Word count: 957 | Reading time: 4 min read
Pretzel Logic
Good news and bad news from the Inky’s exalted leader.
I am reading a memo from Chairman Bob Hall and, as far as I can tell, what we have here is the classic good-news/bad-news scenario for my favorite local newspaper conglomerate.
Last week, Chairman Bob, publisher of the Inquirer and Daily News, issued an edict from his secret bunker, deep in the bowels of the Ivory Tower of Truth on North Broad. The interoffice correspondence was delivered to me by Inside Spies risking death, or worse, a lifetime banishment as the permanent Pennsauken-Merchantville Water and Sewer Commission Bureau Chief.
The memo was Chairman Bob’s way of keeping Inky and News staffers abreast of how the papers “are doing and on the progress we’ve made since my letter to you in March.” And it was sent to staff following a two-day strategy meeting, held last Tuesday and Wednesday at the Sheet Metal Workers Hall, where the future direction of both papers was discussed as part of an on-going effort to save Philadelphia Newspapers Inc. (PNI), parent company of the Inky and Daily News.
Let’s talk about the good news first.
Daily News is here to stay.
At least that’s the way Daily News people are interpreting the musings of Chairman Bob.
Chairman Bob told his gathered flock at the union hall that there were two issues that would not be considered as solutions to the company’s dilemma.
One was that the company would not change its policy of preference for minority hires.
The second was that there would be no discussion of closing, merging or otherwise deep-sixing the Daily News.
Daily News managing editor Brian Toolan says his people breathed a deep sigh of relief at the news.
Chairman Bob says he will not say if that is a good thing for Daily News staffers to do. “I cannot anticipate or account for what people should say or how it is said,” Hall said when I asked him if Daily News employees can finally get a good night’s sleep after years of rumors that the paper would go the way of the Bulletin.
is not Times-Mirror. And neither is Knight-Ridder, the owner of PNI. (Times-Mirror owns the LA Times, the Hartford Courant and the Baltimore Sun, among other papers, and recently pulled the plug on NY Newsday.)
Although you might get an argument from some people, the Inquirer — unlike Newsday — has not closed down its city edition. And, though the Inquirer‘s operating profit margin has fallen into the single digits, the paper is not hemorrhaging staffers like the Los Angeles Times did recently, letting more than 800 people take a hike because making 9 percent more money than the previous year was not enough.
Chairman Bob’s memo says that the company’s response to its financial problems resulted in about 75 positions being eliminated via an employee buy-out program — a far cry from the massive layoffs announced by the LA Times and Newsday.
revenue, writes the chairman, “had a strong showing posting increases over the last year of 7.1 percent for retail, 5.5 percent for national and 15.3 percent for classified,” for a “total increase of 9.8 percent, which puts us slightly over our goal.”
Daily News sold 1,700 more copies per day in the first six months of 1995 — 196,658 — than the same period in 1994.
And there is one more piece of good news in the memo from Chairman Bob.
“The popular picnic has been reinstated and will be held on Sunday, August 20.”
Now for the bad news.
at the Inquirer is plummeting, down 13,000 copies Mon.-Sat. to 468,810 and down 32,000 copies on Sunday, to 911,520, in the first half of this year.
“This is our most severe problem and one that many other newspapers are facing,” writes Chairman Bob. “We have launched many programs for the second half of 1995 that are designed to expand our readership and distribution of both papers. This is crucial because our financial health is based largely on advertising revenue, and advertisers continue to look closely at our circulation levels.”
increased advertising revenue “our operating profit is actually down because of the dramatic increase in the price of newsprint.”
According to Chairman Bob, PNI will be hammered by the rising cost of newsprint to the tune of more than $30 million this year and more than $26 million next year. As a result, that operating profit, which was “in the single digits in 1994 before taxes and interest, was even lower in the first six months of 1995.”
‘s operating profit margin “is lower than almost all other Knight-Ridder papers and well below the newspapers in Boston, New York, Washington, Dallas, Chicago and Los Angeles. Improving profitability must be an essential concern of our strategic planning process.”
Especially since the Knight-Ridder Puppet Masters in Miami do not take kindly to falling profitability.
Much of the rest of the memo discusses feel-goody methods for PNI staffers to take part in changing the company. There are several points at which Chairman Bob either thanks employees for getting involved, or offers phone numbers for them to call if they aren’t involved but want to be.
“All of us have an impact on the newspapers we publish, and all of us have an impact on the financial results that PNI produces,” writes Chairman Bob. “I believe that by more broadly sharing information about our business, each of us can be more directed in how we want to improve PNI’s financial performance.”
That said, Chairman Bob is less than pleased with sharing this information with me and, as a result, you.
“It is an internal memo to the staff,” says the chairman of a company that is supposed to thrive on obtaining internal memos to the staffs of other companies. “I will not discuss a lot of it publicly.”
