By: Kyle Whitecotton
by Paul K. Harral
If you aren’t alarmed at the changes in the Fort Worth Star-Telegram, it is because you don’t understand the implications.
The 106-year-old Fort Worth institution is shrinking before our eyes through successive waves of layoffs and buyouts — 14 in all (three in 2011 alone and one this February) by one former staffer’s count.
Since its first published edition, Jan. 1, 1909, the newspaper and its publisher — whoever that happened to be — have been leaders in Fort Worth and for much of that time in sprawling West Texas. The paper has been a witness to — and often a shameless promoter of — Fort Worth’s dynamic growth from a dusty Cowtown to the modern city it is today.
I need to disclose that I came to the Star-Telegram in 1986 as an assistant managing editor and took retirement — volunteered for a buyout is another way to say that — in April 2009. At that time, I was vice president/editor of the editorial page.
Through its history, the paper was loved or hated, but the visceral connection between it and its readership was unmatched anywhere in my experience. Letters to the Editor often had the tone of a scolding from your mother: “I am so disappointed …”
But the newspaper is in danger of becoming irrelevant to the city it helped build.
Many papers across the country face similar challenges. But the Star-Telegram faces a problem that many other papers do not — the staggering debt load of parent company McClatchy Newspapers.
Executives at the Star-Telegram were offered an opportunity to comment for this article but declined to respond. CEO Gary Pruitt, head of the company when it bought the Star-Telegram, announced in March that he was leaving the company to become president and CEO of the Associated Press.
“I think it’s still a pretty good newspaper,” says former publisher Wes Turner. “I think the Star-Telegram does as much as they can with the resources they have available. It’s a shadow of what it was 10 years ago, but then again, we had twice the resources — more than twice the resources — in the newsroom.”
There were also more pages of newsprint. What journalists call “news hole” is a function of advertising page count, and newspaper print advertising is off by slightly less than half across the country since 2006. Page count follows that trend.
One place that makes an impact is in political recommendations.
“I continue to be troubled by the way the Star-Telegram handles political endorsements,” Turner said. “I believe that publishing a list of endorsements should be done prior to the beginning of early voting.”
But in the past, the newspaper would add additional pages if necessary to see that that happened.
“They routinely print their endorsements of local races just prior to regular voting. I think this contributes to the politicians and public viewing the paper as less relevant to the process than ever before. It is certainly making them less connected and important to the community,” Turner said.
The Star-Telegram has always been a top performer for whoever owned it, and there’s no reason to assume that has changed. Performance figures of individual newspapers in chains are virtually impossible to obtain unless someone talks. And no one is.
General circulation newspapers have always faced a dilemma.
A newspaper is like a lumberyard, legendary Texas journalism professor David McHam once told my class at Baylor University. A lumberyard can’t just carry 2 X 4’s eight feet long because builders need a variety of things. The same is true of a general newspaper. Some want international news, and some want bridge columns and almost everyone wants local news.
Newspapers can cover the world through wire services and syndicates at relatively little cost. But they can only cover local news with local staff members. And that’s expensive.
When I came to the Star-Telegram in 1986, the FTE count — that’s full time equivalent — was about 1,400 across all departments. Only a few at the paper know the true number now, and they aren’t talking. But it’s reasonable to assume the count is about half that.
At the height of the newspaper war with the Dallas Morning News in Eastern Tarrant County, the authorized newsroom strength was 425 staffers. Some think it is well below 200 now, perhaps about 150.
McClatchy was upbeat in a February 2012 news release about its progress on debt reduction in 2011 and at a slowing in the decline of advertising revenue. But that news immediately preceded the latest wave of buyouts, layoffs and job eliminations at the Star-Telegram.
Among the casualties in that round were Melinda Mason and Faye Reeder. Those are not household names like Randy Galloway, but the two women were the primary faces in the community for the newspaper and oversaw community involvement and sponsorship activities. Reeder is still on board part-time. But the action signaled a continued withdrawal from the community.
The Austin bureau was closed and will now be staffed out of Fort Worth.
“No business entity in history has contributed more to Fort Worth than the Star-Telegram, but decades of goodwill and competence have been wasted by a combination of economic trends and corporate incompetence,” says O.K. Carter, who covered Arlington for 40 years as a reporter, columnist and editor before taking a buyout from the Star-Telegram in April of 2008.
