Peoria Pundit

Via the St. Louis Post Dispatch:

The Post-Dispatch’s parent company, Lee Enterprises, said Wednesday that it has received a warning from the New York Stock Exchange that the company may be delisted if stock performance does not improve.

Shares of Lee closed at $0.41 Wednesday and have been below $1 since Nov. 26. The Davenport, Iowa-based publisher has six months to get back above $1 before the NYSE takes further action, and must tell the exchange its plans to do so within 10 days.

Lee Enterprises also owns the Bloomington Pantagraph. GateHouse Media, owner of the Peoria Journal Star and most other daily and weekly newspapers in the Peoria area, was delisted months ago. Its stock price is now hovering around 4 cents a share.

GateHouse media is an easy target for criticism these days. God knows I’ve criticized them for their cheapskate approach to news. Their stock price is in the crapper. They’re suing the New York Times over a linking policy, which has made them the target of allegedly forward thinking New Media advocates.

But while the elite snicker, GateHouse has quietly been at the forefront of the inevitable next step in the mainstream media: Evolving into an online only model of providing news. There are dozens if not hundreds of Websites out there that purport to be news sources. But there are relatively few online only organizations actually have a staff of reporters, editors and photographers who seek to do what daily newspapers do: Provide meat-and-potatoes journalism for a community. GateHouse started The Batavian several months ago to do just that. This online news organization is competing against a traditional newspaper without a Web presense.

And now GateHouse had taken the next step: Moving from print to online. The Kansas City Kansan, owned by the GateHouse, will end its 87-year history as a print newspaper and go entirely digital on January 10:

Without the cumbersome tasks of page design and layout, and other duties associated with print, the online staff will be free to find more and varied stories to post online. Without press deadlines to contend with, the staff will be able to keep up a continual flow of news every day, publishing breaking news and information as it comes in.

“The approach we’re taking with the new Kansan site is a proven method for making news more interesting and engaging online,” said Howard Owens, director of digital publishing for GateHouse Media, the parent company of the Kansan. “We’ve found that readers really enjoy this format and will visit the site more frequently because of it.”

The Kansan staff is being reduced from eight people to four as a cost savings measure during the transition.

Owens will work closely with the staff over the coming months to help with the transition to an online-only approach to news. He said the new site should quickly see its audience double within months of the switch.

Naturally, commenters are complaining about losing the Kansan. Some people will be unable to grasp the idea of a newspaper that doesn’t double as birdcage liner. There are fewer and fewer of these people every day, and more and more people who expect to get their news online. More importantly, there are more and more business willing to pay to advertise online.

I’ve said it before and I’ll say it again: The value of a newsppaer isn’t the paper it’s printed on, it’s the news that is printed on the paper. The computer is making newsprint and ink increasingly irrelevant to the news business, much like the automobile made horse and buggy irrlevant in the transportation business. Online is just incredibly less costly that print. It delivers news almost immediately after it is gathered. The news you read with your morning coffee was written 12 hours earlier.

Folks, people who need to know what is going on in their communities will turn to the online news organizations to get their local news. People who say today they love the feel of a fresh newspaper and the smell of fresh ink will go out and buy a laptop. You can get one for less than the cost of the smallest flat-screen television. And in the end, the biggest critics will be the biggest fans because it will be more complete and easier to use.

Eventually, there will not be any newspapers. They will either die or evolve into online only. And to the consternation of many, it is a GateHouse Media publication that is among the first to raise from the primordial ooze onto dry land.

Meanwhile, the elite New York Times contents itself with establishing online news portals built entirely other companies’ headlines.

UPDATE: Jeff Jarvis — one of the critics of GateHouse’s suit against the NYT — provides the snark:

I would say this is a forward-thinking act of innovation, except it comes from link-hating Gatehouse, whose stock is stuck at $0.04 and so it could be an act of desperation; I don’t know which. This is a paper that earlier sold its building, shifted its printing, and cut back from daily to twice-weekly in print.

