Bay Area News Group—the Digital First Media chain that includes the Mercury News and several South Bay community newspapers—went through yet another downsizing this week. More than two-dozen journalists and support staff lost their jobs on Thursday as part of the company’s push to maintain profits with little regard for the product, the people who make it or the customers who consume it.
The layoffs come little more than a week after at least 27 BANG employees with a combined five centuries of experience took buyouts. Their union, the Pacific Media Workers Guild, called the cuts part of a strategy by Alden Global Capital—the so-called vulture fund that owns Digital First—to maximize profits with minimal investment.
BANG Executive Editor Neil Chase said the company anticipated the layoffs and warned people they would be necessary even after the buyouts.
“These are the layoffs we told everyone would be coming shortly after the buyouts.
“One person tweeted incorrectly about the scope of them. We did not lose the entire staff of any publication; our community weeklies lost some staffers, as did our dailies, but we’re still covering the same area and publishing the same papers.
“Unfortunately, there’s not much more I can say about it.”
Meanwhile, in an email to staff on Thursday, Chase tried to downplay the bloodletting, chalking it up to a collective lack of “progress” that led to declining revenue.
“I said after the buyouts that we still had difficult changes to make. The people whose positions are being eliminated were notified today. We are, once again, losing some tremendously talented and valuable colleagues. We thank them and wish them well, and we’re doing what we can to make their difficult transitions a tiny bit easier.
“Don’t waste time trying to blame our owners or the Internet or Facebook or whoever. This happened because I, and we, have not yet made enough progress on our crucial new revenue streams. It's our problem to solve. Nobody can predict the future or promise that we will or will not have more cuts.
“But we can sure as hell double down on what we know we need to do, with new ways to deliver more of the impactful, meaningful journalism our communities want and need and will support. That starts next week. For now, show some love for those who are leaving and start thinking about how we move past this difficult time together.”
That seems to contradict what former Digital First CEO Steve Rossi told employees in a company-wide message last summer, when he thanked them for successfully achieving revenue goals and keeping the organization “solidly profitable.” Below is a copy of the July 20, 2017 email.
“As we begin a new fiscal year, I wanted to update you on our progress.
“We accomplished much over the past year starting with audience growth driven by our newsrooms’ commitment to digital first. Our Outlook 2020 plan which was developed well over a year ago by key digital leaders, and our Content That Connects plan developed by leaders of our content teams both yielded strong results and positive response from our users. In addition, implementation of our new content management system and site re-designs, are well underway, performing beyond expectations. And, of course, a highlight of the year was the Pulitzer Prize awarded to the East Bay Times, marking the sixth Pulitzer awarded to the company in eight years.
“The company's performance in advertising revenue has been significantly better than that of our publicly traded industry peers over the past couple of years. As you may remember, we established that as a key goal two years ago, and our revenue teams have met the challenge. Our growth in digital revenue continues in the top tier of industry peers, and our Adtaxi digital agency business is an undisputed success, realizing substantial growth and strong customer acceptance.
“One of the biggest recent changes for the company was the addition of the Orange County Register and the Riverside Press Enterprise, which just completed their first full year as part of our organization. The integration of these enterprises into our company was exceptional, and we added significant new talent and strong markets.
“As a company, we successfully achieved our goals for fiscal 2017. While this keeps us solidly profitable, we still have much to accomplish toward building a strong and sustainable business. As I am sure you know, the challenges facing our industry persist. Print advertising revenue for the industry is declining at double digit percentages. The bricks and mortar retail sector of the economy remains challenged by new business models. We have weathered these headwinds well by innovating new revenue streams, revamping processes, and instituting creative approaches to managing expenses. We are constantly seeking the most efficient methods of doing business, while reducing costs as much as possible in areas which have the least impact on readers and advertisers. This allows us to maintain the viability of our legacy newspaper brands while investing in new offerings and diversified revenue streams. Going forward those new offerings must include an aggressive push to monetize our content, and we need your ideas and contributions toward that objective.
“Our management team created an aggressive but achievable plan for 2018 which was recently approved by our Board of Directors and includes substantial investments in our future including the Salesforce.com customer relationship platform for our digital teams and a multi-million dollar upgrade in one of our printing plants. There are also several new revenue and content initiatives in the playbook for the year ahead. It is these initiatives which have allowed us to outperform the industry. As part of that plan, we will evaluate the possibility of merit salary increases beginning early next calendar year provided that we are on track with financial and other targets, and provided that the local economic conditions, local compensation practices and local performance can support such increases. Over the past few years we’ve had a great track record awarding these planned increases by achieving results (as you may recall, following fiscal year 2015, profit sharing was paid, and during fiscal 2016 and 2017 salary increases were effected). Let’s keep the run going.
“While yes, we do face many challenges, we are also well positioned for future success.
“Our company is fortunate to have a deeply talented and dedicated team committed to building a strong and sustainable business that will allow us to continue fulfilling our mission and serving our communities for years to come.”
The Merc used to be one of the largest daily newspapers in the industry with upward of 400 reporters and editors, according to the Media Guild. After the latest round of buyouts and layoffs, the number of union-represented newsroom staff in the South Bay is down to 41. The East Bay papers are left with 65.
Among the casualties are Milpitas Post editor Ian Bauer and reporters Julia Baum and Victoria Kezra, who covered Willow Glen and Sunnyvale, respectively.
That leaves BANG with no K-12 reporter, no higher education reporter, no health reporter and no one covering Santa Clara County government. It also significantly limits coverage at San Jose’s City Hall and entirely eliminates coverage in some of the region’s smaller neighboring cities, including Sunnyvale, Cupertino, Campbell and San Jose’s Rose Garden, Almaden, Cambrian and Willow Glen neighborhoods.
We're not gone for good! Just finding new avenues for reporting. With the leash off, I now can really show the people what I'm capable of doing https://t.co/zsWYA114Y7
— Julia Baum (@jbaum_news) February 9, 2018
Union officials say Digital First cutbacks have far exceeded those at other news organizations and have less to do with the industry’s revenue trends than Alden’s brutal investment tactics. In a recent blog post, the union announced plans to join a nationwide campaign with a dozen Digital First-run newspapers to pressure Alden Capital to either invest in quality or sell to someone who will.
“We have tough fights on our hands just about everywhere,” Guild CEO Carl Hall was quoted as saying in the blog post. “Still, Alden Global and DFM are hands-down champions of the slash-and-burn approach. It’s amazing that staffs at those properties manage to keep their focus and still do great work, and I give credit to the newsroom managers, too, for their determination to fight for quality of journalism as best they can despite the hostile ownership.”
The carnage at the Mercury News and East Bay Times stands around 40-45 journalists, maybe more.
That is about one-third of editorial employees, according to a recent count of 150 from a top editor.
Apollo Global Capital is sucking these community institutions dry.
— Jeremy C. Owens (@jowens510) February 9, 2018
San Jose Inside/Metro Silicon Valley intern Stephen Perez contributed to this report.