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Archive for 2009



Further Thoughts on the Future of Newspapers

Sunday, April 5th, 2009


Given the many comments and robust discussion sparked by our post on newspapers, here’s a link to an interesting piece last week from Presstime, which is published by the Newspaper Association of America. It features 10 smart and knowledgeable people discussing various aspects of the crisis in the industry. You can find it here.

5 Questions: How California’s Financial Flack Makes Sense of the Mess

Saturday, April 4th, 2009

Harold Dean Palmer, known in the political universe as “H.D.”, serves as Gov. Arnold Schwarzenegger’s chief spokesman on budget and fiscal issues as Deputy Director for External Affairs at the California Department of Finance. A former spokesman for U.S. Senators S.I. Hayakawa and John Seymour of California and Jim McClure of Idaho, he worked for Gov. Pete Wilson and state senate GOP Leader Jim Brulte before joining Schwarzenegger’s team in 2003.

Calbuzz: Lacking a PhD from the London School of Economics, describe the process you go through to understand the deep-in-the-weeds stuff, and then to translate it into English.

H.D. Palmer: At the start, it was total immersion — into the deep end without water wings. I had the good fortune to start at Finance at a point between the governor’s January budget and his revised budget in May, so the staff in each unit had the time to give me full briefings, in mind-numbing detail, on all of the programs in their respective areas, and then tolerated every rudimentary, basic and/or dumb question I had after that (and still have to this day).

I’m lucky because Finance has some of the smartest and hardest-working men and women in show business who know their stuff cold. My job is to work with the information I get from them, de-jargonize and de-acronym it in some cases, and then try to put it into basic terms that readers, listeners and viewers can understand to explain how and why the governor is putting forward all of the various proposals in his budget. When there’s an analogy that captures the issue in basic terms, I try to go with it. For example:

DISCUSSION AND CONSIDERATION REGARDING THE IMPACT OF CASH MANAGEMENT REQUIREMENTS ON APPROVAL OF AB 55 LOANS, INCLUDING POSSIBLE REDUCTIONS OR FREEZING DISBURSEMENTS FOR OUTSTANDING, RENEWED, OR NEW LOANS

Translation to human-speak: We had to shut off the spigot for infrastructure funding and we can’t turn it all the way back on yet.

CB: Who gives the best spin — your heroes among political spokespersons?

HDP: The two guys who I’ve always considered professional lodestars were Otto Bos — Pete Wilson’s long-time communications genius and aide-de-camp — and Marlin Fitzwater, President Reagan’s last and President Bush 1′s only press secretary. Both guys were total pros who understood the importance of being a truthful and trustworthy advocate for their bosses. And they understood that to be successful you have to be an honest broker between two institutions that often work at cross-purposes: their bosses and their clients, the press corps. Both of them definitely found the sweet spot. By doing that, both guys richly earned the respect of both their bosses and reporters. They also, I think, embodied some sage advice that I got when I first started out: take your job seriously, but don’t take yourself seriously.

CB: Who are the best and worst reporters in the state to deal with?

HDP: Me naming a “best reporter” would the professional equivalent of Michael Corleone kissing Fredo in the Havana nightclub in Godfather II. Next thing you know, that reporter’s in a fishing dingy on Lake Tahoe reciting Hail Marys. I respect the ones I do consider the “best” not to put them through that kind of public hazing. Come to think of it, though, there were these two guys who used to write politics for the Chronicle and the Mercury News who were real pains in the . . .

CB: If he was being really candid, how would your boss characterize the overall depth and accuracy of the state media’s reporting on budget issues?

HDP: I think he shares my view that reporters are trying to explain not only the mechanics of something that’s so complicated and has so many moving parts as the state budget, but also the political dynamics that overlay it. The challenge is that with the current economics of the media industry (see the word “abattoir”* in your Webster’s for further definition), we’re likely going to have a dwindling pool of reporters who have a lot of experience and familiarity with the beat. Which is why I have always offered (and continue to offer) reporters coming onto the beat the same kind of into-the-deep-end briefings from our staff that I got when I started.

