Hot Chain Nixes Wingo, Buscapades-Nabs Pulitzers, Big Bucks
Cooper, Matthew
HOT CHAIN NIXES WINGO, BUSCAPADES NABS PULITZERS, BIG BUCKS Knight-Ridder shows that newspaper chains can be profitable—and good by Matthew Cooper When Walter Annenberg was publisher...
...On June 1, both covered President Reagan's first big speech on AIDS...
...In South Dakota, Knight-Ridder's Aberdeen American News has everything a small rural paper should: a good mix of local, state and foreign stories and the latest commodity prices presented clearly and attractively on the front page...
...Our staff efficiency ratio was 2.0 stories and 0.42 photos per staffer day," he wrote in Quill...
...For a time, the city's pro basketball team, the 76ers, made his enemies list —and barely made the paper, given just one paragraph when they lost and two when they won...
...One asks employees to draw three pictures: one of a man, one of a woman, and finally, one of themselves...
...Another asked if you agreed or disagreed: 'Big business is bad for America...
...Because reporters are allowed to thoroughly study the nuances of seemingly boring institutions, the Inquirer's reports on securities fraud, municipal court corruption, and IRS ineptitude are not only comprehensive but engaging...
...It's telling that Knight-Ridder executives boast about news quality as well as profits in their meetings with stock market analysts...
...Paul Pioneer Dispatch and the San Jose Mercury News over the next 84 years...
...The same day, the Chronicle is flat...
...But for millions of Americans outside the reach of urban dailies, the lousy chain paper is all they can get, not just for the minutes of the Rotary Club meeting but for national and international news, too...
...The Ridders, on the other hand, published lower-grade papers...
...Couldn't they have used a wire story about the testimony and then dispatched a bureau reporter to a story not swamped by journalists...
...Sometimes people would be on the list and you would have no idea why," recalls Frank Dougherty, a veteran of the Philadelphia Daily News, Annenberg's tabloid...
...Mencken said chain papers were designed to "please everyone, and especially everyone with something to sell ." He might have been describing the $1 billion empire of Donald W. Reynolds, owner, founder, and CEO of Donrey Media with 57 small dailies not exactly known for their pit-bull reporting...
...Start-and-stop layoffs and hiring freezes are common at even the chain's most profitable papers...
...the Enquirer's biggest story is about a couple that makes their own shoes...
...Instead of sending the whole staff plodding around with the pack, Knight-Ridder allows its reporters to do longer, investigative pieces...
...These improvements make the Mercury News a much better read than the San Francisco Chronicle 75 miles away...
...But any similarity ends there...
...competing Philadelphia Bulletin holding a grip on the city's readers and advertisers, rivals chortled that Knight had been suckered...
...Wonder how Bob Woodward might do on that one...
...They have color, comics, and plenty of life...
...I remember this one question where you had to agree or disagree: 'I feel sorry for a bird with a broken wing ! I mean, it was stupid," said one reporter...
...After all the cash is squeezed out, the papers are left with skeleton staffs and heaps of copy off the Associated Press wire...
...There's a temptation to see the success of Gannett and other chains as proof that those dumb hicks can't handle the serious stuff...
...Even USA Today has things to recommend it, like a sports section that more than justifies the paper's high 50 cent price...
...The Inquirer's top investigative reporter was convicted for extortion after he had accepted kickbacks for suppressing stories...
...But virtually every Times-Mirror paper sent a reporter to sit in the committee room and take copious notes...
...That's a game-playing exercise, that builds leadership," explained Ivan Jones, a staff Ph.D...
...They had worked their way east to west, beginning with a German language daily in New York in 1892 and then purchasing the Journal of Commerce, the St...
...Fake Canadian-owned Thomson Newspapers, king of the 10,000-circulation daily...
...The Partridge Family Of course, Knight-Ridder isn't the only chain that puts out good papers...
...How exactly are these qualities measured...
...We talked through lunch about a lot of things, none of them especially pertinent to the newspaper," the reporter recalled...
...We wanted to become dependable and solid and readable and engaging," says Roberts...
