It's a curious time for Tucson's daily-newspaper industry. On one hand, the paper that is struggling and underwent two significant layoff cycles in 2008, the Tucson Citizen, is owned by a company--Gannett--that is likely to weather the economic downturn. Meanwhile, the Arizona Daily Star, with a relatively decent circulation, avoided significant personnel cutbacks, but is operated by a company--Lee Enterprises--that could be in bankruptcy within the next few months, partially due to its purchase of the Star.
To be precise, the Star was part of Lee's buyout of Pulitzer in 2005, a move that now appears to have been an overextension on the part of Lee. The bill for that debt has come due, and it doesn't appear that Lee has the capital to pay its creditors. Lee has already rearranged payment structures and even delayed the filing of an important financial report from the beginning of the month to a scheduled release of Dec. 29. That report is supposed to include figures detailing the worth of its 50 percent share Tucson Newspapers--but as of Dec. 30, the financial report had not been publicly disclosed.
When announcing the initial delay, Lee said it "needs additional time to complete the complex calculations required to determine the extent of additional non-cash charges to reduce the carrying value of goodwill and other intangible assets, a result of increasing financial market volatility and deteriorating economic conditions." In other words, Lee felt it needed more time to crunch the numbers.
Tucson Newspapers' joint operating agreement (JOA) is probably the only thing keeping the Tucson Citizen--the afternoon paper whose circulation is now on average below 20,000--afloat, but the JOA didn't save a handful of employees from being let go as part of a pair of cutbacks demanded by parent-company Gannett. The Citizen lost three full-timers, including senior editor Cara Rene, in the first wave of company-wide cuts put into motion in August. The Citizen got off easily when compared to other Gannett properties: In the neighborhood of 600 lost their jobs nationally, with another 400-plus positions going unfilled. Within two months, Gannett announced another mass layoff--this time, a 10 percent cut which set into motion what many consider to be the largest round of layoffs in the history of the newspaper business. The Citizen took creative measures to reach the 10 percent figure.
"We had some open positions, people who cut hours voluntarily, one who accepted the severance, and a few people who had their hours trimmed involuntarily. Two people were laid off," wrote senior editor Jennifer Boice in a company memo. "As part of the cost reduction, I have frozen everyone's salaries for a year. That decision, which minimized the number of people to be laid off, affects every employee here. TNI decided not to go that route, so Citizen employees are the only ones affected.
"Gannett's goal was to position itself to meet the weak economy straight on. Its projections for newspapers' performance next year is pessimistically realistic, to my mind. Unless things go seriously south, we likely aren't looking at more cuts any time soon. I hope."
The cuts went into effect in early December.
Television and radio were hurt by the downcycle as well. Raycom, which owns KOLD Channel 13, announced nationwide layoffs in December that led to a 7 percent workforce reduction in Tucson.
"Every department at the station was affected to minimize the impact on any one department," said KOLD vice president and general manager Jim Arnold about the five full-timers and six part-timers ousted. "We mainly wanted to (have) the least impact on-air (and on) our ability to service. Everything with us was a position elimination and consolidation. ... This economy is spurring it sooner rather than later."
The television model continues to struggle with technological issues of its own. The advent of the digital video reporter has put an onus on networks to create different ways of making sure viewers get the advertising message (like product placement). It's tougher to bypass ads on network Web sites, or online TV-show locations like hulu.com, but that is not helping local advertisers. After all, the more viewers watch through their computers, the less they might know about their quantum of savings at Tucson Appliance.
Radio took its share of hits as well, most notably at Citadel Broadcasting's Tucson radio cluster, which laid off seven people as part of a mass company-wide cutback in October. (Citadel pays me in a part-time capacity for my work on UA sports pregame and postgame shows on KCUB AM 1290.) In terms of stability, Citadel may be in a position similar to that of Lee Enterprises, a smaller company that bit off more than it can chew: Citadel's 2006 merger with ABC Radio may be stretching its overall stability.
Terrestrial radio has not gotten through the technological evolution unscathed. Music-driven radio stations continue to deal with the impact of MP3 devices: Why sit through a block of commercials to get to songs picked by someone else when those songs are available to download onto a convenient portable device? Local content will likely be radio's most valuable niche, but in a community the size of Tucson, producing that local content comes with a price tag that most conglomerates aren't willing to pay. Local talk gets miniscule ratings, and in the music format, once one gets past the morning shows, most of the DJs still employed in this market seem confined to transitional roles--serving as barely more than voiceover providers with a live microphone.
So 2008 was anything but great. The million-dollar (or more question): Could 2009 possibly be much worse?