An imaginary conversation about the Seattle Post-Intelligencer

As the Seattle Post-Intelligencer’s fate continues to hang in the balance, Steven Swartz (CEO of P-I owner Hearst) and Lincoln Millstein (Hearst’s Senior VP-Digital) have lunch:

Millstein: Steve, we need to make up our minds about the P-I. The 60-day clock we put them on stopped three days ago.

Swartz: Yes, I’m sorry — I’ve been tied up dealing with the Chron, shuffling management, getting that e-reader going, and whatnot. But you’re right, let’s figure it out. I’m running out of time in my “100 days of change,” also. What’s your thinking?

Millstein: I’m thinking we go with an online-only P-I. We’re going to end up facing that choice in other markets, including San Francisco, and Seattle gives us the opportunity to test the model and find out what works and what doesn’t.

Swartz: But can we make money? We’ve been losing more than $1 million a month there — $14 million last year. I’m not interested in an experiment to see if an online-only brand can stand up against a print/only combo — I’m interested in making money. In the immortal words of Jack Welch: “fix it, sell it, or close it.” There’s no buyer in sight, so we’re down to fixing or closing.

Millstein: I say we fix it. We’ve got the numbers down to breakeven. That’s doing pretty well, in this economy. We can build profitability going forward. We’ve got a staffing plan: with just a few dozen content people we’ll have an operation that can cover Seattle well enough. We need to hire a sales and marketing staff, some tech people, some admin types, but overall we’ve cut that $ 14 million loss down to total expenses of $5 million. We can sell ads to cover that — the site is leading the market in unique visitors and pageviews.

Swartz: OK, but just to cover $5 million in cost, you need $100,000 a week in ads, and as I said, breaking even is not good enough — this is still a business. The right number would be $250,000 a week, or more. $13 million a year in revenue.

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Hearst's 100 days: on the right track, or misguided?

Steven R. Swartz, appointed president of Hearst’s newspaper division in December, sent around a memo last week reporting to his troops on the “100 days of change” he launched not long after taking the job, the midpoint of which had come around.

Predictably, the memo got leaked and was published by the Wall Street Journal (scroll down). And predictably as well, Jeff Jarvis deconstructs it, line by line, as “too little, too late”:

…a memo that could and should have been written and tried out 12 years ago (I’m sure people in this company and others did write versions of it; I know I did). If these actions had been taken back then, there still would have been time to make change and survive. But that time is over. Now the memo comes off only as desperation as the company threatens to close its papers in San Francisco — its onetime center of gravity— and Seattle.

Give a guy a break, already. It’s not hard for us journobloggers to pounce all over the industry’s hapless execs. I’ve done it myself, back in November when the clueless gathered at API to deal with “an industry in crisis” and decided that meeting again in six months would be a really good idea. (To their credit, they met again after just two months.)

But Swartz is not waiting for six months, he’s trying to reinvent a company in 100 days. Surely he knows that history is against him — as I suggested the other day, newspapers are in the same desperate straights passenger railroads were throughout the 1950s and 60s, and it’s a truly rare thing for a legacy business to survive disruptive innovation of the kind newspapers face. But as the lone onetime corporate hack in this stable of bloggers, I have to suggest that perhaps Swartz is breaking the mold and actually trying to change the business model. We (bloggers) can’t forever beat up on newspapers for their cluelessness and then pounce all over a guy who is at least getting some of it right, and might actually know what he’s doing.

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.