Literally millions of dollars — real dollars and free or reduced advertising space dollars — were poured back into the community through sponsorships and support of organizations working to benefit the city and its residents.
Previous publishers of the Star-Telegram — starting, of course, with founder Amon G. Carter Sr. — have been highly visible in the community, chairing committees and task forces and serving on boards of directors of civic organizations. Some might say they were too involved, but that won’t be said about current publisher Gary Wortel. He also is the first publisher to live outside the city of Fort Worth.
“[Carter] ran Fort Worth. He loved it, lauded it, lavished gifts on it when it was good, punished it when it was bad,” wrote the late Jerry Flemmons in Amon: The Texan Who Played Cowboy for America. “Amon was the ruling body of Fort Worth, and he never held a public office. To oppose him was to live a lean existence outside the city’s power base.”
Carter built relationships across the United States and especially in the White House that resulted in the location of the Bomber Plant in Fort Worth. He also was instrumental in the Colonial National Invitation Tournament, what has become the Cultural District and the creation of Texas Tech University in Lubbock. He pushed for an assembly plant 30 years before the General Motors plant opened in Arlington.
“At his death, fully half of Fort Worth’s population worked for companies he had lured to town,” Flemmons wrote.
For many years, the Star-Telegram had the largest circulation of any paper in the South, and a publisher’s statement, March 31, 1952, showed morning and evening circulation of 242,072 — 57,244 more than the Houston Chronicle and 69,767 above the Dallas Morning News. Sunday circulation was 221,231, also the top figure in the state. Sixty years later — also in March — the paper’s circulation (now a morning only paper) was 152,654 daily and 231,043 Sunday.
“It might be human nature to say we produced a better newspaper in my day than is being produced today,” said Roger Summers, who came to work at the Star-Telegram on Oct. 12, 1960, and retired on June 26, 200l.
“That would not be fair. Even with all of the reductions at the Star-Telegram, there still is in place a strong, experienced, professional staff that is more than able and willing to produce a good newspaper,” he said. “What is required is adequate financial support and improved leadership and guidance from corporate.”
Turner and Summers are right about the present quality of the paper. But Fort Worth isn’t used to having newspaper like other American cities.
It is startling to hear politicians and city officials who long lived by the philosophy of never arguing with people who buy ink by the barrel — or railroad tank car in this case — openly make fun of the paper.
“The reader’s always right,” Turner said. “Is it fair? It is what it is. There is a fair amount of criticism and jokes about the incredible shrinking Star-Telegram in the marketplace. But from a business standpoint, if you’ve got a little under $2 billion in debt that you are trying to service, your options are to cut your expenses and service your debt or go bankrupt.”
Faithful readers are alarmed and downright bitter. But comments about the size of the paper and the thinness on some days of the week miss the point. The point is that newspapers still do almost all of the original reporting in the United States.
“The product is still the cog in the wheel,” says former Star-Telegram Publisher Rich Connor, now owner of the Fort Worth Business Press. “Content is king. Local content trumps all other content.”
That requires reporters, photographers and editors — and news space.
Internet postings and Tweets get lost in a sea of information, but newspaper articles are right there in front of you to be referred tomorrow or days later, to be torn out and posted on bulletin boards in offices, or, perhaps the most important forum of all, stuck on the refrigerator door.
The Star-Telegram by all accounts has been a top performer for all of its owners, although actual numbers are difficult to come by. There’s no real reason to assume that the newspaper’s performance numbers — although obviously smaller — have changed under McClatchy ownership.
“The core of newspapers’ financial problems has been rapidly declining advertising revenues,” The Pew Research Center’s Project of Excellence in Journalism said in its report The State of the News Media 2011. “They fell nearly 48 percent since 2006. While the rate of loss was much less severe in 2010, trends were still negative, amounting to a loss of 6.3 percent.”
That’s a problem, Connor notes.
“Virtually all of the costs of a newspaper are in personnel and paper. And virtually all of the revenue of a newspaper is in advertising,” he said. “So when advertising revenue shrinks, which it is doing, where can you most affect the balance between revenue and costs in order to maintain profitability?”
Pew said profit margins remained around 5 percent but far below the 20 percent or better in the past that led to acquisitions and mergers by publicly traded media companies.
The golden age probably started in the mid- to late-70s and ran for about 20 years, says Turner.