...It's been money well spent...
...Just because Knight-Ridder uses wire services for important stories doesn't mean they miss out...
...Similar Thomson papers averaged 7.7 and 1.2 photos...
...In fact, several reporters confessed that they didn't have to take the exams, that the editors who recruited them told them not to worry about it...
...But unlike other chains it doesn't go on prestige trips and send a reporter to 'every event...
...Two reporters covered the Iran-contra hearings for the Knight-Ridder chain...
...Passing these tests, says one reporter, is like "a red badge of courage...
...But alongside "Newspaper Production Techniques" and "Advertising Sales Management" there's "Effective Human Relations" and "Interpersonal and Organizational Skills" Highlights of the latter include the "Verbal and Non-Verbal Communications Process" and "Face-to-Face Communications Techniques" The training institute's pamphlet features a cover photo of managers stacking boxes...
...Freedom Newspapers, a booming libertarianleaning outfit out of Irvine, California, with 29 papers and circulation approaching one million, peddles brochures with its editorial philosophy: "[In] free enterprise the gain or profit of one is the gain of all ." And, of course, Gannett has infused the up-tempo tone of owner Al Neuharth throughout' all of its 93 dailies, not just USA Today...
...The San Jose Mercury News, skimpy before the merger, is now one of the nation's best...
...You'd be surprised how much money you can make off Zanesvillians...
...Observer from a sleepy sheet into one of the best newspapers of its size...
...You have to go through and re-delegate everything quickly...
...He's gone now...
...Not shirking competition, Times-Mirror's New York Newsday has hired 225 editorial employees in an effort to give the Big Apple a flashy but serious paper like the old Herald Thbune...
...Hell, you're just getting your_hands dirty after three months," said one Inquirer reporter...
...But MBOs, like other management "systems" inevitably tend to reduce subjective goals (like better local coverage) to easily identifiable, quantitative goals (more local coverage...
...Take the April 9th issues...
...But most hit the mark...
...Annenberg, according to a biographer, regularly called Milton Shapp a "sleazy son of a bitch" and made it clear to his reporters that if they had to write stories on Shapp, they had better not be flattering...
...The $1.9 billion company has whipped several mediocre papers into shape...
...With more papers than any other chain, it is the daily bread in 104 towns, from Altoona, Pennsylvania to Zanesville, Ohio...
...Sure, there are some interminable series, dubbed "megaturds" by reporters, like the four-part saga of the African rhino...
...It has plenty of what most people read newspapers for—crosswords, color, leisure sections, a Sunday magazine—even more comics than the Chronicle...
...Knight-Ridder's real ailment is the spread of Bschool management techniques that affect so many corporations...
...Those halcyon days ended in 1969 when Annenberg sold both papers to Knight Newspapers, now Knight-Ridder, for $55 million...
...He found Thomson HQ demanding more and more copy from his overworked staff...
...The article is buried at the bottom of the page next to a late-breaking two-paragraph Reuters item about mischievous Soviet youths tipping gravestones...
...The Chronicle's important investigative story uncovers Haight-Ashbury and "The 'Twentieth Anniversary of the Summer of Love...
...The other shows how the West, booming a few years ago, is now getting pummeled by the trade deficit...
...Reporters I spoke with at Knight-Ridder papers consistently spoke well of their papers, but, more often than not, complained about oppressive bureaucracy For instance, there were plenty of gripes about the company's Management by Objective system, or MBOs...
...They spent more money...
...Harless's views of testing were shaped during World War II when he evaluated soldiers to put together the most cooperative bomber crews...
...But those companies operate just a few papers apiece in mostly urban markets...
...now the San Francisco Examiner is beefing up its reporting...
...In June, they published strong pieces on literacy in South Dakota and corruption in a local foster grandparents program...
...They even cover the 76ers...
...Hearst used to be Californian for schlock...
...Of course, Gannett still has a perverse pride in its banality...
...Historically, the owner placed his ego on public display...
...Knight heirs controlled the new board...
...The issue is dominated by three stories on the local housing shortage...
