No Porsche for You: Sacrifice the Short-Term Profit for Long-Term Loyalty and Readership
That sound you just heard was all the Chief Financial Officers clicking furiously to escape this page before they suffer myocardial infarctions. My apologies guys, and don’t forget to take the Lipitor.
One of the great unexplained mysteries of American business is the conventional wisdom, in play since at least the late 70s, that American companies are doomed because they are slaves of Wall Street and the quarterly earning report. However, since it’s been a quarter century since the mourners started keening the death wail for U.S. companies, shouldn’t all these other long-term-view companies have taken over by now? Perhaps this is a question best left to Malcolm Gladwell and his next epic – but how long is long-term? Shouldn’t the short-term thinking companies already have eaten it by now?
The predictable answer is that yeah, and they have. I’ll cop to being another would-be pundit who advances the notion that the key to long-term success has got to be sacrificing the short-term. I’ll spare you the lofty rhetoric about the American culture of instant gratification, video-game fueled short attentions spans and all the rest.
But truly – the media has got to start thinking in the longer term. If you’re reading this, you are well aware that the plunging circulation figures have collided with corporate demands for 20-30% profits and produced a very nasty climate. We’ve all seen the cycle at work – revenues are down, so the newsroom staff has to be cut. Resulting in a thinner, watered-down product, a product the public doesn’t like. So numbers go down even further, budgets have to be cut again, thinner product, rinse, repeat.
Mitchell took the opposite approach. In the 1990s, he noticed that Mexican immigrants were pouring into Marin County, and that even tolerant, politically correct locals were starting to get a little uneasy. So Mitchell cut his own salary to fund an ambitious series of stories about all the other waves of immigration that had washed ashore (in some cases, literally – they were shipwrecked while on their way to somewhere else).
“When the Light in the 1990s decided to cover the five waves of ethic immigration in Point Reyes (and these started mind you back in 1850) – we sent reporters to Chino, Switzerland Croatia, to the Irish Republic, Northern Ireland, to the Azores out in the middle of the Atlantic, twice down to Southern Mexico,” Mitchell said. “All I had to do to decide to do the project was say ‘I’ll cut my salary by $5,000 this year. I won’t get a new used car, but we’ll have done all this.’
“We did this incredible story, we told local people things about their own families that they didn’t even know. The public absolutely loved it.
“We still, ten years later, are getting letters to the editor about this. It was significant. It really told where did the old families come from that made this community, why did they come here, how are their lives different from the relatives who stayed in the old country.”
A conclusion that the Light came to as a result of all the stories was that the current wave of Mexican immigration was no different from any of the preceding waves. The immigrants were facing the same difficult journey there, the same problems assimilating, the same fear and hysteria over a purported “invasion” that would ruin things and ultimately the same slow process of integrating into the community.
The stories delighted the old guard families who had been in the area for generations and then helped bridge the gap between the established and the newer waves of immigrants. The stories brought people together, taught them about each other. They provided a staging ground for people to begin to talk to each other
Mitchell, who jokes that he is the lowest-paid publisher in California, said that he started out with a salary that was right in the median for West Marin (about $50,000 per year), and started cutting it so he could continue pursuing stories aggressively.
“It’s real easy to make those decisions when you don’t have to answer to stockholders,” Mitchell said. “That’s the advantage that small papers like the Point Reyes Light have over the big ones – we don’t have shareholders or stockholders that we have to answer to.
“Stockholders are a real curse for some organizations, and it’s not so much that they stand up and scream at stockholder meetings, but they’ve been promised things. Suddenly management feels an obligation to meet the promise. It’s why these mom-and-pop newspapers don’t get into those troubles.
Look how many large corporations have been in the news recently because they’re going bankrupt. And yet, the top officers of the corporation got a bonus that year, even while the company was in desperate shape.”
According to a New York Times article about the recent resignation of Los Angeles Times editor John Carroll, the Tribune Company had demanded that Carroll make cuts that amount to a “national tragedy.” This, despite $130 million in cuts in recent years.
Carroll has tried to remain polite about his former employers, but he has been publicly musing about whether or not corporations will be able to put out decent newspapers.
“The returns aren't in, but it's not looking good.” Carroll said in the Times. “Newspaper-owning corporations – and I mean all of them, not just my own employer – have an unwritten pact with Wall Street that requires unsustainably high profit levels.
“Each year, newspapers shed reporters, editors, photographers, designers and newshole. Each year, readers get less. Each year many of those readers turn elsewhere for their news. Professor Phil Meyer has plotted our oblivion, which, as I recall, comes in less than two generations. As I say, we are on an unsustainable course. The old family-owned papers had their flaws, but at least the owners tried to preserve them for their children and grandchildren.”
In his book, The Vanishing Newspaper – Saving Journalism in the Information Age, the aforementioned Prof. Meyer says that newspapers don’t sell news. Instead, he holds that what they have to offer is influence, and that if they focus on this, they will survive.
Unfortunately, the bean-counters aren’t buying this – yet. BusinessWeek pointed out in an article entitled “The Truth vs. The Dollar” that decisions that make journalists cringe – like Time’s decision to turn over Matthew Cooper’s notes – are in the best interests of the corporations.
“The deeply dispiriting realization – at least for a journalist – is how hard it is to overcome these arguments and yoke economic value to the social value of good investigative journalism,” Jon Fine wrote. “What wins Pulitzers and the envy of peers does not necessarily drive huge sales or increase franchise value.”
Fine argues that the reason the New York Times beats the Post in circulation has to do with “market position” rather than journalistic integrity – perhaps ignoring the fact that hard-hitting, quality journalism is what has created and maintained that position.
Still, Fine is correct in that in our ever-more-litigious society, where groups like Scientology can file suit, and even if they lose, cost news organizations $10 million or so in legal fees, the risk of good investigative journalism can be frightening.
Next: The Fundamental Disconnect and Contempt for the Audience (Hint: They’re Starting to Catch On)
Love hurts – When Mitchell wanted to cover a story and the paper didn’t have the money, he just cut his own salary.
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Stockholders are a curse – One big advantage that mom-and-pop operations have is that they don’t have to answer to stockholders.
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The line from Gutenberg to bloggers – When the Light won the Pulitzer in ’79, pundits said it was part of a technological revolution, because the cost of getting your message out and competing with the MSM had dropped so much. If they had only known what was in store.
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