The Final Edition

“The newspaper industry is condemned to write piecemeal its own obituary without knowing when or how — or, truth be told, if — the end will come.”

Washington Post columnist Jim Hoagland, March 2008

It’s easy to understand why newspaper people might resent the Internet; it’s the media equivalent of a smarter, faster guy stealing your girlfriend.

But think about it: the Internet is immediate, interactive, linkable, searchable, and constrained by neither page space nor geography. What other medium can say the same?

None that I can think of.

Jim Hoagland’s assertion above isn’t necessarily accurate. The end may be coming, but the newspaper industry is not powerless,  “condemned” to die without knowledge or influence over the “when” and “how” of its demise. Newspaper people already know how to get information and tell stories. I strongly believe that – if they’re willing to change, they will come out on the other side with their jobs and their ideals intact.

Long Winter for the Media

Media Metrics: The True State of the Modern Media Marketplace

June 10, 2010 at 11:26 pm Leave a comment

WWFTCD?

The Federal Trade Commission held a workshop this past winter to discuss possible ways to “reinvent journalism,” and has just released the initial findings of the two-day hearing.

Many of the proposed ideas (including government subsidies, micropayments, and antitrust exemptions) have come up repeatedly in the past. But three of the proposals were new to me, and I’d like to outline them here.

Consumer electronics tax. The FTC proposed a 5 percent tax on the consumer electronics (e.g., computers) that are commonly used to view news content online. This tax would generate roughly $4 billion annually, to pay for increased public funding of journalistic enterprises.

Citizen news vouchers. These would give all U.S. taxpayers the option of allocating some of their taxes “to the non-profit media organization of their choice.” People would indicate on their tax returns whether or not they wish to help fund the media, which organization, and how much they want to contribute.

Content licensing. Also known as the “Internet tax,” this solution would do a great deal to bring U.S. copyright law into the 21st century. Under this model, Internet service providers (SBC, Comcast, Road Runner, Verizon, etc.) would be made to pay a content license fee ($5 to $7, writes the FTC) on each account they provide. For example, Comcast has 14.7 million accounts; a $6 annual tax on each account would bring in $88.2 million just from Comcast to be redistributed to newsgathering organizations. With about 96 million Internet accounts in the U.S., that’s more than $576 million in potential revenue.

I believe that content licensing is the best strategy. Though it would be more challenging to radically change U.S. copyright law than to instate new tax options, content licensing appeals to me because it gets to the root of the problem, which is exemplified in a pending case from April of this year. Dow Jones (News Corp.) is suing Briefing.com, alleging that the latter “systematically copies verbatim or nearly verbatim substantial portions of Dow Jones’ copyrighted articles . . . and distributes them in competition with Dow Jones . . . in some cases, within a minute or two after the article is published by Dow Jones.” Briefing.com’s use of Dow Jones’s journalistic labor certainly seems illegal considering Briefing.com actually charges a subscription fee for access to its web site.

“Hot news” is the kind of news that is most in need of increased copyright protection. Hot news was defined by the 2nd Circuit Court of Appeals in 1999 when the NBA sued Motorola for transmitting real-time game scores to its pager users. The court produced the following definition of hot news misappropriation:

  1. The plaintiff generates or collects information at some cost or expense.
  2. The value of the information is highly time-sensitive.
  3. The defendant’s use of the information constitutes free-riding on the plaintiff’s costly efforts to generate or collect it.
  4. The defendant’s use of the information is in direct competition with a product or service offered by the plaintiff.
  5. The ability of other parties to free-ride on the efforts of the plaintiff would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.

The NBA ultimately lost the suit, but only because the court concluded, rightly, that sporting events themselves are not copyrightable. But this comprehensive outline set a precedent that may have to be put to use in the Internet age if journalism is to remain economically viable.

A Google-Eyed View of Newspaper Economics

Dow Jones Sues Briefing.com

National Basketball Association v. Motorola

June 9, 2010 at 5:41 pm Leave a comment

Already History

First, check out this newscast from 1981:

Why aren’t newspapers as excited now as they were then? The online newspapers pioneered in San Francisco were unbelievably primitive, and EVEN THEN some people were willing to pay TEN DOLLARS and wait TWO HOURS for their computers to download it.

