A call for consolidation: Dean Singleton on John Paton, collective action, and the next waves of newspaper cutbacks

My recent post at NiemanLab:

When MediaNews Group and Journal Register Co. announced a quasi-merger on Wednesday — putting the two under a new common management structure named Digital First, with John Paton serving as CEO of both companies — it was the most dramatic combination of American newspapers companies in years. And it was also a victory for the vision of Dean Singleton, the longtime MediaNews CEO who has been a champion for consolidation in the newspaper industry for decades.

Singleton, now MediaNews’ executive chairman, spoke with me Thursday about the move and his belief that more mergers, clusters, and partnerships are essential for the industry’s survival. “Broadcast consolidated, cable consolidated, and newspapers, in order to have the same relevance that cable and broadcast and others have, need to go through consolidation,” he said.

Back in 1996, at a management meeting when I was working at MediaNews, Singleton said that he anticipated one day just three companies would own most of the papers in the country — and he intended MediaNews to be one of them. At the time, the company owned only 13 newspapers and was not among the top 10 in terms of total circulation. Fifteen years later, with paid weekday circulation of about 2.2 million (JRC adds in another 400,000), it ranks second, behind only Gannett’s roughly 5 million.

Having shed most of MediaNews’s debt via a strategic bankruptcy, and having stepped aside from day-to-day management, Singleton is focused on building the next rounds of consolidation. He feels that collectively, the newspaper industry “should have seen the changing media environment sooner and dealt with it sooner,” and that collective strategies are now essential.

For Singleton, Paton seemed like an ideal partner: Their friendship goes back decades, and Singleton actually helped sponsor Paton, who is Canadian, when he needed a green card to work in the United States.

As a reflection of the daunting headwinds facing the newspaper industry, he predicted: “I don’t think there’s any newspaper company in America that won’t have fewer people a year from now than they have today, and fewer still in two to three years.” But he’s not headed for an exit strategy: “I love this business, I’ve been in it since I was 15, and I love it and I care a lot about it.”

Here’s a transcript of our interview. You can also download an MP3 of our conversation. (Due to the interviewer’s klutziness, the first question and a snippet of the first answer were truncated.)

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How to restructure MediaNews into a digital enterprise with a future

Not very surprisingly, my former employer, MediaNews Group, is in workout. Surprisingly, this could turn out to be an opportunity to craft a truly new kind of news enterprise. Bear with me.

As reported first by the New York Times, later in the Wall Street Journal and in the Denver Business Journal, the country’s fourth-largest (by circulation) newspaper publisher has won a forbearance agreement from the lenders to which it owes $1 billion, plus or minus spare change. The lending group, led by Bank of America, is allowing MediaNews to skip its March 31 debt payment while it “attempts to reorganize its capital structure.”

This confirms that MediaNews is in default — forbearance agreements are designed to postpone foreclosure, and lenders don’t threaten to foreclose unless the borrower is in default of one or more loan covenants. Covenants breaches can entail failure to maintain certain balance sheet ratios rather than actually being short of cash, but they’re serious issues and call into question the ability of the enterprise to maintain its “going concern” status.

As it happens, I’ve had the personal pleasure of going through the workout process (in connection with the travails a small newspaper group now owned by MediaNews), and it’s not fun. I’m sure MediaNews CEO Dean Singleton (that’s him in the picture) never thought he’d find himself in this situation.

Continue reading this post at Nieman Journalism Lab.

Hearst, MediaNews: you can invent the future in San Francisco

MEMO

TO: Steven Swartz (CEO, Hearst Newspapers) and Dean Singleton (CEO, MediaNews Group)

See that bridge? When finished in 1937, it was not an incremental step. It was a leap into the future.

Wouldn’t it be a terrific idea to search for the boldest, most imaginative solution to your problems in California?

Mr. Swartz, you’ve let it be known that Hearst will shut down the 339,000-circulation San Francisco Chronicle unless it is able to sell the paper or extract major concessions from its unions. Mr. Singleton, MediaNews owns just about every daily paper surrounding San Francisco, but revenue declines have forced you to impose mandatory furloughs on employees.

As Alan Mutter, the Newsosaur, suggests as part of a detailed analysis of the situation, and has suggested previously as well, MediaNews could be part of the solution. Antitrust issues are unlikely to get in the way of a combination of some kind. Major staff cuts are simply inevitable. But there is an opportunity to go far beyond a simple consolidation of operations.

I’ve suggested this before but, you might have missed it. So I’m going to repeat myself somewhat.

Mr. Swartz and Mr. Singleton, the real opportunity for Hearst and MediaNews in the Bay Area is to plan now for a truly transformational step toward the news enterprise of the future, rather than another incremental set of staff cuts and tonnage reductions on the path to oblivion.

It’s time to reinvent, to define a whole new way of doing business. In the Bay Area, that does mean merging the MediaNews papers and the Chronicle into one regional operation, but not stopping there.

Continue reading this post at Nieman Journalism Lab.