“Profit margins were at all time highs,” he said. “It was a business that you’d be hard pressed to fail at if you were a publisher.”
Revenue hides lots of sins, but when advertising revenue began to fade, the realities of being a publicly traded company kicked in. The market is relentless. It demands consistent and increased performance. And it punishes companies that do not comply.
Shareholders, disappointed in the group’s profit margins, forced Knight Ridder — the owner before McClatchy and one of the most respected newspaper groups in the country — to put itself up for sale. McClatchy acquired the group in a $6.1 billion cash-and-stock deal. It immediately sold 12 papers for $2.078 billion. Sales included the Philadelphia Inquirer (18 Pulitzer Prizes), the Philadelphia Daily News and the San Jose Mercury News.
McClatchy announced completion of the sale in August 2006 and said that as of Aug. 2, total debt net of balance sheet cash stood at $2.58 billion.
McClatchy’s stock was $74.16 on March 1, 2005, before the sale. It was $2.54 on March 1, 2012, according to E-Trade.
Amon G. Carter Sr. started the Star in 1906 and merged it with the Telegram in 1909. In 1922, the paper opened the first Fort Worth radio station, WBAP — that stood for “We Bring a Program.” In 1948, the paper established the first television station in the southern half of the United States.
The paper was an early proponent of zoning, specialized editions for subsets of its circulation to the benefit of both small advertisers and hyper-local news junkies.
Zoning morphed over the years from a few columns inside the paper to inserted special sections to remaking parts of the front and local covers to, under Connor, three “separate” newsrooms under their own management (Arlington, Northeast Tarrant County and what was called “Fort Worth/Balance” — everything else).
“Our idea was to make a big paper small,” Connor said. “I wanted to be ‘the local paper’ in Arlington and in Northeast Tarrant County.”
There was resistance from many, including top editors, but it worked, Connor said.
It was expensive and inefficient in that common functions were duplicated in different locations. But the acid test began on April 3, 1996, when the Dallas Morning News printed the first edition of the Arlington Morning News. The reaction was instant — the Star-Telegram imported borrowed reporters from sister newspapers, transferred people in from elsewhere in the paper and hired just about anyone who could get in the door and fog a mirror. Editor Jim Witt bought dog tags and Army helmets for the staff. It was over Jan. 12, 2003, when the Arlington Morning News quietly published its last edition.
But before it was over, the Star-Telegram had increased the staff in Arlington to around 70 people and created the Arlington Star-Telegram out of the old Arlington Citizen-Journal.
What the Morning News couldn’t have known is that a few years before its attack, a small group of Star-Telegram editors met to assess how they would attack the Star-Telegram using what they knew of the assets of the Dallas paper. They designed a counter-attack strategy, and all those editors were still around when Dallas made its move. That wouldn’t be true today. The flood of institutional memory out the door in the past few years is daunting.
“Newspaper companies were sadly mistaken in their original assessment of the Internet in the 1990s,” says Tony Pederson, a professor and Belo Distinguished Chair in Journalism at SMU, who is chairman of the Division of Journalism in the Meadows School of the Arts.
“Newspapers didn’t understand that the Internet was a complete social and cultural revolution that would change everything we thought we ever knew about media,” Pederson said.
That led to a disastrous decision on the part of the nation’s newspaper publishers. In an effort to build online audiences, they gave away their exclusive product. They didn’t charge for access, and they didn’t actively pursue those who violated their copyrights on their intellectual property.
It’s not just newspapers, Connor says.
“Online shopping threatens every business model steeped in the past,” Connor said. But for newspapers, online revenue comes nowhere near to replacing print revenue.
In retrospect, it looks as if McClatchy overpaid for the Knight Ridder papers.
“They didn’t,” Connor said. “Times changed. Virtually anyone in any sector who bought a business or started one between 2000 and 2008 is now in a weaker position than when they bought. Welcome to business in America today. It will get better.”
O.K. Carter, who covered Arlington for 40 years as a reporter, columnist and editor before taking a buyout from the Star-Telegram in April of 2008, says the giant newspaper corporations have committed a great sin.
“They have separated themselves from their communities both by hiring people who are not part of the communities they serve and by bowing to the powers of Wall Street and the interest of self-serving corporate blowhards headquartered far away,” he said.
Many newspaper companies missed the early signs of what computers would eventually come to mean to the news business, but to its credit, the Star-Telegram did not. Enter StarText.
