Digital First Takes Knife to Boston Herald Again

The clearcutters at Digital Worst – sorry, First – Media are at it again, engineering a Memorial Day Massacre at Fargo Street, according to Greg Ryan’s report in the Boston Business Journal (tip o’ the pixel to @EBMason).

Digital First lays off Boston Herald managers, workers

Digital First Media, the new owner of the Boston Herald, laid off at least six employees on the commercial side of the newspaper on Friday, according to a union representative.

A marketing manager and automotive sales manager were among those who lost their jobs, as were a receptionist and three employees in the paper’s financial services department, which handles billing and other tasks, said Donna Marks, a Herald employee who took over as president of the Newspaper Guild of Greater Boston earlier this week.

The cuts come in the midst of a steady exodus of Herald staffers who had survived Digital First’s original bloodbath right after it purchased the shaky local tabloid. (See our Hexit Watch™ for a partial list.)

Sad as it may be, what’s happening at the Herald is very much newspaper business as usual according to this piece by Bloomberg’s Gerry Smith.

Several hedge funds have become newspaper barons in recent years. Alden Global now owns about 60 daily newspapers through a subsidiary, Digital First Media. New Media Investment Group, which is managed and controlled by private-equity firm Fortress, owns almost 150 newspapers in smaller towns like Columbus, Ohio, and Providence, Rhode Island, through a unit, GateHouse Media. And hedge fund Chatham Asset Management LLC is one of the largest shareholders and bondholders in McClatchy Co., publisher of the Charlotte Observer and Miami Herald.

Helpful chart:

Smith adds, “’They’re not reinvesting in the business,’ Ken Doctor, a longtime newspaper analyst and president of the website Newsonomics, said about Alden Global. ‘It’s dying and they are going to make every dollar they can on the way down.’”

Two certainties at the Boston Herald: 1) They’ve got company at over 200 other U.S. newspapers, and 2) They all face the same future of death by a thousand paper cuts.

Is the Boston Herald Print Edition Now in Jeopardy?

As the sadreading staff has previously noted, the Denver Post is the Ghost of Printmas Future for the Boston Herald, given that both papers are owned by Digital First Media (slogan: “Where Newspapers Go to Die”).

From media guru Ken Doctor at Nieman Lab (tip o’ the pixel to Brian Stelter’s CNN Reliable Sources).

It might only seem that the walls are tumbling in at The Denver Post. Or it might be reality.

In a stunningly quick series of events, the Post has continued to shed staff — not by firing or layoff, but by what might best be described as resigned resignation. At the same time, I’ve learned, a fresh round of budget cuts in the range of 10 to 15 percent is being planned for the paper, along with other Digital First Media properties.

Doctor says that Digital First’s parent company, the New York-based hedge fund Alden  Global Capital, is itself facing financial pressures, which “have led Alden to plan still another coming round of budget cuts at its properties.”

Bottom line: “As Alden demands to continue its level of profit-taking amid a 10-percent-plus drop in advertising revenue, its executives have mandated new cuts for the company’s new fiscal year, which starts July 1.”

Heads up to the shaky local tabloid:

Those cuts look to be in the 10 to 15 percent range, sources tell me, though it’s unclear the degree that newsrooms would be subject to the new cuts, given that they have already absorbed major cutbacks since the start of 2018. In fact, the Post and other DFM dailies may soon have issues simply getting a print paper out seven days a week.

Given that the Herald has roughly 17 home subscribers (in Brookline that would be us and Mike Dukakis) and lives off its newsstand sales, that’s very bad news indeed.

No print edition of the Boston Herald?

No Boston Herald.

(Sad fact to know and tell: Once you shut down your print edition, you have to lay off 80% of your newsroom. That would reduce the skinny local tabloid’s reporting staff to one very overworked journalist. Send condolences and Red Bull to Fargo Street.)

Boston Herald Editorial Page To Be Silenced?

When we last left Digital First Mishegas – sorry, Media – last month, the Denver Post editorial board was begging the newspaper group’s owner, New York hedge fund Alden Global Capital, to sell the Post.

Denver deserves a newspaper owner who supports its newsroom. If Alden isn’t willing to do good journalism here, it should sell The Post to owners who will.