...We can't bring back the age of the family paper...
...Four-color schlock What happens when a newspaper chain comes to town...
...The history of American newspapers is replete with families that not only put out good papers, but did good work in their communities...
...In contrast, the Chronicle is a gray, Sominex-laced paper that's difficult to follow...
...At the end of the meal I asked him whether this trip, this lunch was to fill a quota for his MBO...
...There are some people interested in nothing but the bottom line, but we say to them: 'Look, we've had eleven straight years of increased earnings per year' I think that answers them," said Lawrence Jinks, VicePresident for news and operations...
...In contrast, when Knight-Ridder formed, it began pouring money into the Mercury News— doubling the number of reporters, adding foreign bureaus and 20 sections...
...From the South China Sea, there's the first of a three-part series on how Thai pirates slaughter Vietnamese boat refugees while the international community looks the other way...
...Scripps published manifestos for their own political agendas, with little concern for careful, analytic reporting...
...It has 15 foreign bureaus and has assigned two major bureaus to each of its four largest papers...
...On staff, the paper had court reporters, police reporters, and a criminal...
...The rival Miami Tribune chose to cut news and eventually watched its readership slip away...
...Philadelphia accounted for almost half of Knight-Ridder's newspaper division's growth last year...
...With 44 Pulitzers, five this year, Knight-Ridder and its 34 dailies boast more than any newspaper chain, save The New York Times...
...In Charleston, West Virginia, Publisher Ned Chilton fought corruption in state government as only a native son could...
...Barry Bingham of the Louisville Journal and Courier helped his city slip the bonds of Jim Crow...
...Clearly lousy newspapers—like awful restaurants—can avoid being slapped by the invisible hand of the marketplace...
...The business section is all green, but its hue is more pea-soup than legal tender...
...Knight-Ridder also brings good journalism to towns and smaller cities...
...But at least Knight-Ridder shows that the dominance of chains need not mean a nation full of McPapers and weekly shopping guides...
...But what I remember most is looking at questions that were scratched out...
...And the Knight-Ridder expansion has not just been geared toward raw circulation numbers...
...Before Knight bought the paper in 1954, the ad manager regularly assigned stories—dispatching reporters to cover store openings and sales...
...But Knight-Ridder turns a healthy profit— suggesting that other newspaper chains could emulate its model were they willing...
...Under Knight-Ridder, it's booming...
...While Knight-Ridder puts its reporters on big assignments, it also knows when not to...
...He said yes...
...The Chronicle's must-read editorial page features intellectual heavy-weights like Dear Abby...
...Over the years, Ridder did little to beef up the Mercury News...
...By July 1980, the Inquirer had closed a 173,000 circulation gap to overtake the Bulletin, forcing it to fold two years later...
...A 1979 report had revealed a craving for more lifestyle sections and jazzier graphics—and influenced the look of papers across the country...
...While yellow journalism has often been replaced by full color, there are still a few cities where the lurid chain lives...
...Jeffrey Marx and Michael York of the Lexington Herald Leader conducted more than 200 interviews and spent months to uncover corruption in University of Kentucky athletics...
...Bruce VanDusen edited the Kokomo (Indiana) 71-ibune until he resigned in frustration 13 months after it was purchased by Thomson...
...Draw this picture While Knight-Ridder is editorially and financially healthy, it would be wrong to leave the impression that it is committed to the news at any cost...
...The part I don't like about them is that they can lead to someone becoming a bureaucratic manager...
...That kind of attention has earned Knight-Ridder a place in The 100 Best Companies to Work for in America...
...The Ridders could have been selling shoes...
...towns have two competative papers...
...The formula has worked well since the thirties, when John S. Knight began the chain by taking over his father's sole paper, the Akron Beacon Journal, and then moving south to buy the Miami Herald and smaller papers in Georgia...
...Such cut-and-paste journalism is alien to those weaned on The New York Times, The Washington Post or the Los Angeles Times...
...During World War II, when newsprint rations forced publishers to cut ads or cut news, Knight kept the Miami Herald filled with the latest bulletins from overseas and cut ads...
