Internet, business model put Register at risk of insolvency
At $0.75, a copy of The New Haven Register now costs more than the common share price of its parent corporation, the Journal Register Company, which dropped to $0.22 on Monday.
The Journal Register is in trouble because of a number of factors, including in part a flagging economy and a newspaper industry become increasingly centered in the Internet, that are adversely affecting papers across the country. But the severe financial woes — the Associated Press reported Monday that the company is considering a sale, and the New York Stock Exchange has threatened to delist it if its...
If the Register folds, its owners and editors will be chiefly to blame. Over the years, it has offered less and less locally-originated content. Its website is one of the worst of any American newspaper. Its on-line archive is unusable. Why should New Haveners support such a shabby excuse for a newspaper.
We are far better served by the New Haven Independent and the YDN!
Peter Dobkin Hall
hall@sachem.org
The Register's strategy is like this:
Suppose Ford Motors had decided, given its falling profits, simply to cut the quality of its cars, over and over, thus making more profit from a given number of car sales. Fallacy: the "given number" keeps declining, setting off a vicious circle that can end only one way.
I write as someone who receives the Register free on weekdays, I guess to pump up the demographic of their claimed subscriber base. I pay for Sunday, but if it weren't free I wouldn't get it every day--you can practically see through it; or you can actually see through it, depending on the sense of that expression.
The michigan investment was the proximate cause, but overall, the JRC's failings were from birth - Jelenic and top execs milked the IPO years ago, pocketing millions. It comes down to why you own a paper. Some who want profit want news too, others, don't care if they are selling news or widgets. JRC has always been the latter.
JRC is below investment grade, on the verge of delisting at NYSE and is quite obviously for sale - that's why they contacted Lazard Freres -- to sell. As far as debt, the co is in to JPmorgan for over $600 m. (Unlike Zell at Tribune who is way leveraged out)
It will sell off in pieces - no one will buy the whole co. The connecticut piece/or the register is probably worth $200m and they will be lucky to get that considering the news companies on the auction block these days.
I think editoral staff should start to face that - the paper is for sale.
Also, the company will do whatever it takes to make it attractive to buyers - that means cuts.
Aside from potential interest by Gannett or other large national co's, possibilities for JRC's local papers could include interest by current exectives in buying it and interest by a couple Connecticut-based media companies.
Likely MediaNews can't buy because it owns the Connecticut Post, which is a large paper -- antitrust rules.
Insider shareholders such as jelenic don't need a top selling price as they made their money already. He probably couldn't care less about this company. Other shareholders are going to try to get the best deal, but with the possibility of bankruptcy hanging over them.
I have always put JRC in a category of its own as a pioneer of bad newspapering. It was ahead of the curve in every way we see the editorial/profit struggle being played out nationwide. Jelenic always made Dean Singleton look like a kittycat.
Before we learn a the next cookie-cutter profiteer has made a deal to buy the Register, lets take a moment to celebrate the death of this wicked newspaper and express hope that it rises from its ashes with a great new owner.
First of all the jounal register (ct)can't even get there paper out on time..Always late..Adifferant time every day always a problem..Carriers have to be at work so when there late the service goes right out the window...We the carriers are not going to be late for work because some moron don't know how to do there job!!!!!!!!!!!!!!!!!!!!
The problems at this company have very little to do with the Internet or changing times.
Management has been an war with its customers, employees, readers and product for more than ten years. In the end the fundamentals of business won out.
The former CEO unfortunately has cancer, but he and a few executives did profit handsomely during the time they dismantled the company.
This was not a mystery virtually everyone in the newspaper industry understood this strategy and JP Morgan very much deserves the loss and aggravation they are going to get.
The remaining issue when you dismantle a monopoly to this extent can it resurrected in any meaningful form.
Circulation has dropped from 100,000 to 75,000 and that's with lots of baloney thrown in. Circulation growth is one of the biggest cost drivers in a daily newspaper operation. Considering ongoing attrition the real number will likely be 65,000 or so before long.
The existing level can't support the advertising costs needed to fund operations as we would expect from a city daily.
Maybe some rich Yale Alumni will want it, they can rename it the Doodle Two.