Tough economic times hit privately owned newspapers, too. How they respond—especially when employment ad revenue falls 40 percent, newsprint prices grow by double digits, and there’s no elasticity left in circulation rates—explains why I wouldn’t trade my job as president of Cox Newspapers with any of my peers in publicly owned companies.
We might not have to answer analysts’ questions or issue quarterly financial reports, but we watch the bottom line every bit as closely as they do at the public companies. Our newspapers deserve nothing less. Poor newspapers whisper; healthy newspapers speak in a firm, clear voice. Put another way, a financially healthy newspaper can afford to take risks, to do the brave things that great newspapers have always done. Neither public nor private newspapers are immune from this journalistic fact of life.
Our owners, enlightened by 103 years in the business, know good times follow bad. That’s why they stress the long term, doing what’s prudent to weather a recession until the economy clears. We’re equally fortunate to be part of a company with broadcast and cable holdings and the world’s largest auto auction company among its assets. When one part of our company suffers, there’s another one doing well enough to pick it up.
A long-term view and a diversified portfolio may provide comfort, but they don’t ease the challenge of publishing financially strong newspapers in a downturn. If anything, sibling pressure can be as intense as anything Wall Street offers. Who wants to be the laggard at the next board meeting?
The pressure to perform is there, but it is self-imposed. It is private, and that makes all the difference. Not having to please an outsider every 13 weeks allows plans to develop into reality before they must be sacrificed on the altar of investor expectations. Fear, the greatest impediment to success, gets replaced by careful risk-taking—something encouraged, not punished, by wise owners like ours.
Ten years ago, in the depths of the worst advertising recession any of us had known, I guided our flagship newspaper, The Atlanta Journal-Constitution, to its worst-ever year-over-year performance. We were fighting a New York Times-owned newspaper that invested mightily and vowed to drive us out of Atlanta’s rich northern suburbs. Our owners’ instructions were clear: Win the battle and weather the storm.
We accomplished both tasks by asking ourselves what we could live without, and we controlled costs by eliminating those things. For example, we saved five million annually by ending subsidies that supported distant circulation. We cut some jobs because they were no longer needed to sustain circulation that neither Atlanta readers nor advertisers valued. Our egos were bruised, but we used these savings to beat this competing newspaper while insuring a brighter, better future for the Journal-Constitution.
Subsequent years of record-setting performances were reward aplenty. A lesson learned, it spread throughout our newspaper group. The people who run our newspapers today are the same people who ran them 10 years ago. That’s another feature of privately owned newspaper groups. They didn’t wait until the first hint of economic softening to prepare for this downturn. Their work began even as they were enjoying the boom years of the 1990’s. Newspaper publishers and editors learned from each others’ successes and failures. They identified best people and best practices and shared them liberally. They built an Intranet that links our 18 daily and 30 non-daily newspapers. Work that appears in Atlanta, Austin, Palm Beach or Dayton can run simultaneously in Waco, Texas, Grand Junction, Colorado, or Greenville, North Carolina. It’s a way of sharing quality and spreading costs.
Leaders at our newspapers spent the past decade getting better and getting ready for the next slowdown. When it became apparent as early as the late summer and early fall of 2000 that tough times were ahead, they were prepared. Without fanfare, they battened the hatches, yet continued to publish newspapers every bit the equals of those produced in good times.
Two examples illustrate how cooperation ensured quality and promoted efficiency, even as belt-tightening had begun.
Our Austin American-Statesman had more than a passing interest in last year’s presidential election which, with Texas Governor George W. Bush running, became as much a local as a national story. As the south’s largest newspaper, our Atlanta Journal-Constitution could stake its own coverage claim. And, as events unfolded, our Palm Beach Post found itself in the center of, perhaps, the greatest vote-counting story ever. Perhaps in another time, egos would have won out and three or more Cox reporters would have covered the same campaign trails. Not this time.
Because our large newspapers, including the Dayton Daily News, agreed to an approach coordinated by our Washington bureau, our journalists seldom tripped over each other. Zone coverage of the candidates freed reporters to pursue other important election stories. Reporters like Austin’s Ken Herman, who covered Bush as governor, provided a talent that benefited all of our newspapers. Never, our editors later agreed, had our election coverage been better.
On a lesser scale, our newspapers’ sports editors met earlier this year and made some unprecedented coverage decisions. Atlanta’s sportswriters would cover the Masters Tournament on behalf of our newspapers, while Palm Beach would cover Wimbledon. No doubt, some reporters and columnists grumbled, but did coverage suffer? Were the $40,000 saved in air fares and hotels on these events worth it? Ask that question of a recently laid-off person at another newspaper, and the answer becomes obvious.
Again, there is nothing extraordinary about such cooperation. It’s just easier to achieve free of the distractions so many public companies face.
Smart newspaper people know what to do. And that is to remain an indispensable part of readers’ lives. The best private and public newspaper companies recognize this and provide the resources, latitude and protection to let it happen.
It’s never easy to stare down tough times. But it’s a lot less lonely when you are certain of what your ownership wants and can move with confidence. For me, that is the way it has been for 30 years with Cox. It’s something I appreciate, but never take for granted—especially in times like these.
Jay Smith is president of Cox Newspapers, a subsidiary of privately held Cox Enterprises, Inc. in Atlanta, Georgia. Cox publishes 18 daily and 30 non-daily newspapers. A newspaperman since the age of 17, Smith began his career with Cox 30 years ago as a reporter for the Dayton Daily News.