...If they're careful to restrain their worst corporate impulses, as KnightRidder usually is, chains can be both profitable and good...
...The same kind of corpocracy mars the company's hiring tests...
...Jojo the Weather Chimp was a staple of the Charlotte Observer before Knight-Ridder took over...
...Most notably, there's Rupert Murdoch's News Corporation, stretching from Boston to San Antonio...
...By all accounts he is very sensitive to employee frustrations...
...In Philadelphia, the extra suburban editions have helped maintain circulation in the affluent Main Line suburbs, providing even further inducement to advertisers...
...They began in the late sixties under the direction of Byron Harless, now retired from the KnightRidder board...
...Then there was the Shapp Gap...
...But Knight-Ridder papers aren't good just because of their reporting...
...But, significantly, the merger that brought the two chains together in 1974, was more like an acquisition...
...Knight reformed and strengthened his new properties...
...It serves Cherry Hill, and look at the statistics...
...Still it is hard to see Knight-Ridder becoming a slapdash chain like Newhouse or Thomson...
...One Knight-Ridder reporter on the East Coast recalled being taken out to lunch by a corporate officer from Miami as part of what seemed to be an official inspection tour of his bureau...
...Even though the Chronicle's 506,000 circulation is almost twice as large as that of the Mercury News, it is a far less substantial paper...
...The Ti-ibune Company owns the New York Daily News, Chicago Thibune and the Orlando Sentinel...
...William Randolph Hearst, Joseph Pulitzer, and EW...
...The investor who bought Knight-Ridder stock at the beginning of 1986 would have gotten a 20 percent return from stock appreciation and dividends by year's end, almost as high as Gannett's 22 percent...
...Instead of having its reporter, Lewis Simons, cover Prime Minister Nakasone's latest press release, they have him work on major enterprise stories geared towards the computer industry...
...In one exercise, said a graduate of the institute, you get to play editor...
...By contrast, the Huron Daily Plainsman, run by Freedom Newspapers, is thin, almost all AP copy, and full of probing articles such as the gripping saga of a traveling family band, like the Partridge Family, where the kids are blind...
...But the battery of exams is mostly remembered for its comprehensive psychological test,designed to measure ten skills like "thoughtfulness" and "personal relations" abilities...
...It would be one thing if Knight-Ridder's attention to news threatened to bankrupt the company...
...Tiny stories, like those nutty Soviet kids, pop out everywhere, and big chunks of white space between stories make it difficult to tell where you are...
...You have an in-basket and an out-basket, and a couple of hours to delegate all these decisions to your subordinates...
...Chains rarely do...
...Such generosity with time is not limited to the Inquirer...
...Philadelphians might not have noticed, except it was 1966 and Shapp, besides being a noted philanthropist, was a leading, and ultimately successful, candidate for governor of Pennsylvania...
...In Philadelphia, reporters wonder whether major layoffs announced last fall don't presage the folding of the Philadelphia Daily News which, unlike the Inquirer, has been losing money...
...Look at our Camden paper," he said...
...Where Knight-Ridder invested in editorial quality, circulation has usually risen, boosting ad revenues...
...But most chains poison papers not by pushing an ideology but by running them as little more than free weekly shopping supplements...
...Other chains have adhered to the tradition of putting the owner's imprimatur on the paper...
...Perhaps most reassuring, Americans seem to want more...
...Everyone has their favorite New York Post headline...
...At The Philadelphia Inquirer, special projects teams dot the newsroom and many reporters are given a remarkable tool—the freedom to take their time...
...We had to improve...
...The Mercury News carries two original, enterprising series by staff reporters...
...The executives at Knight-Ridder's corporate headquarters in Miami are very much concerned with the bottom line and pleasing the stockholders, but their strategy is starkly different from many chains: making long-term editorial investments with the hope that readers will gravitate towards quality...
...And while the Mercury News is more serious than the Chronicle, it is also more fun...
...David Lawrence, publisher of the Detroit Free Press, recalls that in 1974 Harless spent nights in the press room talking to workmen when the paper switched to a new printing system...