Would Jarvis prefer that the Kansan go out of business entirely by trying to continue to pay for printing on dead trees? Apparently so. And by moving online, the Kansan has gone from twice weekly to 24/7, which is a step UP from daily.

I’m beginning to wonder if Jarvis has the intellectual capacity to grasp that what the NYT is doing isn’t the same as ordinary deep linking, but is essentially using a competitor’s intellectual property to take away their advertisers. It’s not fair comment, which is what allows people like Jarvis and myself to link to and comment on other people’s work. 

That’s a huge increase, except when the starting price is  per share. Via Turner Report.

The company’s stock price improved 1 1/2 cents to 4.5 cents per share today, trading on the Pink Sheets.

For the newbies in our audience, GateHouse Media owns the Peoria Journal Star and most daily and weekly newspapers in West Central Illinois.

A source at the Peoria Journal Star tells me that reporters Frank Radosevich II and Erinn Deshinsky are going to be leaving the paper. No word on their future plans.

Radosevich II, who covers East Peoria and the health/medical beat, leaves in January. Deshinsky is the nighttime police reporter and is gone next week.
 
And there’s no word on from GateHouse on whether they will replace one, both or neither of them. 

My two cents: I wouldn’t count on GateHouse replacing any. I hear that the entire company went into recession mode several months ago, and they weren’t keen on replacing personnel to begin with.

My source says morale is low, but there’s still a core of dedicated journalists who strive to keep the public informed. But anyone who thinks Peoria’s only daily newspaper of record can keep shedding front-line Journalists without suffering from a loss of quality is fooling themselves.

Unless you’ve worked as a reporter, you really don’t realize how much time and effort it takes to produce a good newspaper. That means there needs to be enough reporters on hand to do enterprise reporting AND to make that second, third or fourth phone call, or better yet, to do the interview in person.

I’m guessing the Journal Star has enough reporters to fill the newshole. But as long as there’s wire copy and press releases that can be usec instead of original reporting, the powers-that-be will keep trying to discover what that minimum number of reporters really is.

Blogs are constantly being accused of getting all their content from mainstream media. Unless the blogger is doing original reporting, there’s some truth to that. Pundit-style bloggers do get most of their information from media reports. Some of ‘em even cut and paste parts of the articles they use as source material. I’m one of them.

But that’s OK. It’s called “fair use.” If people are going to comment on news, they have to be able to tell people what they are commenting on. So, the law allows me to reprint paragraphs from Journal Star articles. I don’t reprint ALL of the article. And I don’t replicate links to all their stuff, and a rarely link to headlines without comment.

This practice helps news sites bring in new readers.

But GateHouse Media — corporate owner of the Journal Star — is facing competition from a bigger “Big Media” company, the Boston Globe. And the bigger company is threatening to use the smaller company’s own words against it:

According to reports, Boston.com plans to launch a line of town-specific sites that will cull content from sources like Boston Daily favorites the Cambridge Chronicle and the Allston-Brighton TAB, which are owned by GateHouse Media.

It’s one thing to occasionally link to a particular news outlet’s stuff. It’s another thing to scrape its site, place the content on a hyperlocal Website, sell ads and pass it off as your own.

But I wouldn’t place bets that GateHouse is gonna take sit back and take it. Look for GateHouse to protect its local information franchise.

If this is what the Boston Globe is going to do, it’s much different than what Google News is doing, which is spidering news organizations and providing the results of searches.

Via Editor & Publisher:

CHICAGO GateHouse Media Inc. stock will be de-listed by the New York Stock Exchange before the market opens this Friday, the exchange’s regulatory arm announced.

The beleagured community newspaper publisher had submitted a plan for getting back into compliance for listing — but NYSE Regulation Inc. said it decided not to give the plan a chance.

“NYSE Regulation also determined that the ‘abnormally low’ price of the stock makes it appropriate to suspend the company’s common stock at this time rather than provide the company an opportunity to cure its non-compliance with the NYSE’s quantitative requirements,” the regulator said in its announcement.

