JULY 12, 2001

Play It Again, Gary

By Gregory Favre
Poynter Leadership Faculty

Is there no end to the bad news?

Can we talk about anything but layoffs, buyouts, downsizing, stabilizing, arbitrary and non-arbitrary reductions, attrition, voluntary retirements and targeted cuts? About the shrinking recruitment lineage and whether national advertising is up or down, and what has happened to retail?

What about journalism?

Well, a newspaper CEO did just that recently and he did it before an audience of Wall Street analysts. And that's the kind of conversation we need today more than ever from our leaders.

Gary Pruitt, who holds the trifecta of titles-chairman, president and CEO---of my former company, McClatchy. offered the Mid-Year Media Conference a different view than the analysts had been hearing. (Recognizing my bias for the speaker and the subject, I really liked what I heard).

"We are not following the industry's model of across-the-board layoffs and dramatic cutbacks, " Pruitt said.

Instead, he talked about taking advantage of the opportunities imbedded in this downturn, the opportunity to build value through consistency, to grow market share and to cement customer and employee loyalty in ways that will pay off when the economic cycle heads up again.

And he talked about quality journalism, which is something rarely mentioned at these gatherings where news coverage is not seen as a vital component of the conversation.

"Quality journalism is prominent in the corporate DNA of McClatchy," Pruitt said. "One of our guiding principles is that good journalism is good business."

That sounds very much like the things Jack Knight and Lee Hillls and Jim Batten used to say at Knight Ridder. The things Don Graham says about the Washington Post and Arthur Sulzberger Jr, says about the New York Times. And there are others.

But Wall Street needs to hear the message with more frequency so that the analysts and shareholders might eventually get it. If we sell out our future for the present, what have we accomplished?

In a recent American Journalism Review article two newspaper analysts were quoted on the subject of quality journalism.

Lauren Fine, of Merrill Lynch: "Until you can show me your subscribers are willing to pay more money because of the quality, I sort of feel like the average reader isn't that sensitive to the quality at a certain level, and you really do need to make decisions that sometimes seem short term in nature, because you choose to go public, and shareholders really do deserve a return."

William Bird, Salomon Smith Barney: "You have to strike a careful balance between maintaining editorial quality and generating good financial return. In the end, these goals are consistent."

Listen to Pruitt again: "We have great faith in the role our newspapers play as the last mass medium in these vital markets. While other media face fragmentation that dilutes their audiences, our newspapers enjoy widening leads as the primary local media."

And that is true in many markets for many companies.

Newspapers need to develop strong internet sites and create niche products to protect their flanks, but as Pruitt said, in these troubled times readers, more than ever, want the kind of authoritative and comprehensive reporting that good newspapers provide. They want journalism that investigates and explains the complicated issues, journalism that brings them compelling stories.

Pruitt labeled McClatchy's response to the downturn "contrarian" and emphasized that "there is no conflict between such dedication to quality and commitment to shareholder value." Especially when the goal is to grow circulation to better serve the entire community and to help strengthen a business strategy based on a mass media status.

In summarizing McClatchy's presentation, Pruitt, who has been known to quote the Rolling Stones to analysts, left them this time with some lyrics from Bob Dylan:

"Stake my future on a hell of a past Looks like tomorrow is coming fast
Ain't complaining 'bout what I got Seen better times, but who has not?"

Amen.

What do you think?

Coming Monday: Lillian Dunlap Asks- Who's Missing from Your Newsroom?