...With the Matthew Cooper is an editor of The Washington Monthly...
...The Inquirer has hauled in 13 Pulitzers since Annenberg left and the Daily News is a scrappy, honest tabloid with ten of its own local columnists and a great sports section...
...Maybe they were watching to see if you would look at them" About the best thing you can say about the personality tests is that few managers take them seriously, aside from the full-time Ph.D.s who devise the exams...
...None of this comes as a surprise to industry analysts who have known Knight-Ridder and other editorially-minded companies to be profitable...
...There's a tired piece by the paper's political editor about the campaign to fill Sala Burton's congressional seat...
...Glance at the front-page story about the horse who chugs beer in the July 11 Idaho Statesman and you know it's Gannett...
...And two years ago, the Newspaper Readership Project, an industry group, completed an encouraging study of what Americans want in their newspapers...
...But the huge circulation of Knight-Ridder alone belies that notion...
...And there are quirks of local ownership that are worth preserving if only for sake of diversity...
...Earlier this year, Adweek's jury of notables ranked three Knight-Ridder papers (Philadelphia, San Jose and Miami) among the nation's ten best, more than any other chain...
...These are triumphs worth noting because, like it or not, more and more papers are owned by chains—almost three quarters of the nation's 1,676 daily newspapers, up from 50 percent in 1960...
...HOT CHAIN NIXES WINGO, BUSCAPADES NABS PULITZERS, BIG BUCKS Knight-Ridder shows that newspaper chains can be profitable—and good by Matthew Cooper When Walter Annenberg was publisher and owner of The Philadelphia Inquirer, there was a lot of news he didn't see fit to print...
...that undergirds the culture that we inherited," says James K. Batten, Knight-Ridder's president...
...In Ohio, Knight-Ridder's Akron Beacon Journal makes Gannett's Cincinnati Enquirer look lightweight...
...The two Philadelphia papers have steadily declined and we have steadily increased ." With the Inquirer and News bleeding red ink, Knight executives did what they had done in other cities...
...I hate the fuckers," says one editor in California...
...Is there really a compelling reason, besides a thirst for prestige, for each paper to send a reporter to the hearings...
...Knight-Ridder's Philadelphia story is dramatic, but hardly unique to the chain...
...You could put neutral, but I'd heard that you were supposed to avoid neutral" "I remember there was a question about whether you were the kind of person who would rather throw a party or go to a party," recalls a reporter for The Philadelphia Inquirer...
...In many ways, it's a sensible link between pay and performance and many of the objectives are laudable, like sprucing up graphics or interviewing more minorities for jobs...
...What did appear in the papers usually had to do with crime...
...Rather than stop there, Knight-Ridder increased the news budget another $5 million...
...Even in foreign coverage, Knight-Ridder deploys its people wisely...
...The same touchy-feely quality taints KnightRidder's lavish training program at its corporate headquarters in Miami...
...The two papers run wire stories on the Moscow sexandspy scandal and both cover a local plane crash...
...But for every overpriced fern bar there's a great cheap restaurant that turns a healthy profit, too...
...When Gannett bought respected dailies in Detroit, Louisville, and Des Moines, a wake seemed appropriate...
...Most have gone to its big name papers like the Inquirer, Miami Herald, Detroit Free Press and San Jose Mercury News, but its less sexy papers in Akron, Ohio and Lexington, Kentucky have won, too...
...At some small papers, if you leave the lights on all night, you're in the red," he told Forbes...
...But Knight-Ridder shows that all newspaper chains don't have to be cheesy Murdoch or fluffy Gannett...
...The Times doesn't run stories from the Knight-Ridder wire...
...The hiring tests do have some valuable aspects—by having, for instance, copy editors copy edit they can uncover diamonds in the rough...
...But the Beacon Journal went further with a piece on how Akron is coping with the epidemic...
...When you pick up the Knight-Ridder paper in Long Beach, California, you are not just getting the best of Knight-Ridder but the best of The New York Times...
