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Newspaper death watch: John Paton’s latest dispatch

Friday, June 21, 2013

John Paton, consejero delegado de Digital First MediaThe man at the helm of the alphabet soup of entities that locally includes the Mercury News and its various Bay Area “editions” (CoCo Times, Oakland Trib, Marin IJ, etc.) says that his Digital First Media will roll out a profit-sharing plan for all employees in a few weeks. And that it won’t be for senior executives because “they’re well paid and it’s enough already.”

Sounds nice until you consider what else the CEO tells PaidContent—that despite efforts to economize amid the transition from print to digital there may not be any newspaper profits to share in five years. Key excerpts (after the jump):

In more concrete terms, the Digital First CEO said that while his company and others have had some success in growing their digital-advertising revenue — it was up almost 90 percent last year at Digital First, he said, compared with 2009 — the continuing free-fall in print-advertising revenue is still overwhelming any of that growth, as well as the gains from cost-cutting and other financial restructuring.

The result, said Paton, is that if newspaper chains like his and McClatchy and Lee Enterprises continue to have the kind of “success” that they have had so far in making the digital transition, profits will decline by a further 40 percent or so over the next three years — and even that forecast assumes the decline in print advertising and other factors don’t accelerate during that period. In effect, every $1 of profit today will become 56 cents of loss in five years, if current trends continue.

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