Newsies lamenting the destructive effect of rounds of buyouts and layoffs on editorial quality may have found a similar viewpoint in an unexpected place -- Wall Street.
During A.H. Belo's earnings call yesterday, Goldman Sachs analyst Peter Appert said he had an "impossible question" he felt compelled to ask CEO Robert Decherd: "How do you maintain editorial relevance and quality as you are doing such dramatic cuts in staff?"
Decherd had just announced that the company will eliminate 500 more positions at the Dallas Morning News and its other papers. Decherd replied that while "some products and sections are going to have to be fairly substantially re-geared," the right mix of material will keep "our products more than relevant, actually essential to the local news and information needs of our communities."
"We have managed this process, I think, pretty ably over the last several years, and we will still have a very large news-gathering capability, at the Dallas Morning News especially."
In answer to a follow-up question from Appert, Decherd said he did not know exactly how much of the staff reduction would be in editorial. He said he did expect the Dallas news department would still have 300 professionals with about 200 each in Providence and Riverside, Cal.
A.H. Belo, which was spun off as a separate newspaper-only company earlier this year,
had revenue declines of 15 percent in the second quarter compared to the period a year ago. Its earnings before deprecation and amortization were $10 million (a margin of 12 percent), about a third what they were a year ago. Including depreciation and amortization, the company was in the red.
Belo has no debt and has announced plans in June for start-up of a condensed daily paper to be delivered free Wednesday through Saturday to 200,000 non-subscribers.
Like other newspaper CEOs reporting second quarter results, Decherd said he saw no particular prospect that revenue losses would slow in the third quarter. The company's stock dipped below $5 a share late yesterday morning.
You can't cut your way to profit, and the real...