...Jojo the Weather Chimp It is these kinds of practices that remind you that Knight-Ridder is a big corporation, and corporations, even those that turn out great papers, can never quite take the place of the nation's great publishing families...
...The most recent report found that while Americans still devour crossword puzzles, comics, features and cooking sections, they want more...
...And the company's take-no-prisoners style of newspaper competition may be turning wimpy...
...Anyway, you get to the last memo in the box and you're told that one of your subordinates has died...
...Editors and business managers can take seminars on graphic design, headline writing, expanding suburban coverage, and other worthwhile topics...
...Philadelphians seemed to like it...
...The demise of the independently owned, civicminded paper is cause for concern and no small whiff of nostalgia...
...San Jose has a big Vietnamese community and the story is one of several that month on Asian topics...
...The soaring semiconductor industry helped boost San Jose's fortunes, but it's hard to imagine Donrey, Thomson, or Gannett re-investing that money in reporting...
...It's estimated that Thomson scores profit margins of approximately 30 to 40 percent—roughly twice the industry average...
...At Knight-Ridder, even seasoned reporters must take a personality exam...
...In the newspaper world there is Knight-Ridder...
...And there are signs that the other chains are learning...
...John Purcell, then-Gannett's vice-president for finance, told Business Week that Knight would have been better off crossing the river to Jersey...
...When Newhouse's Cleveland Plain Dealer became the only paper in town in 1982, the response wasn't to invigorate the city desk or open a foreign bureau, but to jack up ad rates by one-third...
...San Jose, for instance, controls the Tokyo and Mexico City bureaus...
...We are totally convinced that good newspapers are profitable newspapers...
...On one hand it avoids the syndrome of relying almost entirely on the AP and UPI wires...
...Knight-Ridder isn't the best buy, but it's very close...
...The new editor, Jim McMullen, replaced Annenberg flunkies and enlarged the staff with 80 new reporters...
...Knight-Ridder won't release the questions, but some have entered company lore...
...His successor, Eugene Roberts, got Knight to finance five new foreign bureaus, a 20 percent larger news hole, several wire services, and more than a dozen comic strips, including Doonesbury...
...So far they haven't been gutted...
...Mine ran when Yuri Andropov succeeded Leonid Brezhnev: "Sinister KGB Biggie Gets Brez Job...
...In the long run quality will win out," said John Morton, a newspaper analyst with Lynch, Jones and Ryan, a Washington securities firm...
...The lead is especially gripping: "It was 1967 in San Francisco and love flowed as freely as the psychedelic drugs ." You know the rest...
...They were much more interested in the bottom line than the Knights," said one reporter with the Mercury News, before and after it was consolidated into the Knight-Ridder chain...
...If they pull it off, it will be as dramatic as KnightRidder's Philadelphia coup...
...it runs an ad with the USA Today logo nestled between the special sauce, lettuce, cheese, and pickle of a Big Mac...
...More than anything else they want "news, hard news, real news whether its national or state, regional or local!' Knight-Ridder, at least, is listening...
...I remember there was a question about whether you were the kind of person who would rather throw a party or go to a party," says one reporter...
...While bad restaurants survive because the peckish and the harried need them, most papers have a captive audience and can easily get away with cutting back on quality (fewer than 2 percent of U.S...
...As long as you hold X number of meetings on a topic or meet with 'community leaders' Y number of times you're O.K...
...Times-Mirror boasts its flagship Los Angeles Times, the Baltimore Sun and Newsday on Long Island...
...Under the system, managers are given specific goals they must achieve...
...New Yorkers aren't so lucky...
...With sharp graphics and color that doesn't render everyone Martian-toned, San Jose is a striking paper, in part because Knight-Ridder's very profitable Graphics Network is supplied free to its papers...
...Within a decade the new company had transformed not just the Philadelphia Inquirer but several other dreary papers...
...The same commitment to news transformed the Charlotte Before Knight bought the Charlotte Observer, the ad manager regularly assigned stories dispatching reporters to cover sales and store openings...
Vol. 19 • September 1987 • No. 8
