STAR LAYS OFF 52, WHICH WAS NEWS EVERYWHERE EXCEPT THE STAR
The Arizona Daily Star confirmed that 52 people—by outside estimates about 12 percent of the staff—were laid off from the publication last Thursday in what must be one of the largest downsizings in the morning daily's history. But you would barely know it by actually reading the paper, which spent all of six small paragraphs and a grand total of 123 words in a passing mention in the paper's business section and online at azstarnet.com the following day.
Mark Evans at Tucsoncitizen.com summed up the lack of coverage nicely on a Facebook post Thursday evening, once word of the mass layoffs had gone into spread-like-wildfire mode.
"For what it's worth, in 2008 when there were layoffs at the Citizen, TNI and the Star, Senior Editor Jennifer Boice came to me and asked me to write a story about it. I did and had it up on the web by noon. It's now 13 hours after the first layoffs at the Star began and still no story. Layoffs at the Star is news and the Star should be reporting the news. I'm more than disappointed."
Beyond the obvious jokes about how maybe the Star just doesn't have anybody left to cover the story, disappointment is stating it kindly. The Star's approach was downright embarrassing. While it doesn't have to belabor a sucky point, at least a modicum of consistency would have been professional. It's safe to say the Star would have been much more aggressive in covering a 12-percent workforce layoff for any other major employer in the region, and as such would have found time to mention it on its website the same day, where it somehow corralled the resources to update a story on a house fire that displaced a family and a piece related to Alzheimer's testing.
By ignoring what had become common knowledge, the Star looked like the outdated model that is destroying the industry, the near-extinct sloth content to drag its feet and not get around to its own news story until its print edition hits the street while those interested in trying to find out what was going on searched other sources, such as Dylan Smith's superb coverage of the happenings at tucsonsentinel.com, in stories and updates at tucsonweekly.com, over at the Citizen and on television news.
All of this, of course, is of little consequence to those who lost their jobs. Gone: an estimated 15 newsroom employees and workforce reductions in advertising, circulation, finance and IT.
Company financial woes have a way of being a distant issue—that doesn't affect me just yet—until the salvos are launched. Star employees were broadsided Thursday.
Said Star president and publisher John Humenik in Thursday's Star story, "Our leadership team is confident that these steps will enable us to focus our efforts and position us for a bright future."
Really? Now compare that statement with one from Tucson Citizen interim editor Jennifer Boice during an August 2008 layoff cycle:
"While these steps we are taking are painful, I hope we can all emerge from this economic downturn stronger."
As the record shows, that was one of many layoff swaths at the Tucson Citizen, until the paper finally shut its doors in May of 2009.
This is what management says when it's against the ropes. It talks, as Humenik did, about how tough a day it was, and I'm sure it was. As easy as it is to pigeonhole management as the evil ogre behind the fancy closed door, it's probably not terribly fun to announce the dissolution of much of your workforce, and then watch as an asinine corporate HR decision degrades them further with the assistance of a security escort. Then management desperately tries to put a positive spin on the future as a result of the downsizing, hoping it can somehow appease the remaining employees and right the ship, or buy some time before abandoning it altogether, fully aware the chances of another significant barrage on the horizon.
Now to state the obvious: What Humenik says is not what Humenik knows. Lee Enterprises, the publisher of the Arizona Daily Star, is in deep shit. The reality remains that the company is staring at a billion-dollar debt payment due in April, and has yet to reach a negotiation on the financial terms it would prefer. But Lee doesn't have much bargaining power, and if any of the more than 150 investors Lee has met with don't like the terms, their patience could be the company's demise. It's Lee who eventually has to agree to a restructuring deal, not investors, who can simply watch and wait. If that happens, Lee goes belly up, because Lee needs to make a deal with someone. There were rumblings from sources quoted in a Bloomberg.com story said to be inside Lee negotiations a week or so ago suggesting bankruptcy was very much on the table.
According to company CEO Mary Junck, Lee has cut debt by more than $700 million since 2005. It turned a profit of $46 million in 2010, and says it has a cash flow of $110 million, but those numbers don't add up very well when a billion-dollar bill comes due in eight months. On July 15, Lee reported it expects another third-quarter decline, down 4.2 percent from the same period a year before.
So let's say Lee has about $150 million available. That's still $850 million short of what it owes in April. So how does it get there? One, try to convince investors that even though it pulls in a profit of about $50 million a year, 1/20th of what it owes, that maybe paying off that debt by the middle of the century is good business. Or two, start laying off employees, and ultimately selling properties. If you're one of Lee's larger entities, say the St. Louis Post-Dispatch or the Arizona Daily Star, you might want to get that new masthead ready.
There is no bright future in morning daily print journalism. We've known this for most of the last decade, but the public's transition to online news has moved much faster than the industry's ability to effectively monetize it. As a result, staff gets cut, almost certainly along with the quality of product. But Corporate hopes nobody will really notice.
In this industry, and in this community, if Humenik's "bright future" has shown us one thing, last week's 52 layoffs probably won't be the last.