Now think about where we are today: still clinging to technology whose demise was foreshadowed at least 29 years ago. The print media (i.e., newspapers) had THREE DECADES to prepare for the inevitable shift to the web. So what’s taking so long?

In 2008, the number of people using the Internet as their primary news source surpassed newspapers’ audience for the first time. Now it’s 2010, and most newspapers are still fighting to stay in print until financial pressures necessitate their closure.

Most newspapers’ websites (with a number of exceptions) are hard to navigate and aesthetically inferior to their print versions. But this shouldn’t come as a surprise. Newspapers are effectively competing against their own online products, and one way to steer readers away from the Internet is by making the online reading experience less tolerable than the print one.

If newspapers cease to exist, their websites could become more user-friendly without threatening the parent organization’s profit. Furthermore, money that businesses presently put toward print advertising could be funneled into other outlets – ideally, advertising on the digital versions of newspapers.

But first, digital advertisements have to improve. They’re notoriously irritating and poorly designed, largely because the ad industry, like the news industry, has been excruciatingly slow to adapt. Writer Frederic Filloux puts it well:

It is hard to reform a fat-cat culture — from heavy margins, captive clients, cozy cronyism — to a more agile one in which technology and innovation drive the business. In this very respect, advertising and news media converge: Both have been late in hiring developers who understand the specifics of their business.

If the online news sites and their advertising counterparts were more intuitively designed, might the result be a population that’s more informed? I imagine so.

One veritable fact that news organizations refuse to acknowledge is that the Internet is superior to print in virtually every way: it’s faster, more permanent, searchable, interactive, and increasingly ubiquitous. Journalist Jeff Jarvis writes that a key advantage of the web is its ability to link “grains of information, thought, or opinion…connected to something larger” – that is, the overarching story. According to Jarvis (with whom I agree), the Internet treats the story “as a process, not a product.”

And therein lies the beauty. Our world has grown so complex in recent years that virtually no news story is ever “finished,” as static print publication would have us believe. It’s time to make the shift to the only medium advanced enough to keep up: the Internet.

Internet Overtakes Newspapers as News Outlet

Post-Newspaper Journalism?

The Building Block of Journalism is No Longer the Article

Why is Digital Advertising So Lousy?

May 31, 2010 at 4:31 pm Leave a comment

Does the World Hate Newspapers?

The elimination of newspapers could be a boon for planet Earth. Here’s why:

Logs passing through Vancouver, August 2006.

It takes the equivalent of twelve mature trees to produce one ton of newsprint. Even when newsprint is made from recycled paper, it’s taking away resources that could go toward other paper enterprises. We also need to take into account the amount of carbon emissions generated in the processes of turning wood or used paper into newsprint, powering presses to print the news, and delivering the finished product to homes and commercial outlets. The internal and external costs are significant, even compared with the energy used to power Internet servers and personal computers.

Alas, most people writing about the impact of newspapers are media stakeholders who have a vested interest in presenting data that reflects favorably on their medium, whether it be print or the web.

But I’m not going to do that. As much as it pains me, I have to admit that newspapers today are not nearly as environmentally destructive as they were during most of the 20th century. More than 75 percent of old newspapers in the U.S. are recycled into cardboard packaging, tissue, construction paper and, of course, newsprint.

And while getting news online does reduce stress on the paper cycle, it still consumes electricity, which places the demand on the energy grid. So unfortunately, neither method of news dispersal can be considered environmentally benign.

Newspapers and the Environment

What’s the Greener Way to Get Your News?

The Print Media Are Doomed

May 29, 2010 at 8:07 pm Leave a comment

To Be or Not To Be

Do you subscribe to your local newspaper? Yes? Then I encourage you to do the following:

1. Take today’s edition.

2. Cross out the commercial ads, Associated Press stories, syndicated columns, weather forecast, and TV listings.

The remaining content should be staff-written articles. Read them all. Then ask yourself: What did I learn that was NEW?

If your answer is “nothing” —> You’re wasting money. Cancel subscription.

If your answer is “a lot” —> You have a top-notch newspaper. Keep subscription.

If your answer is “a little —> Perform some thoughtful analysis: Do you have the Internet? Does the newspaper have a web site? Would you read news online if you had to?

