A golden age for news start-ups? The impact of another newspaper bankruptcy

By Steve Outing

I can’t say I’m surprised that Denver-based MediaNews Group (well, technically its holding company, Affiliated Media Inc.) has said that it will file for bankruptcy protection. The Wall Street Journal has a report on the latest newspaper-industry dour development, pointing out that the Hearst Corp. has $400 million in equity and debt tied to MediaNews, “and the investment will be wiped out by the bankruptcy filing, according to people familiar with the matter.”

MediaNews is likely to survive, but not without some unfortunate consequences for its newspapers. From the WSJ article:

“(MediaNews Group CEO Dean) Singleton also said cleaning up the company’s debt load allows him to help lead newspaper-industry consolidation, which some people in the industry say would help publishers stay afloat by creating stronger, more efficiently run groups of papers. Others are less sanguine about the benefits of consolidation.

“People in the industry have pointed to MediaNews’ paper in St. Paul and the Star Tribune in Minneapolis as potential candidates for a combination, as well as to adjacent papers in Southern California published by MediaNews, Tribune Co. and Freedom Communications Inc.”

In other words, yet another newspaper-company bankruptcy means that more muscle will be cut from newsrooms (the fat’s already gone) and communities will be more poorly served in the consolidation that’s necessary for industry survival.

We’ve seen plenty of awful things happen to newsrooms, and now we’re seeing things like copy editors being considered for elimination to save money. (E.g., Star Tribune.)

The newsroom cuts keep coming, and as newspaper companies emerge from bankruptcy owned largely by the banks that held their debt, a return to strong staffing levels and higher quality is unlikely anytime soon. (And why would advertisers return to that?)

So, it looks to me like now is a great time to be in journalism!

I’ve said that a few times recently when speaking to groups of college journalism students, and while I’ve gotten some nods of agreement, I’ve seen more heads shaking and puzzled expressions. But here’s what I mean:

Newspapers across the land are declining in quality, and lacking in coverage of their communities. A retired university journalism department head just today wrote this to me in a private e-mail about his local paper, owned by one of the largest newspaper companies in the U.S.:

“Today’s [newspaper name redacted] is a bulletin board of one-paragraph meeting and event announcements, with canned features from other [corporate parent redacted] papers, local columns by city and county functionaries, booster pieces by c-of-c officials, religious claptrap by evangelists, columns on how and why to clean up your garage, pet care, etc. People who want to announce weddings and funerals are charged by the column inch, and the practice of depth reporting is a distant memory.”

I don’t see a way out of this for local and regional newspapers owned by large media companies. Do you? So newspapers will likely continue to decline, while simultaneously, new digital news entities (for- and non-profit) will continue to increase in quality. After all, the newcomers don’t have massive debt to worry about or expensive presses to maintain; digital publishing is cheap in comparison.

And, of course, many of the new news entities emerging are run by the talented journalists laid off by the once-great newspaper companies. So new news providers’ quality will continue to improve.

The problem for all the new-comers to the (reinvented) news game is the lack of a clear business model to support quality journalism in sufficient quantity. But I’m more confident that they can figure that out than I am in the newspaper industry figuring out the digital business model while also handling the collapse of their legacy business.

“New” news media rises as the old falls. MediaNews Group’s troubles are only the latest to open up more opportunities for the new news eco-system to develop.

It’s an exciting time to be a journalist, if you can stomach the chaotic environment. It’s a lousy time to own an established news media business if you’re still in love with its outdated business model.

Author: Steve Outing Steve Outing is a Boulder, Colorado-based media futurist, digital-news innovator, consultant, journalist, and educator. ... Need assistance with media-company future strategy? Get in touch with Steve!

5 Responses to "A golden age for news start-ups? The impact of another newspaper bankruptcy"

  1. […] Steve Outing: A golden age for news start-ups? The impact of another newspaper bankruptcy […]

  2. Mark Loundy
    Mark Loundy 8 years ago .Reply

    Why the redactions?

  3. William Mougayar
    William Mougayar 8 years ago .Reply

    Well said. There is a massive re-structuring going on with ‘old’ media companies. Their business model is bloated, and doesn’t lend itself to the lean, fast and furious online models.
    It would be nice if some of them could survive by starting with a clean slate while embracing all the innovations that online brings,- real-time, social journalism, citizen journalism, crowdsourcing, hyperlocal, commentaries, personalization, etc.
    The emerging new eco-system of players is definitely a great opportunity for surviving journalists to hatch their wagon to.

  4. Allan Talusan
    Allan Talusan 8 years ago .Reply

    I think you have put out there some strong points concerning the recent news of my company, MediaNews Group. Very strong opinions and a perception of what may be coming in the near media future. I just wanted to put out there a couple things to consider as well, just in case anyone is interested. MediaNews Group is seen as a media corporation and often is portrayed as a big brother overseeing and limiting the freedom of the local writer. Since I have worked here, I have found the opposite to be the truth. We do not censor our papers nor do we instill any corporate agenda on their editoiral content. We support the local sales efforts in advertising because we all know they need the support, but for many intensive purposes we are rather a transparent holding company.

    I have recently guest lectured (via Skype) at Arizona State’s Cronkite School of Journalism on the concepts of paid content and hyper-local media portals and have said very similar things that you have mentioned. That it is an exciting and nervous time for journalism with chaos all around us, but MediaNews group holds steady to the tenet that we must preserve quality journalism and support our local newspapers as some of the vital and necessary anchors to their respective communities, hands down. We do that by supporting their efforts in advertising sales and stil, to the best we are able, maintain the high quality of our editorial writers. Hopefully, in this respect, there is a similarity between “old” media companies and “new news”. Thanks for your time and keep up the articles.

    Allan Talusan
    Director of Marketing and Creative Services
    MediaNews Group

  5. […] a chance for newspapers to buy time while adjusting their strategy in “the fog of media war.” Steve Outing takes a glass-half-full approach, arguing that the downfall of old-media chains like MediaNews are a great opportunity for […]

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