CB: How many press calls do you field in a day? What’s the most you received and what was the issue? (OK, that makes six questions)

HDP: Usually 10-15 a day. And given everything regarding the budget and public finance of late, it’s like Forrest Gump’s box of chocolates — you never know what you’re gonna get. The Guinness Book record, though, had to be this February when the budget was passed at dawn. We went over to the governor’s office to brief him later in the morning for a noon press availability, then for a session in his office after that was done. I’d been out of my office for about an hour, and the red message light was on when I returned. I hit the button and robo-voice said: “You have 22 unheard voice mail messages.” And they kept right on coming while I was taking down the voice mails and returning them. It was the media-relations version of trying to walk up a “down” escalator.

*Editors’ note: abattoir [ab-a-twahr] = slaughterhouse (we had to look it up too)

Friday Fishwrap: Cheap Shots, Drive-Bys, Three Dots

Friday, April 3rd, 2009

Snark alert: Count Kam Kuwata among the minority of political insiders who thought Steve Poizner’s “Happy 40th Anniversary” blast at Jerry Brown this week was a swing and a miss.

Poizner noted that April Fool’s Day marked exactly four decades since The Man Formerly Known as Moonbeam won his first election to the L.A. Community College Board, in not-no-subtly jabbing at Brown’s never-ending electioneering and his septuagenarian status: When Brown first won office, Poizner’s mouthpiece said in an e-blast, “Nixon was the newly inaugurated President, John Lennon and Yoko Ono were going strong, people were still using carbon paper, an Apple was something you ate and the Apollo Mission had not yet landed on the moon.”

Said Kuwata, who’s on the gubernatorial sidelines while his liege, Lady DiFi, clenches her furrowed brow in contemplation of whether to run: “It’s a surprise that Steve Poizner, who hasn’t been defined yet, comes out and starts talking about negative things before he starts talking about a vision about how to get California out of this mess.”

“Political hacks have a way of telling voters what they should believe about people,” Kuwata added, warming to the task. “But the reality is the age argument in California was tried against Ronald Reagan and failed and tried against Alan Cranston and failed. My experience is that voters care more about your ideas and how credible you are.”

While Kuwata makes a valid historical point, count on geezer digs at Brown –- born the same year “Gone With the Wind” was released and before Joe Louis knocked out Max Schmeling –- to abide, at least subtly, in a campaign when generational change could be an important theme (see Newsom, Gavin incited by South, Garry). Besides, the grumpy old men at calbuzz found the combination of acid and wit in the Poizner hit -– “Jerry Brown, what a long strange trip it’s been” –- kind of a refreshing change from usual attack fare.

In fact, we liked it enough that we suspected Poizner supporter Ken Khachigian — who once said he has studied Brown “like Patton studied Rommel” — was the invisible hand behind it. But the GOP senior statesman, who became Social Security eligible two years ago, demurred, and gave full credit to Poizner’s press point man, Kevin Spillane.

“Actually wish I could take credit,” Khachigian emailed calbuzz. “But my clone – Spillane, who I trained in the Rosario Marin and Chuck Poochigian campaigns — is trying to outshine the Yoda. Nice little blast, huh? I think Jerry’s free ride might be over.”

Limbering up for his shot at Brown, Spillane earlier in the week also fired on Republican state Sen. Abel Maldonado, who got all huffy with Poizner for opposing the tax-raising, budget-enacting Proposition 1A. Maldonado had released an apropos-of-nothing, two-page blistering letter saying the Insurance Commissioner’s stance would “let the state fall into financial ruin just to win a political campaign.”

Said Spillane: “Senator Maldonado’s letter is a bit like the arsonist lashing out at the fire department for not stopping him from burning the village.”

Not exactly a Michelle Obama squeeze for HRH . . .

Two-fisted giver: At first glance, it seemed perplexing that Jerry Perenchio, late of Spanish-language TV giant Univision, would fork over $1.5 million to help Gov. Arnold pass Prop. 1A, while maxing out — $25,900 from him and a like amount from his bride — to wannabe governor Meg Whitman, who’s been huffing and puffing against 1A.

But then it occurred that a total of fifty grand to Ms. Meg is a cheap date for Perenchio, while the 1.5 large ensures he’ll have a seat at the Terminator’s table in the year-and-a-half plus the gov has left to dole out favors.

As the esteemed Dr. Hackenflack points out: “Listen fellas, if you’re worth $3 billion, giving $25,900 is the equivalent of giving $8.63 if you’re worth $1 million, right?” . . .