If your answer to any of those questions is “no” —> Stay informed. Keep subscription.

If you answer “yes” to all three —> Put the paper out of its misery. Cancel subscription.

Newspapers are one of those rare commodities that increase in price as demand for them falls. Publishers can get away with  raising prices on newsstand copies and subscriptions because they know that there are people – most of whom I imagine are over the age of 60 – who will pay whatever price they set because they recognize the need for news, and paper is the medium they’re accustomed to. But these are the people perpetuating the stagnation of American journalism. And it is stagnant. If you don’t believe me, repeat steps 1 – 2.

With the Internet as fast, interactive, and ubiquitous as it is, demand for printed newspapers is incredibly elastic. The sooner publishers are forced to acknowledge this fact – as they will when they can no longer move their products – the sooner we can wrap up this unpleasant but necessary process known as creative destruction.



May 29, 2010 at 5:56 pm Leave a comment

Commodity Profile: The Oshkosh Northwestern

The Oshkosh Northwestern has enjoyed a 142-year reign as the only newspaper of Oshkosh, Wisconsin, a town with a population of 64,000.

HISTORY

Major C.G. Finney and B.F. Davis established the Northwestern in 1868. Two years later, they sold the paper to 23-year-old John Hicks. Oscar J. Hardy, a longtime employee, took over as publisher when Hicks died in 1917. Hardy ran the paper for 33 years before handing it down to his sons-in-law, Thomas Schwalm and Samuel Heaney. In 1998 they sold the Northwestern to Ogden Newspapers, who sold it to Thomson Newspapers three months later. Gannett, the largest newspaper chain in the U.S., bought out Thomson – including all 19 of its newspapers – just two years later.

OWNERSHIP

Gannett Company has owned the Oshkosh Northwestern since 2000.

On December 31, 1999, Gannett’s stock (NYSE: GCI) was worth $81.56 per share. At the end of 2000, it rang in at $62.18. Today, the stock is worth a mere $15.76.

Interestingly, Gannett also owns most of the newspapers in the cities surrounding Oshkosh. In 1980, Gannett purchased the Green Bay Press-Gazette and the Wausau Daily Herald. With the purchase of Thomson Newspapers in 2000, it added the Northwestern and six other area papers to its holdings. The others are listed below, with approximate weekday circulations noted in parentheses.

The Appleton Post-Crescent (48,000)

The Fond du Lac Reporter (14,000)

The Manitowoc Herald Times Reporter (44,000)

The Marshfield News Herald (13,500)

The Sheboygan Press (23,000)

The Stevens Point Journal (11,500)

This mass purchase meant that Gannett increased its Wisconsin audience from 77,000 to more than 250,000 all in the span of one year. Furthermore, these newspapers are the only ones in their respective towns. Because Gannett controls the local print media in the region, it has a significant influence over what ideas and values flow through these communities.

MANAGEMENT

Tom Cooper, former vice president of marketing at the Des Moines Register, has been the publisher of the Northwestern since 2006.

The executive editor and general manager of the Northwestern is Stew Rieckman. The video below captures Rieckman raising money for the United Way by letting his staff pay to bombard him with water balloons. (“If you’d sell more ads, I wouldn’t be in this fix!” he yells at 1:43.)

But it’s not all fun and games at the Northwestern. A friend of mine had an unfortunate yet telling experience with Rieckman in the summer of 2008. She had been an unpaid columnist for more than a year when he offered her a paid reporting internship ($8 an hour), with less than a month’s notice.

My friend was a frequent user of cannabis, but quit cold turkey to prepare for the obligatory drug screen. Her system still contained trace amounts of THC, and she was fired after three days in the office. Knowing the paper’s dire financial situation, she asked Rieckman if she could still do the work, but for no pay. His response: “Unfortunately, that isn’t possible. You violated company policy…My hands are tied.”

For better or worse, the editor was just toeing the company line, which Jose Berrios, Gannett’s vice president of human resources, has made very clear:

“We do not focus on the level of drugs in the test, or the type of drug. Any trace is a red flag and we will not hire.”

