We have covered quite a few big stories on this blog, including the special session, the District 18 vacancy, the millionaire tax, the County Council District 4 special election and the state police spying scandal. But none of these stories generated the intense interest that our Crisis at the Gazette series did.
First, do not judge this blog by the number of comments our posts receive. We only allow comments from people with Google accounts, which keeps most one-shot anonymous comments at bay. And most of our regular readers are politicians, government staffers, activists and lobbyists – the kind of people who are reluctant to discuss issues on the record. These two factors combine to minimize our online comments.
In terms of site visits, we are consistently in the top five among Maryland blogs that publicly release visit data. On Tuesday, Crisis Part Two generated links to us from many other sites including DCRTV, Media Bistro, PG Politics and countless private listserv posts. That traffic pushed our visits to three times their normal level and set an all-time one-day record for MPW. On Wednesday, Crisis Part Three was seen by double the number of people who normally visit this blog. On both days, we were the most-visited blog in the state (of those that publish data) and it was not even close.
When readers have opinions on my posts, they call me and email me directly. This story was no exception. Readers are astonished at the Gazette’s rock-bottom pay levels and those who contacted me universally believe their reporters deserve more. But a few readers think I am only getting part of the story. They point out that the Gazette’s problems started years before the layoffs and tick off a long list of distinguished editors and reporters who have left. “If they weren’t going through such a brain drain, they would be better equipped to deal with their economic challenges,” says one observer.
Employee instability goes to the top of the company. In the middle of 2006, the newspaper’s much-respected, longtime top editor left. His successor lasted just three months. At the beginning of this year, the Gazette hired a number two manager to work directly under the CEO. That manager also left within a few months. “You are only seeing the smoke,” one reader told me. “There’s a fire going on in there.”
Another reader pointed out that the Washington Post recently reported on its parent company’s financial problems but left out any mention of the Gazette. The Post story contained this tidbit:The Post has had three rounds of buyouts in five years, reducing its newsroom from more than 900 journalists to fewer than 700, but has never had newsroom layoffs.
How comforting to the laid-off Gazette employees! While they did receive severance payments, they had no choice concerning their departures as did their Post colleagues.
As for Gazette management, they have initiated the first consequence of their layoffs. They have closed their Sykesville office and have merged their coverage of Carroll County into their Frederick desk. The Gazette’s new website no longer has a Carroll County tab. As of this writing, their Frederick page has 24 current stories, none of which cover Carroll. Will this someday be the fate of Burtonsville, Aspen Hill, Poolesville or Damascus?
We are also told that Gazette management is quietly searching for our sources. My blogger profile was accessed over 100 times on Tuesday and Wednesday and there was a number of long, intensive searches through my older posts. Could Gazette management be reacting like a typical target of investigative journalism: staying the course but seeking to plug the leaks?
Here are three better courses of action.
1. Pay the reporters more than hairdressers or security guards.
2. Pay the reporters overtime consistent with current Department of Labor regulations. Even the Bush Administration recognizes that the majority of journalists are due overtime pay under federal law.
3. Rebuild the newspaper by committing to hire, develop and retain the best talent, from the reporters up through the executive offices.
The Gazette was once a great local newspaper. It can be great again with the right leadership. We are watching.
Friday, September 12, 2008
Reaction to Crisis at the Gazette
Thursday, September 11, 2008
Starting Gazette Salary in Perspective
We have attracted significant amounts of offline comment on our Gazette series, most of which we will address tomorrow. But one subject that appalls many is the starting salary for Gazette reporters: $26,500. Below we compare that salary to other annual occupational pay rates in the Bethesda-Gaithersburg-Frederick Metropolitan Division (which includes Montgomery and Frederick Counties) as reported by the Bureau of Labor Statistics.
Two quick notes:
1. As we reported in Crisis Part Two, Gazette reporters receive a $500 pay increase after six months and a $1,000 increase after one year. But unlike the vast majority of workers in the other occupations listed above, they are not paid overtime.
2. While we do not have the data, it would be interesting to compare the post-college debt load of workers in the above occupations. Gazette reporters are usually recent college graduates - a demographic cohort with heavy educational debt.
Can't the $4 billion-dollar-a-year Washington Post Company afford to pay these highly-educated, skilled workers more than security guards?
Wednesday, September 10, 2008
Crisis at the Gazette, Part Three
The best newspapers are the ones that attract, develop and retain reporters with experience in and knowledge of their coverage areas, lots of contacts and – most importantly – good long-term relationships with their sources.
The Gazette’s business model makes this almost impossible.
Low pay and few opportunities for advancement create high turnover at the Gazette. The newspaper is always hiring because people are always leaving. For example, since the early summer of 2007, three different community reporters have covered the Silver Spring area. The median tenure of community reporters may be as low as 18 months. And that was before the cataclysmic July 31 layoffs which forced the remaining employees to work longer and harder to cover their departed colleagues’ work.
I have known quite a few Gazette reporters and have always liked them. Every one of them has been smart, fair, polite and has turned out well-written work. But they come and go. Silver Spring has over 70,000 people, five County Council Members, sixteen state legislators and dozens – perhaps hundreds – of hard-charging grass-roots activists. How can anyone come in from a different part of the country and learn the complete social-political landscape of the place in just a few months?
