People in the Bay Area like to flatter themselves by bitching about their newspapers. Yes, that's a national pastime, but it takes on a special hue here where "we don't have the newspaper we deserve." We have two of the finest research universities in the country, a cluster of brilliant technology companies, and the most diverse collection of Ph.Ds and H-1Bs in the world. We created the personal computer, the Internet, and every iPod iteration you can think of. We deserve a journal of smart, hip writers, of reporters who take aim at the most powerful institutions, of editors who aren't afraid to publish thousands of words. What do we get? High-school-sports coverage. Six-hundred-word guest editorials full of recycled platitudes. Columnists who write about their pets.
In the last few years, the San Francisco Chronicle has become just the sort of paper we all say we want. Joan Ryan's feature series on wounded veterans exceeded twenty thousand words a novel by any paper's standards. Reporter Kevin Fagan spent eighteen months living among the homeless south of Market Street, and his stories were complex and melancholy. The Chron broke the UC compensation scandal and the BALCO steroids story that prompted congressional hearings and changed the face of professional baseball. Yet it's Dean Singleton's unimaginative, provincial newspapers that surround the Chronicle, not the other way around.
In April, Singleton's MediaNews Group acquired the Contra Costa Times, the San Jose Mercury News, and 35 other papers or weekly supplements, including established weeklies such as the Berkeley Voice and the Piedmonter and upstart microdailies like the East Bay Daily News. Singleton, who also owns the Oakland Tribune, Hayward Daily Review, Tri-Valley Herald, and the three other publications of ANG Newspapers, now controls almost every Bay Area daily outside of San Francisco. From Marin County to San Jose, for the first time in history, residents of every bedroom community in the Bay Area now depend on one man's underpaid reporters to explain their world to them.
On the day the sale was announced, Singleton personally visited the newsrooms of the Merc and the Times, where he promised he would leave their operations alone. Reporters at the Times even gave him an ovation when he walked into the room. But everyone knows that's just one of the rituals every company observes before the long knives come out. MediaNews leadership spelled it all out in its latest annual report: "We seek to increase operating cash flows at acquired newspapers by reducing labor costs." Singleton is unlikely to remake the Contra Costa Times, which makes money by the bushel. And he won't start a labor war by slashing the salaries of existing employees. But starting salaries at ANG are just over $29,000. The Denver Post aside, Singleton is not renowned for investing in talent, and the talent is already jumping ship. Merc business editor Todd Woody recently decamped for Business 2.0, longtime editor and reporter Michelle Guido is moving to Orlando, and Sacramento correspondents Aaron Davis and Laura Kurtzman have left for the Associated Press. It'll take time and attrition, but eventually, his new papers will start to feel like the Oakland Tribune.
But then, that's what you asked for, isn't it? The Chronicle's decision to veer off in unpredictable directions has done little to stanch its epic financial hemorrhaging. In fact, it's hard to imagine how the Chron could be doing worse. Last year, its average weekday total paid circulation dropped 16 percent. In 2004, the most recent year for which financial numbers are available, the paper lost a staggering $62.5 million. The dominant daily newspaper in what may be the richest city in America is going broke.
Of course, the news is grim throughout the newspaper industry. Circulation has been declining for years, with no end in sight. Even Singleton's local papers have bled readers. In the East Bay, the Oakland Tribune leads the loser's pack; according to figures from the Audit Bureau of Circulations, the Trib's average weekday total paid circulation dropped 14 percent last year, while the circulation of ANG's suburban papers fell at rates between 8 and 10 percent. Even the region's undisputed cash cow, the grand prize that is the Contra Costa Times, dropped 5 percent of its circulation.
Bay Area newspapers have had the displeasure of being at the forefront of advertising and readership trends that have cut deep furrows into the industry's revenue. Craigslist and free online classifieds are destroying print classified advertising, which accounts for almost a third of revenue, and it happened here first. As Google and Yahoo write better algorithms that match Web searches with advertising, more and more local display advertisers will migrate to the Web. And reading patterns, especially among the young, threaten to render much of daily newspaper content irrelevant.
