I Have GOT To Get Out Of This Business, Part X

I've highlighted the thing about irony in the middle.

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Newspapers, reeling from slumping ads, slash jobs

By SETH SUTEL, AP Business Writer

Sun Jun 29, 2:55 PM ET

Even for an industry awash in bad news, the newspaper business went through one of its most severe retrenchments in recent memory last week.

Half a dozen newspapers said they would slash payrolls, one said it would outsource all its printing, and Tribune Co., one of the biggest publishers in the country, said it might sell its iconic headquarters tower in Chicago and the building that houses the Los Angeles Times.

The increasingly rapid and broad decline in the newspaper business in recent months has surprised even the most pessimistic financial analysts, many of whom say it's too hard to tell how far the slump will go.

"They're in survival mode now," said Mike Simonton, a media analyst at Fitch Ratings, a credit analysis agency.

"We had very grim expectations for the sector," Simonton said, and publishers have either met or surpassed his estimates for how bad the results would be.

Last week alone, deep staff cuts were announced at The Hartford Courant and The (Baltimore) Sun — two Tribune papers — as well as at the Daytona Beach-Journal, while The Detroit News and Detroit Free Press said they hoped to reduce the head count in their joint operations by 7 percent through buyouts. The Boston Herald said up to 160 employees would be laid off as it outsourced its printing operations, and in a memo explaining the terms of its job security pledge, the Star-Ledger in Newark, N.J., said it is operating in the red. The week before, McClatchy Co. said companywide staff cuts of 10 percent were coming.

Tribune, meanwhile, told its employees Wednesday that it hoped to wring more value out of its "underutilized" real estate in Chicago and Los Angeles, extending an asset-selling program Tribune is pursuing to service a $13 billion debt load, much of which it took on from going private.

Tribune has already reached a deal to sell one of its largest newspapers, Long Island-based Newsday, but ran into delays early this month in liquidating Wrigley Field, where the Chicago Cubs play, when negotiations for the field's purchase by a state agency broke down over financing. Tribune is also moving to sell the Cubs.

Tribune has enough money to meet its debt requirements this year, bond analysts have said, but it must make headway on asset sales in order to meet its obligations in 2009.

Tribune's troubles reflect broader problems in the industry, where a deepening economic downturn is worsening losses from a long-term shift away from print advertising toward online, especially in classified categories like help wanted, autos and real estate, where rivals such as Craigslist, Move.com and AutoTrader.com are thriving.

Advertising is by far the most important source of revenue for newspapers. And in the first quarter, their overall ad revenue slumped 12.9 percent, led by a 24.9 percent drop-off in classifieds, compared with the same period a year earlier.

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In fact, the industry group that compiles and releases ad revenue figures, the Newspaper Association of America, this month stopped putting out quarterly press releases with the numbers, though it quietly updated them on its Web site.

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NAA spokeswoman Sheila Owens said in an e-mailed statement that the organization will now put out press releases only with full-year data "to keep the market focused on the longer-term industry transition from print to a multiplatform medium."

Some say complacency in the industry about the threat the Internet posed is to blame for the current quagmire.

Speaking on the CNBC business news cable channel Friday, Sam Zell, the real estate magnate who is now Tribune's CEO, said newspapers have historically been "monopolies" in their local markets and "insulated from reality," according to a transcript of his remarks provided by CNBC.

Going forward, if ad revenues continue to slide rapidly, companies including Journal Register Co., MediaNews Group Inc. and — in the absence of further asset sales — Tribune could then risk violating their loan terms, said Emile Courtney, a media industry credit analyst for Standard & Poor's.

Already, just two major publishers have investment-grade debt under S&P's ratings — Gannett Co. and The New York Times Co. The industry is divided between them and "everybody else," Courtney said.

Given the current poor climate for the business, he said: "I have doubts banks will be as willing as they were in the past to waive or amend covenants."

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Out and Back: Sonic

I freely admit that sometimes I get bugged by things that, frankly, I know shouldn't bug me.

For years the Sonic drive-thru chain would buy national ad spots during games or shows I watch a lot, and it always bothered me a little bit because a) I'd never heard of Sonic; and b) once I discovered what Sonic was, I also discovered that there weren't any within about 300 miles of me.

Well, not long ago, that changed, and New Jersey got a Sonic. And by "a Sonic", I mean "exactly one Sonic."

(Route 9 North, Waretown, N.J.)

In retrospect, I don't know how I almost drove past the place. Possibly mental fatigue from thinking "Where the hell IS IT?" for the last five miles of the drive. Seriously, no building has ever looked more out of place for where it is than this one. You can't really tell from that shot.

I'm not entirely sure, but I think those drive-up stations in the background are for paying with credit or debit cards. I didn't give that a spin because if you're so paranoid about carrying cash that you don't have enough on you for drive-thru fast food, you've got problems I'm not qualified to solve. There is no interior seating that I could see, by the way - they have a patio outside where I actually saw someone get food brought out to his table, but I don't think you're getting inside the building unless you're wearing the uniform.

I wasn't tremendously hungry at this point, so I just got a Coney (what they call a hot dog) with chili and cheese, fries and one of their Famous orange slushes. I capitalize "Famous" because they do it and, as the first-timer, I feel I have to take their word for it.



While I railed on the use of foil paper at Roy Rogers, this probably is the best way to store a drive-thru hot dog.


Plating is not my strong suit. It certainly isn't theirs.

The food was about as nondescript as it gets, which may actually be a good thing. The chili cheese dog tasted like, well, a hot dog with chili and cheese on it. The fries were salted almost perfectly. (This reminds me that my ketchup consumption has plummeted as I've gotten older.)

Sonic makes a big deal about drinks. It's their hook, like how McDonald's puts "Mc-" in front of everything. Sonic's thing is they have a menu of flavors you can add to any drink if you want, so if you want a cherry-flavored Diet Coke, you can get a Diet Coke and ask them to add cherry flavoring to it. Or a Sprite with vanilla (ew). Or even root beer and Powerade, which seems like something you'd drink before going on a mass crime spree.

This was the star of the day:


That's a quality frozen beverage. It may not look like it (blame the photographer), but it is. You'll just have to trust me. Good flavor, structurally sound, not watery, and it holds up - an hour later it was about the same consistency on top and hadn't turned into a melted, syrupy mess.

The topper was unexpected, and, I believe, a fast-food first:


Yep. That's a Sonic after-meal mint. I didn't believe it, either.

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