Area newspapers, particularly the Providence Journal, already reeling from declining advertising in a down economy, are feeling the impact of the severe downsizing by two of the area’s giant retailers – Apex and Ann & Hope.
Sources inside the Journal suggest the two retailers had placed as much as $3.5 million combined in advertisements at the Providence Journal alone. Ann & Hope officials estimated they were spending closer to $1 million annually at the Journal. Apex officials would not comment. While the numbers were considerably less at other papers, they too were feeling the impact of the lost retail advertising.
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Some of those losses have obviously been made up by the entry into the marketplace of some new retailers, including Target, Providence Place, and Wal-Mart.
Journal insiders suggest the actual size of the paper has been reduced, some editorial trips canceled, and sections combined, all in efforts to save money. At the other papers, while insiders provided few specifics, it was clear that some cost saving measures were either being enacted or considered.
Insiders at the Journal also said that advertising sales were so weak in the first quarter that management has decided to discount altogether first quarter sales figures in determining sales representatives’ annual incentives, fearing that if they were included no one could possibly make the goal for the year.
Ray Marcano, national president of The Society of Professional Journalists, and assistant manager for production at the Dayton Daily News in Ohio said the problem is not unique to Rhode Island.
“I think it’s clear that newspapers across the country are suffering from a combination of declining ad revenues, and increasing newsprint costs and it has resulted in having to do what any business would do, which is cut costs,” he said.
In this market, both Apex and Ann & Hope had long been substantial advertisers in daily newspapers, and their announcement a few months ago that they would close stores, and severely downsize operations added to the advertising woes of the newspapers.
Belo Corporation, the Dallas-based company that owns the Journal, along with three other daily newspapers and 17 television stations, was feeling the impact of declining advertising dollars. For the first quarter of this fiscal year, Belo, a public company, reported a net income of $623,000, compared to $15.4 million in the same period last year. Belo officials blamed the advertising market.
“There’s no question there’s a soft advertising environment out there,” said Belo’s Vice President of Investor Relations Carey Hendrickson. “It’s going to hurt of course.”
The most recent monthly revenue and statistical report for the company found that total full-run advertising lineage, which includes reprints and supplements, decreased 16.5 percent at the Providence Journal, while full-run run of press was down 15.8 percent. General, retail and classified volumes decreased 20.4 percent, 17 percent and 11.8 percent, respectively.
To put the Journal numbers in perspective, Belo’s flagship the Dallas Morning News reported full-run advertising lineage down 6.5 percent; general, retail, and classified down respectively 16.4 percent, 1.4 percent and 9.9 percent; and full run of press up 3 percent.
Several Journal executives refused to comment. They included Mark Ryan, vice president of legal and administration; Joel Stark, senior vice president for marketing sales; and Joel Rawson, vice president and executive editor.
However, some reporters and columnists were willing to talk, possibly sparked by a long-time contract dispute between Belo and the Providence Newspaper Guild, which represents reporters, other newsroom personnel, advertising sales representatives and clerical employees.
Brian C. Jones, a long-time Journal reporter, said the company has made a series of semi-invisible moves such as shrinking the size of the paper, which the Journal itself announced several months ago and which is a national trend. The
Journal, in its article announcing the change, said it was doing it to improve the paper’s appearance.
“This is just a straight-forward money saving move,” said Jones, a member of the Guild’s executive board. “It’s kind of disingenuous to say it that way.”
Jones also said that certain news sections are condensing, apparently because of the rising cost of newsprint. The weekly Food section now has been included in Lifebeat. The Monday Local and State sections have been compressed into one, and the paper no longer runs stock market tables on Saturdays.
Columnist Mark Patinkin spoke about the consolidation of certain sections.
“Some people point to lack of journalistic commitment here, and I’m not sure I’d go that far,” he said, “but I think it definitely is the result of a financial pinch.”
“I would hope in the future we would be able to restore some of the separate sections,” he said. “I don’t think anybody at the top of the chain is happy about that. It’s a tough time right now. We’ve lost advertising and national papers everywhere have been hit pretty hard.”
Some insiders have also reported that the Journal has cut back on trips for some of its reporters.
Felice Freyer, a Journal reporter, said “there’s been a number of directives here, and one that affected me was a ban on travel for training.” Freyer wanted to go to the Association of Health Care Journalists’ Convention in Atlanta, but was told by an editor that there was an edict prohibiting travel for professional training.
Columnist Bob Kerr suggests that the atmosphere at the paper has suffered both because of the union problems and a tighter budget.
“Morale in the newsroom stinks,” said Kerr.
Jon Duffy, whose company Duffy & Shanley does advertising for the Journal, said the numbers seem a lot worse because last year’s numbers were so good.
“Unfortunately marketing and advertising budgets are on the first line that gets hit in budget cuts,” he said. “It’s just a fact of American business that the people affected are agencies and media companies. And last year was so good that we’re really up against some tough numbers from a year ago.”
Michael Carvalho, ad director for the Woonsocket Call said Apex’s struggle hardly touched his paper at all, but the loss of Ann & Hope cost the paper around $55,000 in annual revenue.
“The one that did impact us was Ann & Hope,” he said, “and it wasn’t a major impact, but any impact in this economy should not be taken lightly.”
“It’s business as usual,” said Carvalho. “When you lose business it’s tough in this economy to offset that loss, but there’s always something new opening up to pick up the slack.”
Carvalho suspected The Times in Pawtucket took more of a hit, since both Apex and Ann & Hope advertised with the paper.
Paul Palange, publisher of The Times refused to comment. Michael d’Vorian, vice president and general merchandise manager of Apex would not discuss the financial dealings of any of the papers with which Apex had accounts.
Doug Palmacci, former ad director for Ann & Hope, however, estimated the Journal’s loss was the most costly blow of all area newspapers, and estimated it to be about $1 million a year.
“A million dollars in business is still a lot of business,” he said, “I just think it’s unfortunate that a local institution has gone away.”