My friend’s story illustrates one of the many pitfalls of corporate ownership. But an even bigger problem is the merciless practice of cutting costs by laying off staff. This is especially prevalent in the large, publicly held newspaper chains because they have lots of shareholders, and they all demand that the company remain solvent, if not profitable.

In 1998, the Northwestern employed 117 full-time staff members. Today that number is down to 35. Here’s the breakdown:

  • 1 business reporter
  • 1 entertainment/multimedia reporter
  • 1 sports reporter
  • 1 education reporter
  • 1 public safety reporter
  • 2 community reporters
  • 8 editors
  • 1 content manager
  • 5 circulation managers
  • 14 advertising staff

DISTRIBUTION

The Oshkosh Northwestern still functions on an old-fashioned newspaper distribution model, whereby most readers get the paper delivered to their doorstep. Officially, the delivery personnel are employed by Gannett.

Subscriptions to the Northwestern are $15.87 per month for daily delivery, which comes to $190.44 per year. (The online version is free, but harder to navigate.) With a weekday circulation of about 22,000, the Northwestern brings in about $4.2 million in subscription revenue annually.

CONSUMPTION

Though on the surface it appears that newspapers are in the business of serving news to their communities, the capitalist structure necessitates that they instead serve consumers to their advertisers. The fact that only a small fraction of revenues come from subscriptions and newsstand sales only reinforce newspapers’ need to cater to advertisers and commodify their audiences.

The Northwestern has undergone significant changes since 2000 due to the influence of both Gannett and the changing economy. Here are some of readers’ most common complaints:

  • Contains too many ads and not enough news (as my father says, “it takes about five minutes to read the whole thing”)
  • Contains little original content; too many Associated Press reports
  • Shift to smaller paper size has resulted in less value for the money
  • High-quality syndicated columns have been replaced with sub-par local commentaries
  • Increased “fluff” in the form of video game reviews and gratuitous blogging about the weather

Many people have canceled their subscriptions in response to these changes. As more readers do so, the pressure to increase ad sales will weigh heavier. Yet as readership declines, the paper will become less attractive to advertisers. It’s a downward spiral – one in which not only the Northwestern, but the entire newspaper industry, is currently entrenched.

TheNorthwestern.com

ONW Masthead

Oshkosh Northwestern Newspaper Sold

A Welcome to 19 Thomson Newspapers, Now Part of Gannett

The Weather Guy

History of the Northwestern

Google Finance: Gannett Company

Gannett Names New Publisher and President in Oshkosh

Employers Find Benefit in Testing for Drugs

Newspapers Brave the Corporate Storm

May 16, 2010 at 4:52 pm Leave a comment

Hearst Corporation: Leading the Way

In 1969 Congress passed the Newspaper Preservation Act, which would exempt newspapers from certain antitrust laws in an effort to keep failing newspapers in business. With the passage of the Act, newspapers in the same city – former competitors – could become horizontally integrated by forming joint operating agreements, or JOAs.

Under a JOA, the business operations (advertising, production, marketing, etc.) of both papers are financed by the more profitable “parent” publication. The two share revenues, with a greater share going to the parent. Though they’re financially intertwined, each paper retains its own staff and editorial independence.

Then-president Richard Nixon was reluctant to sign the Act into law because it violated his laissez-faire capitalist principles. Richard Berlin, chief executive of Hearst Corporation, wrote a letter to Nixon with the following message:

“Those of us who strongly supported the present administration in the last election are the ones most seriously concerned and endangered by failure to adopt the Newspaper Preservation Act. The fact remains that there was almost unanimous support of the Administration by the newspapers who are proponents of the Newspaper Preservation Act. It therefore seems to me that those newspapers should, at the very least, receive a most friendly consideration.”

Nixon signed the bill soon after, and in 1972 every Hearst paper endorsed him for re-election. He won with 60 percent of the popular vote.

One of the strongest opponents of the Newspaper Preservation Act was UC-Berkeley law professor Stephen Barnett. He predicted that the Act would lead to an industry dominated by powerful newspaper chains that would kill off the weaker paper once the joint operating agreement expired.