Media outlets are still trying to figure out how to make their Web sites pay off, so even when readers turn to them, they still don't make money for their papers. But readers don't always turn to them. They read blogs and visit search engines, and when it comes to commentary, sports, culture, or national and international news, the stories they link to aren't usually local. There is no longer such a thing as a captive news audience; why would people read national stories from midsize papers when they can read Salon, Slate, The New York Times, The Washington Post, and the like? Papers like the Chronicle are saddled with expensive armies of talent maintaining a Washington bureau costs a fortune, for example to offer the kind of writing that readers are already turning elsewhere for.
The key to success in this brave new world is to give readers what they can't get elsewhere: local news. No one else will cover high school sports or the waterfront commission. No blog or national magazine will tell you how the Pleasanton City Council voted last night. Dean Singleton and his dull, by-the-numbers papers will do just that.
Yet for some reason, the San Francisco Chronicle has moved in exactly the opposite direction. From 1997 to 2001, the Chronicle penetrated the suburbs with "zoned coverage," publishing distinct metro sections that specialized in local coverage of the inner East Bay, the Contra Costa cities, and other regions. But the dot-com crash put an end to that, and the paper's management subsumed the local sections under a single metro page. Their new target readership was a hip, transplanted, mobile middle class that didn't identify with a particular city. These Greater Bay Area residents, they reasoned, would read a story because it was inherently interesting, not because it dealt with their city council or school district. They hired wiseguy columnists like Mark Morford, sent Sean Penn to Iraq, and ran a 39-part series on wine production. For too long the Merc followed its own vision of this muse: tech coverage, costly international reporting, and trendy lifestyle reporting to the exclusion of beat coverage from Fremont and Milpitas. After the dot-com downturn showed the limitations of journalism from thirty thousand feet, the Merc's parent company got the religion of local news but by then it was too late for everyone involved.
There's been a lot of hand-wringing about the future of newspapers, as changing reading patterns and advertising dynamics bite into the 20 percent profit margin most companies have grown used to. Dean Singleton has figured out how to save them: Boring pays the bills. His formula of cost-cutting and a scrupulous devotion to local coverage has paid off in spades. By geographically clustering contiguous small newspapers and centralizing accounting, production, and some newsgathering, Singleton keeps his costs down and gives his readers the one thing they can't get on a blog for free. It's nowhere near as interesting as the Chron or the Merc, but it's simply a better business model. MediaNews posted a modest loss of $3.6 million for the first quarter of 2006, but has been profitable in previous years. Since 2001, Singleton has whittled down his long-term debt from almost $1 billion to $875 million. Because his company is privately owned, he can absorb temporary losses without panicked shareholders demanding he liquidate his assets which is exactly what happened to Knight Ridder.
That's why it's Singleton who now owns almost every newspaper in the Bay Area. And now that he has them, he's ready to remake the face of news. There are plenty of staff redundancies among his new portfolio, but MediaNews also now has several papers serving the same markets. The Tri-Valley Herald and Valley Times both serve southeast Alameda County, and Singleton has suggested he will move the Herald out to Tracy. Luther Jackson, the executive officer for the San Jose Newspaper Guild, claims to have heard rumors that Singleton plans to kill the Fremont Argus, although he could just as easily pull the Mercury News out of Fremont. According to staffers at ANG and one of the papers about to be gobbled up, MediaNews plans to kill small papers such as the Berkeley Voice, Alameda Journal, and Montclarion, although this rumor makes no economic sense. And why would Singleton continue to publish the East Bay Daily News when the paper's only reason for being is to undercut the ad rates of the Oakland Tribune?
For years, the newspaper industry has been convulsed in a long process that some have referred to as the movement toward a "one-newspaper town." The reality is slightly more complex: One paper typically dominates the metropolitan core as one or more suburban competitors, typically owned by a single chain, nip at its heels. This process has taken longer in the Bay Area because the bay separates the 'burbs from the urban core and the foothills separate one bedroom community from another. But finally, geography notwithstanding, Northern California looks like the rest of the country.
Under this arrangement, Singleton now holds most of the cards. His company pays dirt wages to rookies who turn meetings and press releases into local stories. His suburban readers own homes, so they care about crime. They have kids, so they care about the schools. They'll read stories that address these issues, no matter how incoherent and sloppy they may be. Meanwhile, the Chronicle is stuck chasing a hip, web-savvy demographic that doesn't care about local issues, and it's paying an experienced, talented staff more than twice what its competitor does to lure them in. Thanks to Dean Singleton, most of these newspapers will live to see another day. They just may not describe the sunrise very lyrically.
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