Democratic firing squad: The 1969 Santa Barbara oil spill is often cited as the event that hatched the environmental movement in the U.S. Now the debate of how best to battle offshore oil is pitting enviros and progressives against each other in S.B. in a divisive Democratic primary feud that may draw statewide attention. Details here . . .

A good man leaves the trail: A calbuzz hats-off to John Wildermuth, longtime political writer for the Chronicle, who’s taking the buy-out in the latest episode of that paper’s slow-death movie. Chron suits prevailed on him to stay through the May 19 special but after that, he’s gone from 5th and Mission and, for now, from the trail. Big John covered a lot of big stories, but says his favorite memory is a small, intimate one: watching Barbara Boxer literally do a dance in a motel bar in Fresno, after reporters told her the next day’s L.A. Times poll put her ahead for the first time in her 1998 re-election campaign.

“These days, campaigns can rent a compact car, not a bus, to accommodate the traveling press,” he says, “since most papers are convinced you can cover politics by reading releases, watching videocasts of speeches and blogging from your desk. But it was the very human moments that made the trips worthwhile, both for reporters and their readers. I’ll miss it.” Safe travels, man.

This photo has been around the block already, but in case you missed it, and to underscore Wildermuth’s point, here’s what a campaign bus used to look like in California. This was Alan Cranston’s final campaign swing in 1986 including calbuzz founder Phil Trounstine and the aforementioned Kam Kuwata. For more detail, check here.

Photo courtesy of Dave Lesher’s Facebook

Deconstructing the props: BTW, for simplified explanations of the May 19 ballot propositions, you might want to check out the League of Women Voters site here.

We’re Just Sayin’: In Newspaper Death Spiral, Save the Reporting

Thursday, April 2nd, 2009

By Phil Trounstine and Jerry Roberts

Here’s some free financial advice for panicked newspaper owners: If you want to save some real money, stop publishing the news altogether.

Unfortunately, that seems to be the direction that many papers are headed. With papers across the nation contracting, collapsing and folding, and reporters and editors seeking safer ground – the bad news in the industry is going to get worse before it gets even worse.

Simply put, American newspapers are in a death spiral.

A handful of national papers like the New York Times, Wall Street Journal and USA Today will hang on, and so probably will some in the category of small-bore, small-impact community papers. But the once-powerful, once profitable big metro papers – the Los Angeles Times, San Francisco Chronicle and San Jose Mercury News come to mind – which combined both the resources and the motivation to serve as public interest watchdogs on school boards, city halls, cop shops, courts, their state legislators and members of congress, all are in big-time decline.

Metros, scandalously slow off the mark in adapting to new technologies, reacted to economic decline by slashing the amount and quality of local news coverage that was the central value proposition in selling the paper to readers. Faced with plummeting circulation, owners and publishers ensured the downward trend would gain momentum, by cutting back on the very product readers were looking for: journalism .

The result: readers found their local newspaper was not something they had to have in their daily lives. So circulation declined even further, leading newspapers to cut back more, leading to further decline in readership and further cutbacks. That’s the death spiral.

BROKEN BUSINESS MODEL: THE DECLINE OF CLASSIFIEDS

The internet upended the traditional model for newspapers – aggregating a mass audience and selling it to advertisers – by fragmenting the very notion of a mass audience. Instead of one-stop shopping for news, weather, sports and comics in the daily paper, consumers now had an almost infinite number of new sources of specialized and in-depth information about specific subjects of interest to them – along with the power to engage in a conversation with those producing that information.

Dumping most of their resources into hanging on by their fingernails to their old franchises, publishers and owners failed to invest adequately – in bodies or in dollars – in exploring in a big enough way how they could use the new technology to build on their greatest strengths: the expertise and intelligence of their reporting staffs.

Suddenly then, the revenue to cover their vast overhead nut started disappearing. Nowhere was this more dramatic, or more damaging, than in the rapid loss of classified advertising.

Yes, once upon a time, BCL (Before Craig’s List), newspapers sold classified advertising. It was like printing money. Every line was a source of revenue. And significantly, classified advertisers really didn’t care how big the home delivery circulation of the paper was because people looking for a job, home, car or repairman bought the paper because they needed the classifieds.

Today, people looking for any of these things – especially jobs – don’t bother with the newspaper. They go online, usually to a site that has no connection to their local newspaper.

