Friday, September 7, 2012

Morning Journal, News-Herald Parent Company Files for Chapter 11

Posted By on Fri, Sep 7, 2012 at 2:44 PM

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As if the media business needed any more bad news, this week the Journal Resister Company — the national parent of a handful of mid-market newspapers, including the Lorain Morning Journal and Willoughby News-Herald — announced they were seeking Chapter 11 bankruptcy protection. But piggybacking off that bad news was a silver lining of sorts: Digital First Media, JRC's owner, says it's close to a possible sale.

The company says this won't impact the day-to-day at the publications, but obviously that's some corporate-speak bull, especially considering the company's recent history.

This latest bankruptcy comes only three years after JRC shouldered out of another restructuring with more than $225 million in debt, according to a blog post from the company's top man, John Paton.

Since taking the wheel after that initial bankruptcy, Paton has become a sort of corporate patron saint for the newspaper industry, an old school print guy who now evangelizes about ditching the dead tree emphasis for the web. Last November, the New York Times' David Carr profiled the guy, here summing up some of the executive's out-of-the-box ideas for shaking up the newsroom:

He issued Flip cameras to all the reporters at Journal Register papers, helped create a newsroom cafe that’s open to the community in Torrington, Conn., and has been pushing to dump ancient proprietary newsroom software in favor of free, Web-based publishing tools. He has financed a lab to foster employee innovation, and the company has formed partnerships with a number of Web companies to provide news and information.

The Paton plan worked — kinda. The company's digital revenue and readership jumped and some of it's debt dropped off, but — and this is obvious considering the latest bankruptcy — it wasn't enough. In his blog post, Paton laid the blame on “legacy” obligations, which you can probably read as employee pensions, among other costs such as leases, etc. Bottom line: the digital push didn't help, even with the Flip cameras.

But despite the ink Paton and JRC get for having an eye on the industry's future, their celebrated digital emphasis is arguably a lot of smoke and mirrors. For a company that puts a lot of emphasis on digital, JRC's web sites are pretty rusty. Granted, our web site at Scene could use a fresh coat of paint and a shopping spree at the digital equivalent of Ikea for new fixings; but the Journal Register's sites are only a step up from GeoCities in terms of design, flooded with awkwardly placed ad space, and you can barely take a stroll without springing a pop-up.

And that's a shame, because locally both the Morning Journal and News-Herald put out a lot of good reporting, but it's a hassle getting to the material online. Again, this isn't on the folks here. The reason we bring this up is due to the growing chorus of current and ex-JRCers piping up in the wake of the bankruptcy that the company's brass talks a good game but fails to really implement anything close to a game-changer. Romenesko has former employee Rachel Jackson:


In the office, our technology was so slow and awful we couldn’t perform basic functions — including loading those very same clunky news pages so we could update the copy with breaking news and information. We watched as the company poured what could have been salary money into remodeling or relocating offices.

And:

John Paton and his cronies ran the papers into the ground in their effort to “modernize” the company. They were killing off print and and they openly admitted it. They cut jobs with abandon, set unrealistic individual production goals and local benchmarks, attempted to clone community engagement efforts everywhere without regard to local demographics or values, and — as the other employee stated — constantly spewed the company line about how great Digital First is and how we all need to get on board. (Aside: I’m 30, very active on social media, and grasp the concept of live online updates, but clearly Digital First did not provide the solution to the company’s problems.)

Along with news of the bankruptcy, Paton announced an affiliate with Alden Global Capital has already signed a stalking bid. We'll have to see how this all plays out, but we do hope that nothing serious happens to either the Morning Journal or the News-Herald. Then again, we'll have to see. As a bit of a depressing coda to this whole business, here's Paton in the New York Times profile on the future of small market print products:

“There are probably a whole bunch of dailies out there than cannot sustain themselves going forward at seven days a week,” he said. “Some should probably be weeklies, or there may come a time when they don’t put out a newspaper at all.”

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