Until recently, Hearst Corporation was involved in a JOA with the Seattle Times Company under which the Seattle Times financed the production of Hearst’s Seattle Post-Intelligencer for 26 years. The Post-Intelligencer ceased print publication in 2009 after four years of arbitration to terminate the JOA at the request of the Seattle Times Company. All this despite an April 2007 announcement that Hearst’s Post-Intelligencer would be “allowed” to continue publishing until at least 2016.

Though some JOAs are still functioning normally, Barnett’s prediction has turned out to hold a great deal of truth. The Newspaper Preservation Act effectively transformed two-newspaper towns into one-newspaper towns, including:

  • Miami in 1988
  • Pittsburgh in 1992
  • Nashville in 1998
  • Denver in 2009

It’s important to note that these cities would have become one-newspaper towns with or without the passage of the Act. The difference is that, without the Act, the failing newspapers would have been allowed to die years (and possibly decades) before they did. The Newspaper Preservation Act, with the stated goal of protecting journalism from market forces, turned large publishers into the dominant newspaper chains we see today.

12 Cities Still Have JOAs

Stephen Barnett Obituary

Seattle JOA Timeline

“Seattle Will Remain a 2-Newspaper Town”

Publishers’ Big Lies

HISTORY

Hearst Corporation could never have come to fruition without the mining fortune of George Hearst. Hearst purchased the San Francisco Examiner in 1880 in an effort to “further his political ambitions.” When he was elected to the U.S. Senate in 1887, he handed the paper over to his only son, William Randolph Hearst.

Starting with his takeover in 1887 of the Examiner at age 23, William became the genius behind Hearst Corporation, which for much of the 20th century was the largest newspaper chain in the United States.

Hearst started his first magazine (Motor) in 1903 and acquired Cosmopolitan in 1905 and Good Housekeeping in 1911. He bought his first radio station in 1928 and his first television station (WBAL-TV of Baltimore) in 1948. During the 1930s, Hearst and his newspapers led way for a powerful and effective anti-marijuana propaganda campaign designed to generate fear of marijuana and its users. His aim was to eliminate the threat the hemp plant posed to the timber industry, which he’d invested in heavily in order to expand his newspaper chain. (Hearst, an unabashed racist, at the same time sought to bring down blacks and Mexicans by associating them with the “deadly drug.”)

Hearst’s media ventures were so profitable that he was able to build the extravagant, 90,000-square-foot Hearst Castle on the family’s coastal estate in central California.

William Randolph Hearst was succeeded by Richard E. Berlin as company president. Berlin was the man who wrote the letter to Nixon persuading him to sign the Newspaper Preservation Act of 1970.

The company enjoyed a steady stream of various media acquisitions throughout the 20th century. In 1965 it transformed Cosmopolitan from a fiction publication to what would become the most-read women’s magazine in the world. In 1984 Hearst was a founding partner in the A&E and Lifetime cable networks, and went on to acquire a 20% stake in ESPN in 1991.

In 2000 Hearst ended one of its joint operating agreements by buying the stronger San Francisco Chronicle from the Chronicle Publishing Company and selling its original newspaper, the San Francisco Examiner, to a local publishing family (who have since turned the Examiner into a free tabloid). This action was the final step in a century of consolidation, as observed by the Virtual Museum of the City of San Francisco:

Between 1900 and 1999 almost every major newspaper in this city has been bought by Hearst and absorbed into the San Francisco Examiner. The last major merger, in the 1960s, saw the folding of the combined San Francisco News and the Call-Bulletin, known as the News Call-Bulletin, into the San Francisco Examiner. Now, the Examiner ends more than one century of fierce newspaper competition with its parent corporation buying the Chronicle.

Mining Hall of Fame: George Hearst

The San Francisco Chronicle

A Brief History of Hearst Corporation

The San Francisco Examiner, 1887-2000

Virtual Museum of San Francisco

Why is Marijuana Illegal?

Media Awareness Project

HOLDINGS

As of 2010, Hearst Corporation is the proud owner of…

53 newspapers (15 dailies and 38 weeklies).