When newspapers could no longer rake in cash from classifieds, they became more heavily dependent on display advertising. And display advertisers – from big national chains like Target to local restaurants and shops – do care about the size of circulation. They might pay $10,000 to place an ad in a large circulation newspaper but only $2,000 to place that ad in a paper with smaller circulation. It’s all about paying for eyeballs.

In order to survive, newspapers needed to focus more sharply on their primary business – local news. People interested in what was happening in Uzbekistan didn’t need the L.A. Times to tell them about it – they could go online and find all and more of the information they sought. What people couldn’t find was what was going on in South Central or West Hollywood. That’s not on the Internet, except when it’s aggregated by sites that pick up the work paid for by local newspapers.

But when classifieds dried up, newspaper managers responded by cutting the one thing crucial to saving their business – those who produced the local news that readers could find nowhere else. Less compelling content (and the rise of the Internet and other channels of information) led to declining circulation, which made newspapers less attractive to other advertisers. Stockholders and owners long used to annual profit margins of 20% saw their dividends shrinking so they demanded further cost savings. And the death spiral deepened.

For some papers — like the San Jose Mercury News, for example — where the business model depended on classified advertising for more than half its revenue — the evaporation of classifieds was a devastating blow to the bottom line. But instead of making itself indispensable to readers by increasing resources for local news, the publisher cut the newsroom budget even further. (See “death spiral” above)
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WHAT IS TO BE DONE?

There are only two ways to stop the spiral. And at this point, it’s not clear either will work.

– Newspapers can invest more resources, not less, in local reporting, leaving every national, international news and sports story to the national papers and wire services. They have to concentrate all of their force and fire power on their own communities, making themselves indispensable to local residents. People need to feel that they have to take the local paper to know what’s going on in their hometown. It’s the only way to maintain and grow circulation.
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– Or, a business like Google or Yahoo, which is expert at online advertising – including personalization at the individual user level – can begin to pay reporters in communities to produce content. We’re talking about covering city councils and school boards, writing about local development and utilities, local sports and arts, etc. This might kill local newspapers, but it might save local reporting.

Why can’t local papers themselves do this? Maybe they can – and the Hearst Corp. is trying in Seattle, where they’ve shuttered the venerable Post-Intelligencer but kept a small staff of local reporters on hand to try to do its job online. Freed from the costs of paper, ink, presses, mail rooms, bundlers, delivery trucks, pressmen, racks and real estate, maybe they can find an online business model that works. But it’s clear that news operations that have to carry all those legacy costs can’t make enough on the Internet to sustain themselves.

Why should we care? Because city councils, school boards, water and sewage boards, police departments and more will have no one looking over their shoulder, rummaging through their waste bins, blowing the whistle on bad behavior or commending admirable work. Because democracy works only when there is an informed citizenry. Because corruption loves a vacuum. Because when you turn on the light switch, the cockroaches run for cover. Because we cannot afford to leave politics and policy in the hands of politicians and policy-makers.

Garamendi Fired By His Political Consultant

Wednesday, April 1st, 2009

Making high-tech history, Silicon Valley political consultant Jude Barry has announced his resignation from John Garamendi’s campaign for governor on his Facebook page.

A class act, Barry wouldn’t go beyond the statement he posted to his FB friends when we reached him Tuesday. But it’s not hard to imagine why he bailed: Eight months into the mission, Garamendi has yet to find campaign co-chairs or, more importantly, finance co-chairs, which suggests his fundraising reports won’t be front page news. He and wife Patty seem set on running a Ma and Pa Kettle operation. And don’t even get us started about trying to get an email answered by the campaign.

Beyond the organizational problems, however, there is simply no clear rationale for a Garamendi candidacy: Dudley Do Right has already run and lost for governor twice — to Tom Bradley in the 1982 Democratic primary and to Kathleen Brown in the 1994 primary; now he’s facing the Three Strikes law for politicians (In an earlier post, we incorrectly reported that Garamendi had also run in the 2003 recall election for governor; calbuzz regrets the error).

“I like John Garamendi and appreciate the opportunity to have worked with him and many other good people on his team, both on the campaign and in the Lieutenant Governor’s office,” Barry said in his Face post on Monday. “But, at this point, I’ve done all I can to help him. I don’t think I can do much more and it doesn’t feel right to just hang around the campaign. I wish John and the campaign good luck.”