And this guy got out just in time:

CHICAGO San Francisco investor Jeffrey G. Edwards, who had been the second-biggest single stakeholder in GateHouse Media Inc., disclosed Tuesday that he has sold off virtually all his holdings in the community newspaper publisher.

Through JGE Capital Management LLC and East Peak Partners LLC, Edwards had controlled 6,466,600 shares of stock, or 11.1% of outstanding shares, according to GateHouse’s 2008 annual proxy. That stake was surpassed only by GateHouse’s principal owner, Fortress Investment Holdings LLC, which owned 41.9%, according to the proxy.

Welcome to the club:

By a vote of 24 to 7, the 35 person unit of the Pekin Times in Pekin, Illinois, have chosen the St. Louis Newspaper Guild as their bargaining representative.

Folks at the Peoria Journal Star were worried that GateHouse Media would go after the union. Perhaps the company too busy surviving their own poor business plan to right off a union. Methinks the fine folks at TimesNewspapers ought to consider doing the same thing.

Via the Turner Report:

GateHouse Media stock fell to an all-time low of 39 cents per share at the close of trading today [Tuesday]. The previous low was 40 cents.

The price was down 19 cents or 32.76 percent from Monday.

I’m sure much of this is due to the all-around crappy condition of the stock market these days. Later tonight, I’ll post today’s closing price.

GateHouse owns the Peoria Journal Star, Pekin Daily Times, TimesNewspapers and many other daily and weekly newspapers in this part of the state.

UPDATE: GateHouse closed at 33 cents per share. But again, the entire Dow closed 445 points down.

Via Editor & Publisher: The employee-owned Omaha World-Herald Co. bought two daily newspapers from GateHouse Media: The Grand Island Independent (20,500 circulation) and the York News-Times (4,700). GateHouse has owned the newspapers only since last fall when it bought 14 dailies from Morris Communication Co.

GateHouse owns the Peoria Journal Star, the Pekin Daily Times, the TimesNewspapers chain of weekly papers and many others in West Central Illinois. All these papers have faced reduction in staff as GateHouse moved to cut costs to help pay higher than normal dividends.

Mike Reed, Chief Executive Officer of GateHouse Media, commented in a statement, “While we are constantly evaluating investment opportunities in the local media sector and continue to have a very strong pipeline of future opportunities, we did not see the Grand Island operation as a good strategic or geographic fit and felt we could redeploy the capital more effectively elsewhere. I am delighted to announce the sale of these publications to the Omaha World-Herald Company which has a significant and venerable presence in Nebraska.”

GateHouse Media has been threatened with delisting from the New York Stock exchange if it doesn’t come up with a plan to get it’s stock price consistently above $1 per share. A respected analyst told me recently that if GateHouse ends up declaring bankruptcy, that purchase by a local philanthropist would be the Journal Star’s best option.

Editor’s note: Frequent commenter Bookwoom left the following comment on another post. I thought it important enough for a post. I’m reprinting the whole thing, but I’m embedding the links.

Speaking of media issues, not sure this belongs here, but there have been some new developments on the GateHouse Media death watch beat in the past week (surprised you haven’t been following them, Billy):

1. The GateHouse-owned Rockford Register Star laid off 13 people on Aug. 18, including Springfield bureau chief Aaron Chambers. The news was announced via a rather callously worded story in which the managing editor quoted herself but never named any of the people who were laid off, or bothered to mention what jobs most of them had. The story is here.

For more thoughtful commentary on this and other manifestations of GateHouse’s “hyper local failure,” visit here.

2. Gatehouse CFO Mark Thompson announced his resignation on Friday for “personal reasons.” Taking his place as interim financial officer is Mark Maring, who joined the company just 6 months ago, and also serves as vice president of investor relations and strategic development. I found a story about this posted on the Business Week website but the link was too long to post here.

[I found it.]

3. The NYSE notified Gatehouse on Friday that it has 10 days to submit a plan for “correcting” its financial “deficiencies” or it will be officially booted off the Big Board. You can read the text of the notice here.