I just saw on Silicon Alley Insider that the Boston Globe is laying off 42 people. A friend of mine from my (few) days at Ottaway Newspapers works for Boston.com, the newspaper’s website, at last I heard. I hope he still has a job. When I dug into the article on SAI, I was shocked at the numbers I saw. I had no idea that the Globe’s circulation had fallen into the shitter. I know that Boston is a fairly small market, but the Globe is its major paper (or was).
I read a crazy article in on nytimes.com this morning– part of the joy of not having a normal sleep pattern these days. Apparently, newspaper chains are having trouble selling off their properties. Big surprise, I know, given the imminent death of print, plummeting share prices and revenue bases that have been decimated. But, what I find interesting is the cluelessness that has led up to this.
I worked for the community news division of Dow Jones several years ago for about 10 minutes. Even in the brief time I was there, I learned how important acquisitions were to the company. Our fearless leader at the time, John Wilcox, indicated that part of the competitive landscape going forward would be the ability to win in the acquisition space. Newspaper chains would be competing to buy newspapers as much as they’d be competing for readers. He went on to discuss the different means available for acquiring newspapers.
What a difference three years makes …
Since then, Dow Jones sold several of its community newspapers in order to take advantage of a capital loss carryover. News Corp acquired the company and discussed selling off the Ottaway (i.e. community newspaper) properties, before taking them off the block due to lack of interest. Now, nobody is buying newspapers, including the once acqusition-hungry Gatehouse Media. In 2006, the question wasn’t “if?” but “how much?” Today, there is no question, just a statement: “not at any price.”
It’s not the death of print that’s surprising. Everybody saw that coming back in the go-go days of 1997. The sheer idiocy is in the fact that, as late as 2006, newspaper executives thought they’d be competing to buy print properties. Denial flowed strong, and they are now left with the consequences.
Rupert Murdoch must have a hell of a strategy, because what he’s doing doesn’t seem to make a damned bit of sense. Yesterday, word got out that he is taking the Ottaway Newspaper chain off the market. With declining newspaper valuations– not to mention that Ottaway is one of the most profitable pieces of the Dow Jones empire (at least before they chopped it with a divestiture in late 2006)– this is probably not stupid. But, ValleyWag suggests that Murdoch is interested in picking up a piece of former internet giant Yahoo!.
Didn’t the Aussie learn something about new media when he bought MySpace, only to have it eclipsed almost immediately by Facebook? Yeah, smart. That was $500 million well-spent. So, now he’ll go after a Web 1.0 has-been, for some purpose that only he can understand. He’s either a genius or a complete moron. Buying MySpace and Yahoo! (which trail Facebook and Google) is like rooting for the Chicago Cubs or the Boston Bruins. You have to know that you’ll never hit the top.
But, Murdoch’s the rich one, not me. So, grain of salt and all that.
I worked for Ottaway Newspapers for about 10 minutes a million years ago. Actually, it was exactly six months and 20 days, ending in March 2005. I left Ottaway to become a freelance writer, one of the better decisions I have made. But, I left some friends there, and I have been interested in the newspaper chain’s developments over the past few years. For those not in the know, Ottaway is the community news division of Dow Jones, which was acquired by News Corp last year.
When I worked for Ottaway, it was responsible for 40 percent of Dow Jones’ profits– while the Wall Street Journal was pretty much a break-even enterprise. Since then, of course, Ottaway’s margins have been squeezed. Hell, whose haven’t? The print business is in the crapper, and no amount of wishful thinking is going to change that. But, if News Corp was interested in putting some money into Dow Jones (by which I mean WSJ), selling Ottaway would be a pretty good way to do it. After all, Ottaway has been a pawn on its parent company’s board for quite a while. Shortly after I left, Dow Jones divested itself of several Ottaway newspapers so that the parent could take advantage of a substantial capital loss carryover.
Well, imaginge my surprise today. In my Google News Alert for Ottaway, I saw that the News Corp has taken Ottaway off the market, in an article published by the Nantucket Inquirer and Mirror. I can’t say I’m surprised. First, with print in decline, this can’t be a great time to sell a newspaper. Further, Ottaway has been a major money-maker for Dow Jones. So, why the hell would they sell it? Hey, I’ve always maintained that they should sell WSJ.
The bad news for Ottaway: continued dealings with the world according to Rupert.