Tandy Corp. had developed the first personal computers and proposed an electronic news service for the new machines. Tandy would supply the equipment. The newspaper would supply the information.
Gerry Barker, now at The Palm Beach Post, volunteered.
It was successful almost from the start.
“For two years in the mid-80s, StarText returned a six-figure profit. Throughout the 80s, we were the only local service that I know of that made money,” Barker said.
“Why were we successful? Several reasons come to mind. It was simple to use, consisting of plain text and keywords. It was reasonably priced. ... But most of all, it was personal. The service felt like one large family, and we nurtured that every chance we got, including subscriber town hall meetings and picnics,” he said.
Jim Boughton of Arlington, a local computer specialist and former StarTexan columnist, says the service was years ahead of anything in the online world.
“Think of today’s buzzwords, and StarText had it years ago. Citizen journalist, StarText had it. Video columns, StarText had it. Breaking news developments, StarText had it. Social media, StarText had it. Blogs, StarText had it,” he said.
“We had both an online community and face-to-face community with social gatherings and user group meetings,” Boughton said. “Friendships and associations made way back then still live on. Though people have grown, moved and become distant, we still gather on Facebook and e-mail.”
The Star-Telegram may have been the first and possibly for a long time the only media company to understand that electronic media users form communities regardless of geography. It established a site called Virtual Texan to appeal to Texas and Oklahoma expatriates anywhere in the world.
It won a Digital Edge Award from the Newspaper Association of America for “Best Feature Presentation,” and when Barker left the newspaper, it had more than “10,000 pages of pure Texana, everything from books and recipes to rare photos and tall tales.”
Highly specialized local efforts like that came to a halt when Knight Ridder acquired the newspaper and standardized the Web sites. It was not unreasonable, Barker said, to try to achieve economies of scale and create a national advertising platform.
“What it didn’t take into account was the strength of the brands in their local markets and giving those brands latitude to leverage what made them unique. As a result, it alienated publishers and demoralized editors. Milk is a great thing to homogenize. Web sites aren’t,” Barker said.
The Star-Telegram Web site roared back a few years later with dfw.com and dfwVarsity.com, and the company has aggressively embraced social media and, in fact, constructed its new offices across the street from the recently sold old Star-Telegram building around that concept.
That and serving the niche markets may be salvation for the future.
“The smaller papers have an entirely different relationship with their readers and advertisers than do the metros. If you own a store or business in one of the smaller markets, you can still afford advertising in the local paper, and it will pay off for you,” says SMU’s Pederson.
“And obviously, the smaller newspapers have always been more dedicated to local news. They’ve always printed garden club news and Little League baseball results that people want,” he said.
In 1974, Capital Cities Communications, primarily a broadcasting company seeking to diversify, bought the Star-Telegram. Later, CapCities bought the ABC television network. The Walt Disney Co. acquired the Star-Telegram and its sister newspapers in 1995 when it acquired Capital Cities/ABC. Disney sold the newspaper holdings to Knight Ridder Inc. in 1997. Then came the shareholder pressure that caused Knight Ridder to put itself up for sale.
Classified advertising — long a mainstay of newspapers — has migrated to the Internet. Newspapers have fought back with Web-based sites like cars.com. But the amount of Web advertising money is minor compared ink on paper.
The Newspaper Association of America reported that print advertising in 2010 was just under $22.8 billion. Online advertising that year was just over $3 billion.
Connor was fond as publisher of retelling the old adage that railroads almost went out of business because executives thought they were in the railroad business rather than the transportation business.
He’d argue that the real problem was that railroads were run by people who really liked trains — and that newspapers were run by people who really liked newspapers.
I’m one. I adapted to computers in the 70s, bought a personal one in the mid-80s, was on the Internet in around 1989-90. But I prefer to read ink on paper. Others prefer digital.
“Something I’ve said many times since coming to SMU is absolutely true,” says Pederson. “The students we are teaching, and probably those who were students in the last 15 years, will never read newspapers in a paper format.
“You can look at basic mortality tables and predict pretty accurately when newspapers will stop being available in print,” Pederson said.
Turner and many others who toiled over the years for the Star-Telegram wish McClatchy the best of financial luck.
“I have a pension I am counting on continuing,” Turner said. “I have nothing but the best luck and support for [the company] to make that payment.”
By: Kyle Whitecotton