14 American magazine titles (and some 200 international editions), including:

  • Cosmopolitan (purchased in 1905 from John Brisben Walker)
  • Good Housekeeping (purchased in 1911 from Clark W. Bryan)
  • Popular Mechanics (purchased in 1958 from H.H. Windsor)
  • Redbook (purchased in 1982 from now defunct Charter Co.)
  • Esquire (purchased in 1986 from now defunct 13-30 Corp.)
  • Marie Claire (started in 1994, based on French magazine of the same name)
  • O, The Oprah Magazine (launched in 2000)
  • Seventeen (purchased in 2003 from Primedia)

29 regular TV stations (reaching 18% of U.S. households)

a 20% stake in ESPN (Disney-ABC owns the other 80%)

a 37.5% stake in A&E Television Networks (including A&E, Lifetime, and History channels)

  • Disney-ABC owns 37.5%
  • NBC Universal, recently acquired by Comcast, owns the other 25%

Two radio stations (WBAL-AM and WIYY-FM, both in Baltimore)

Hearst Ranch, where free-range, grass-fed animals are raised and later sold online as steaks, beef jerky, pork, and other meat products.

COMPETITORS

Hearst Corp. reigns as one of the largest newspaper publisher in the U.S., with $4.8 billion in revenues in 2008. Below is a summary of Hearst’s major competitors, along with their revenues for that same year.

Gannett Company* ($6.8 billion) has the largest total circulation in the U.S., with 90 daily newspapers and nearly 1,000 non-dailies. Gannett also owns 23 televisions stations reaching 18% of American households.

The Tribune Company ($5 billion) owns 26 U.S. newspapers (daily and non-daily) and 26 television stations. Lucrative holdings include the WGN television and radio stations and the Chicago Cubs baseball team.

The New York Times Company* ($2.9 billion) publishes the New York Times, the International Herald Tribune, and the Boston Globe, plus 15 other regional newspapers and the general online information source About.com.

The McClatchy Company* ($1.9 billion) owns 30 daily U.S. newspapers. With its 2006 purchase of Knight Ridder, McClatchy obtained 50% of the joint news-sharing venture McClatchy-Tribune Information Services. The Tribune Company owns the other half.

MediaNews Group ($1.3 billion) owns 54 daily U.S. newspapers and more than 200 niche magazines. Like Hearst, it is privately owned. Hearst actually invested $317 million in MediaNews to fund its purchase of the San Francisco Chronicle in 2000, but had to give up its stake when MediaNews filed for Chapter 11 bankruptcy earlier this year.

Chapter 11 bankruptcy doesn’t terminate the company, but gives it a chance to restructure its debts and assets so that it can (ideally) return to a state of financial solvency. The video below provides a more in-depth explanation of this complicated process.

*Although each of these publishers is in serious debt, The McClatchy, New York Times, and Gannett companies are in particularly dire financial straits right now. Between Dec. 31, 2007 and Dec. 31, 2008, the price of their stocks fell dramatically. The New York Times’s went from $17.50 a share to $7. Gannett’s fell from $39 to $8. Most shockingly, McClatchy’s stock lost 94% of its value, falling from $12.50 to 80 cents in just one year.

Hearst, MediaNews, and the Tribune Company (which has also filed for Chapter 11 bankruptcy) are relatively stable in large part because they are not publicly traded. More on that later.

Print Ownership Chart

Center for Public Integrity: Gannett Co.

Center for Public Integrity: Tribune Co.

The State of the News Media

MediaNews’ Bankruptcy Plan Approved

Chapter 11: Bankruptcy Restructuring

PEOPLE

Hearst’s board of directors consists of 20 individuals. Seven are Hearst’s descendants (Austin, John, Stephen, William, Virginia, George Jr. and George III) and 13 are non-relatives. Directors Frank A. Bennack Jr., Cathie Black, and Ronald J. Doerfler are of particular interest as interlocking directorates – people who serve on the boards of other corporations in addition to Hearst’s.

Frank A. Bennack Jr. was the CEO of Hearst from 1979 until 2002. From 2002 to 2006 he was on the board of Wyeth (formerly known as American Home Products), a pharmaceutical company best known for producing Robitussin and Advil. Drug giant Pfizer purchased Wyeth in October 2009. Bennack had also served on the board of JPMorgan Chase for 23 years, ending in 2004. He has been on the board of Polo Ralph Lauren since 1998.

