors vs. Gannett
I’ve always thought San Francisco would be the first major American city to lose some or all of its traditional printed newspaper to the Internet; the Hearst-owned San Francisco Chronicle has been on the ropes for years.

But that was before General Motors‘ stock lost 84% of its value — in one year. Gannett shares, down 76%, aren’t far behind.

(Confidential to FG: How’m I doing so far?)

[Image: yesterday’s Freep, Newseum]