Monday, May 08, 2006

L.A. Times Executives Examine The Paper's Circulation Losses

It's my understanding that at a weekend retreat in Palm Springs of L.A. Times masthead editors, Leo Wolinsky, one of the paper's two managing editors, gave a presentation on the whys and wherefores of the depressing Times losses of circulation since the Tribune Co. bought the paper in 2000.

Wolinsky prepared graphs showing circulation from the time Otis Chandler became publisher in 1961, an event which ushered in a period of steadily improving circulation, to the squalid record of the last six years, which circulation has dropped roughly a quarter from the level of close to 1.1 million at the time of the sale, and ouster of Times-Mirror CEO Mark Willes.

Willes had foolishly set a goal of doubling Times circulation to two million. However, within months of taking over as CEO, he admitted that just keeping circulation about where it was, a little over a million, was a struggle. The paper, he said, suffered from a churning of circulation resulting from readers who cancelled their subscriptions when they went on vacation and then did not renew them. Nevertheless, Willes never abandoned his efforts to increase circulation.

Now, however, some Times executives express fear that when the next report comes out in September, Times daily circulation could drop to the 750,000 level.

Some of the reasons for this are clear. Aside from declining circulation at most of America's big newspapers, demographic trends in Los Angeles, where the Anglo population is an ever-decreasing percentage of the whole, have worked against the newspaper. Willes' efforts to build circulation in Hispanic neighborhoods by entering into a deal with the Spanish language paper, La Opinion, were scuttled by the Tribune. which terminated the deal. Also, it reacted against reports that Willes had bloated circulation by counting some distribution that was not paid for.

But it was reportedly also made clear in Wolinsky's report that the Tribune management itself was willing to abandon considerable circulation by constricting the areas in which the Times is delivered. This was done to keep newspaper production costs down, but it has led to what sometimes seems to be an irreversible downward spiral.

Also, the paper's promotional budget, as set by Chicago, has been woeful. There was no promotion budget at all for three years, and, even now, when there is a small one, it is devoted mainly to trying to keep advertising despite the circulation losses.

The Times is being treated as a poor stepchild by the Tribune executives, who, for instance, don't even have a fully present general manager for the paper. He comes to L.A. three days a week, but he lives in Chicago.

These facts are a recipe for disaster. Circulation is a struggle, anyway, in the days of the Internet, but when efforts to keep it up are lagging, as they have under Tribune control, it becomes a catastrophe.

It does not help either that, while there are efforts being made to buy the paper from the Tribune, and restore it to local control under owners willing to accept a smaller profit margin and spend more on the paper's quality, the Tribune CEO, Dennis FitzSimons is resisting such a sale.

Since FitzSimons, through his leadership of the Tribune Foundation, controls 14% of the company's stock, he is in a strong position to resist a sale or a hostile takeover, despite the fact that Tribune's stock price has fallen dramatically.

In short, in the Wolinsky report to executives over the weekend, there seemed to be few rays of hope. The Times is languishing like Cinderella did before the arrival of the prince.

I have a friend who believes a newspaper like the Times may be doomed to become much smaller because the newspaper industry has not embraced technological change. While she may have a point, the fact is that without diligent and well-financed efforts to maintain circulation, through advertising and by increasing the delivery areas, it will sink ever further.

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