Back in the black | A much leaner version of the former Blethen papers seems poised for a rebound
Photo/Judy Beedle
MaineToday Editor and Publisher Richard Connor in what will become new office space for the Portland Press Herald
Photo/Judy Beedle
Bobby Monks
Ten months after the Blethen family’s sale of three daily newspapers to MaineToday Media, including the flagship Portland Press Herald, the difficult transition to a new, smaller company continues, though with improving signs about revenue and profitability.
In a recent interview, Editor and Publisher Richard Connor says advertising revenues were up 7.5% for January over a year ago — a result he says “would be hard to find at any other newspaper company.” He attributes the gains to a new advertising director and a re-energized sales staff. A new print sales program designed by Pulse Research of Portland, Ore., has already produced $1.1 million in new sales during its first two months, Connor says. Automobile classified ad sales, which had tanked, are up 73% over a year earlier.
The Portland newspaper staff will move into new headquarters in leased space at One City Center this month, occupying the second floor mezzanine section and most of the fifth floor, which will become the newsroom.
They will leave behind the landmark Press Herald building on Congress Street that housed Maine’s largest daily for the better part of a century. The 390 Congress St. building, plus the long-vacant printing plant across the street, were sold for $6.2 million to New York developer John Cacoulidis, who plans to renovate them for office space. The move should be completed by the end of the month, Connor says.
The improved financial picture — all three papers are now profitable — does not eliminate the need for additional downsizing, however, he says. The company offered buyouts to more than 40 additional employees this spring, and laid off 17 employees in mid-March, leaving about 400 employees, down from 560 before the sale.
Bobby Monks, partner in Eagle Point Enterprises of Portland and other investment firms, is — along with John Higgins, chief investment officer of Ram Trust Services — a principal investor in Maine Today Media.
He says Connor has been carrying out the plans he laid out to investors. “It’s a much better paper — better coverage, editorials and advertising,” he says. “People want to come to work again.”
When the Blethen family put the newspapers on the market two years ago, Monks says, “The question was whether the paper would close down, or whether we could save some of the jobs.”
The unfavorable climate for newspapers nationally was reflected in the need for Connor “to make some very difficult decisions to let people go. But he made those choices, and now we are profitable again.”
Monks characterizes the company’s debt as “very small in relation to revenue,” and said it could be paid off by the end of the year. He declined to reveal specific numbers. Last spring, financing held up the deal for months while Connor lined up investors.
When Connor assumed the helm, 60 employees, including the previous top management (See “Where are they now?” page 15) took buyouts, and another 30 were laid off. Connor says management waited to make a second round of cuts, “because we didn’t want to eliminate any jobs we didn’t have to.”
Connor assumed a variety of roles during the transition — including writing a weekly column and many of the editorials. That marked a big change from management under the Blethen family and the founding Gannett family, which had not had an active editorial role for decades. Connor will continue to divide his time between the Maine papers and the Times Leader in Wilkes Barre, Penn., where he is also publisher and company president, but will spend the majority of his time in Portland.
Executive Editor Bill Thompson oversees day-to-day operations at the Kennebec Journal in Augusta and at the Morning Sentinel in Waterville, while Scott Wasser, a colleague of Connor’s from the Times Leader, has the same role in Portland. The Kennebec Journal recently added two reporters, Connor said, and there are again two writers at the State House bureau.
The Portland Newspaper Guild represents most of the employees at the Press Herald, and President Tom Bell says “morale is up” at the paper, despite the staff reductions and an across-the-board 10% pay cut. “A year ago we didn’t know whether any of us would have jobs,” he says. “It was clear the company was on the verge of bankruptcy.”
Bell says the newsrooms face a dilemma familiar across the industry: “Trying to put out the same product with fewer employees is not easy.” But he says Connor’s willingness to put two Guild members on the company’s board boosted confidence; employees also own 15% of the company’s stock. Monthly meetings of the Improvement Committee, which considers new ideas in all aspects of news gathering, advertising and circulation, have also helped.
He praises the hiring of ad director Michelle Lester, and says the ad sales staff has been given significant autonomy. “It’s like they’re running their own small business,” he says.
Bell credits the turnaround to Connor being able “to do a lot of big things very quickly,” including the sale of the downtown real estate, major jobs cuts and a redesigned website, which debuted in late February. The Kennebec Journal building is also for sale, with printing consolidated in South Portland. “Realistically, I don’t think the Blethens could have done that,” Bell says, noting that Connor’s willingness to share financial data with the Guild was key in gaining support for the plan.
Mike Lange, executive director of the Maine Press Association, echoes some of Connor’s observations about an advertising rebound. The daily newspaper members of the press association “were hit harder than the weeklies” by the recession because they are disproportionately dependent on real estate and automobile advertising, he says. “It’s starting to come back,” he says. “Maybe a warm spring and getting by April 15 will make people willing to spend,” he says.
Whatever revival in revenue occurs this year, Connor says the print side will lead it. The website redesign, he says, is selling more ads, but its major purpose was to allow continuous content revisions and more accurate tracking of readers’ use of the site. “We didn’t have the information we needed to be competitive,” he says.
Yet Connor says the website is not a big revenue source. “Our future still lies in print, because that’s where our major market still is.”
When it comes to newspapers, the demise of print has been greatly exaggerated, Connor believes. He can remember Ted Turner predicting in the 1980s that cable news would eventually put newspapers out of business, “and now CNN has more competition than we do.”
Anyone who claims to know what the news business will look like in 10 years “is fooling themselves,” he says. “We’ve made our bet [on print], and we plan to stick to it.”
Lange says the big worry for print publications is that young people will abandon them entirely and get all their news online. Recent surveys, he says, “show that for young readers, media is media. They don’t really care much about how they get news.”
But that also leaves them open to reading on paper as adults, he says. “You can spend a lot of time during the working day in front of a screen. But you still want to relax and read the paper.”
Douglas Rooks, a writer based in West Gardiner, can be reached at editorial@mainebiz.biz.
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