The proximate cause of that plea was a looming 30% cut in the Post’s newsroom – a mystery, the editorial said, “as many [Digital First] newspapers still enjoy double-digit profits and our management reported solid profits as recently as last year.”

How solid?

Rock solid, as media guru Ken Doctor just detailed for Nieman Lab: “DFM reported a 17 percent operating margin — well above those of its peers — in its 2017 fiscal year, along with profits of almost $160 million. That’s the fruit of the repeated cutbacks that have left its own shrinking newsrooms in a state of rebellion.”

This week Denver Post editorial page editor Chuck Plunkett wrote another piece blowtorching Alden, but that one was rejected, which triggered Plunkett’s resignation.

“I was being boxed in so that I couldn’t speak,” Plunkett told CNN’s Brian Stelter. “How can I be silent at this point?”

Ironically, Plunkett may have silenced every editorial voice at Digital First’s newspapers.

[Plunkett] also said “there is active consideration of doing away with the editorial pages throughout the company.” He means “at all the papers” owned by Digital First Media . . .

That would include the Boston Herald, which coincidentally has just gotten its editorial page sorted out.

As CommonWealth Magazine’s Michael Jonas recently chronicled, after Digital First’s purchase of the Herald, it had no editorial page editor. But then it did.

Tom Shattuck, a former talk radio producer who has run the paper’s online radio station and written op-ed columns, will replace Rachelle Cohen, the paper’s longtime editorial page editor who left last month when Digital First Media took ownership of the Herald.

Except soon, according to Plunkett, he might not.

Put aside any opinions about Shattuck himself, whom Jonas calls “an unwavering cheerleader for President Trump, a sharp departure from the editorial page under Cohen.”

Representative sample: The editorial in today’s smoochy local tabloid under the headline Media distortion hits new lows. Clunky-as-hell lede: “Another week has gone by in which the media covering the president of the United States has committed reckless malpractice more disgraceful than usual.”

People might say no great loss if that voice goes away. Beyond that, there’s exactly zero chance that the shaky local tabloid will ever go scorched-earth on Digital First.

Even so, no editorial voice at the Herald?

That would be just wrong.

American Prospect: Boston Herald Prospects Dim

Since last month’s announcement that Digital First Media had won the Boston Herald auction bakeoff, there’s been a steady drumbeat of prebituaries for the shaky local tabloid.

The Boston Globe’s Jon Chesto and Andy Rosen predicted a rolling thunder of staff reductions, while Nieman Journalism Lab director Joshua Benton said flat-out “to be owned by Digital First is to be gutted.”

Now comes this piece (tip o’ the pixel to MASSterList) in The American Prospect by Hildy Zenger, which is the pen name (Hildy for Hildy Johnson, Zenger for John Peter Zenger) of “a writer who works for a newspaper owned by a private equity firm”).

Hello Digital First, Goodbye Boston Herald

Just before Robert Kuttner and I filed our American Prospect article on the rape of the newspaper industry by private equity predators in December (“Saving the Free Press from Private Equity”), the prime nemesis of our story, GateHouse Media, bid $4.5 million to buy the 171-year-old Boston Herald, which declared bankruptcy the same day. The deal was conditioned on voiding union contracts and deep-sixing legacy pension, health, and other obligations. “Major layoffs in the newspaper’s 120-person newsroom are a certainty,” we wrote, in the context of GateHouse’s dismal record of gutting editorial staffs at its 770 daily and weekly newspapers.

But GateHouse was then elbowed aside by Digital First Media, whose $11.9 million bid won the February 13 bankruptcy auction in Boston, indicating that the DFM bean-counters have calculated a more profitable but probably even bloodier endgame for the venerable Herald, whose days are now surely numbered, according to industry observers.

The estimable newspaper analyst Ken Doctor “predicted that DFM would get its money out of the deal within three years at most, then declare bankruptcy and sell off the emaciated remains of the business for whatever they can get for it.”

So now the Herald’s plight has gone national. Not a good sign, people. Not a good sign at all.

Also . . .

From our newly minted Hexit Watch™

The inevitable exodus from Fargo Street has mostly proceeded under the radar, but here’s a significant departure: Former Deputy Managing Editor for News and Multimedia Zuri Berry has hied himself to Charlotte, NC. From his Twitter feed:

Best of luck in the Tar Heel State, Zuri.