Cathie Black is on the board of IBM, which does more than $1 billion in business with the federal government through contracts with the Departments of State, Defense, and Energy. She is also on the board of Coca-Cola, which has a contract with the Department of Defense as well, providing beverages to troops overseas. Black is consistently ranked in Fortune‘s list of the 50 Most Powerful Women in Business.


Ronald J. Doerfler is Hearst’s Chief Financial Officer. He’s also a director of the asset management and financial advisory firm Lazard, which advises Hearst rival the Tribune Company and the United Auto Workers, one of the most politically active labor unions in the U.S. Through Lazard, Doerfler is tied to Philip A. Laskawy and Steven J. Heyer (see below).

Philip A. Laskawy is on the boards of such big-name corporations as Fannie Mae (the Federal National Mortgage Association), General Motors (American automaker), Discover (financial services company), and Progressive (auto insurance provider).

Steven J. Heyer, a former president of both Coca-Cola and Turner Broadcasting, now sits on the boards of the NCAA, the Special Olympics, and Phorm, Inc.

Web of Board Members Ties Together Corporate America

Interlocking Directorship Definition

Pfizer’s $68 Billion Wyeth Deal

50 Most Powerful Women

LABOR

Hearst employs approximately 20,000 people worldwide. Some belong to labor unions (usually called newspaper guilds), but many do not. The Albany Times-Union is one Hearst paper with a large guild, comprising about 300 workers at present. Because of the union, Hearst cannot cut workers’ pay or raise their health insurance deductibles. The union has also been able to preserve benefits such as severance pay and voluntary buyouts, so if staff cuts on the horizon, they at least come with a silver lining.

Employees at Hearst Tower in New York have it better than those employed by individual newspapers. Check out this tip that an anonymous Hearst employee sent to the Manhattan media gossip blog Gawker:

“We just received the invite to the annual Hearst holiday party. It’s clear there is some belt tightening going on here. For as long as anyone can remember, the party has been at Tavern on the Green and it has been a drunken affair, highlighted by copious amounts of good quality food, especially in the shrimp category…It’s a Hearst trademark. Famously, the company once hired a consultant to cut costs and they said that the first thing Hearst had to do was cancel the holiday party. Hearst said no. So they said, ok, get rid of the shrimp. Now it appears they have.”

Most people in the newspaper industry would probably balk at this tipster’s lament. While corporate managers are cutting shrimp, most newspaper managers are cutting staff. As always, the most secure place to be at times of crisis is at the top.

The Albany Newspaper Guild

Benefits Could Be Cut Without a Union

Hearst Makes Already-Tight Belts Tighter

Hearst Tower

STRATEGIES

Unlike most major corporations, Hearst is privately held. This comes with two advantages:

  1. It doesn’t have to worry about pleasing shareholders.
  2. It doesn’t have to file financial statements with the Securities and Exchange Commission.

Like most major corporations, Hearst uses political donations and lobbyists to gain favor from elected leaders who can create policies that will make it easier for them to do business and turn profits.

Graph from The Center for Public Integrity

Between 1997 and 2006, Hearst Corporation donated more than $500,000 to various politicians, 65% of whom were Democrats. In 2004 the corporation donated $7,250 to George W. Bush and $12,950 to John Kerry. This indicates that, though Hearst favored Kerry slightly, it sought political favors from the future president regardless of his identity.

Hearst Corporation has been using vertical integration for most of its history. In the early 20th century William Randolph Hearst invested in hundreds of acres of timber forests in California, and even owned the paper mills that processed the timber into newsprint.

Now, in 2010, Hearst is in the final stages of acquiring the digital advertising and search optimization company iCrossing. This asset will likely give Hearst an edge in driving traffic to its numerous websites.

Hearst has also become horizontally integrated as it has acquired assets in different media platforms. Hearst Corporation is the parent company of Hearst Newspapers, Hearst Magazines, Hearst Television Inc., Hearst Entertainment and Syndication, Hearst Books, and Hearst Interactive Media. In addition, Hearst Magazines owns a subsidiary, National Magazine Company, which oversees the publishing of 20 titles in the United Kingdom.

Hearst Corporation: Political Influence

The Center for Public Integrity

Hearst Nears Deal to Buy iCrossing

The Most Useful Plant Ever Banned by Law

April 28, 2010 at 11:55 am Leave a comment

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