If the Gazette was truly devoted to high-quality reporting, it would invest in its reporters. Start them at modest salaries (although much higher than $26,500) and institute steep, sliding pay scales for the ones who stay. Let them hone their craft in their coverage areas and reward the ones who consistently write high-quality work. Give them a future in the company as respected professionals because that is what they are. The reward for the newspaper is a must-read product that is attractive to advertisers.
But that is not the Gazette’s way. Corporate management from the Post Company has dictated a low-wage, high-turnover business model that funnels any profits into their much-loved Kaplan division. Only the spirit and dedication of their reporters keeps their newspaper in production – but even the best of them leave. And we the readers are paying the price.
The Gazette may produce more articles about Montgomery, Prince George’s, Frederick and Carroll Counties than all other news sources combined. But if it continues to squeeze the pay of its reporters and has more layoffs, the newspaper’s quality will decline. Some community reporting areas may have to be merged – perhaps Kensington with Chevy Chase, or Silver Spring with Takoma Park – if the number of reporters keeps shrinking. That will mean fewer articles spread over larger geographic areas. Analysis and fact-gathering will wane. Reporting will be replaced with transcription.
Some believe that blogs will replace mainstream media sources like the Gazette. I disagree. As a blogger, I depend on quality reporting from the Gazette as much as any of their other readers. Blogs combine fact, opinion and bias to wildly varying degrees of effectiveness. There is still a role – and will always be a role – for true practitioners of the noble profession of journalism.
A place without reporting is a place that does not – cannot – know itself. The Crisis at the Gazette is a crisis for their readers. It is time for the Gazette to stop the layoffs, compensate its employees fairly and treat them with respect. Anything less and we will not get the reporting quality we deserve.
Editor's Note: There are continuing developments on this story and we will be following up later this week.
Tuesday, September 09, 2008
Crisis at the Gazette, Part Two
Thursday, July 31, 2008 will go down as a black day in the history of the Gazette. But its ramifications can be understood only in the context of how the newspaper operates on a daily basis.
The Gazette covers four counties: Montgomery, Prince George’s, Frederick and Carroll. It maintains offices in Laurel (for reporters covering Prince George’s and eastern Montgomery), Gaithersburg (for Montgomery), Frederick (for Frederick and Carroll) and Annapolis (for state politics). Each of the non-Annapolis offices has a cluster of reporting desks that are overseen by an assistant managing editor. Each cluster covers areas that are geographically close together. For example, the northern Prince George’s cluster includes Laurel, College Park, Hyattsville and Greenbelt. A cluster includes community reporters who cover specific areas but their stories can run in other areas nearby. So a story from College Park may also run in the Laurel and Greenbelt editions of the Gazette. The key supervisors in this structure are the assistant managing editors and their immediate superiors, the managing editors. Reporters on county politics, education, sports and business work directly for managing editors in each county.
The backbone of the Gazette is its network of community reporters. Each one is assigned a specific beat, such as Takoma Park. The newsweek starts when the new edition is produced (either on Wednesday or Thursday). The community reporters have meetings with their assistant managing editors at the start of the newsweek. They pitch their own ideas and also receive assignments from above. Each community reporter is expected to produce 5-6 stories per week. Most of the work occurs at the initiative of the community reporters – they are expected to visit relevant events, maintain contact with sources and track down new info. If the community reporters score an especially important story, it might appear in multiple editions of the Gazette or even the Washington Post. It is a challenging job.
Even so, Gazette reporters are some of the lowest-paid college graduates in the entire Washington metro area. Their starting pay is $26,500, disbursed on an hourly basis. If they stay six months, their annual pay increases by $500. If they last a year, their pay goes up by $1,000. They are eligible for the Washington Post Company’s health care plan but must pay the premiums out of their checks. They have a 401(k) plan but their base salaries are so small that few save large amounts in it. The Gazette reimburses them for gas at 36 cents per mile – well below the IRS rate of 58.5 cents. Unlike their counterparts at the Washington Post, Gazette employees are not represented by a union. As a result of the newspaper's compensation policies, most Gazette reporters are single people in their twenties, often living in group houses and commuting from cheaper areas. Few Gazette reporters can afford to live in the communities they cover and many come from other parts of the country.
Worst of all, Gazette reporters are paid only for 40 hours per week and do not receive overtime. This is a serious problem since community reporters often attend night meetings and sometimes weekend events. It does not matter whether a reporter works 50 or 60 hours per week or even more – it is considered “part of the job” and is not reimbursed. U.S. wage and hour laws generally require overtime payments for non-exempt, non-supervisory employees.
On July 31, everything got worse. The Gazette announced it was eliminating 23 positions - a full 14% of its workforce. Among those released were the Silver Spring managing editor (an individual with 15 years experience in the job) and two managing editors in Prince George’s County. The rest of the employees – especially the critical assistant managing editors – will be expected to pick up the extra workload with no commensurate increase in compensation. The layoff announcement shocked the workforce and prompted additional resignations.
In explaining the terminations, Gazette management mentioned the twin pressures of falling ad revenue and rising newsprint prices. They also cited the need to invest in their website (although they did not elaborate on how a beefed-up website with less reporter-generated content was supposed to improve the bottom line). Interestingly, management never directly addressed the question of whether the Gazette is profitable. If the Gazette is indeed losing money, it would make sense for them to tell the employees in order to obtain their buy-in to the new business plan. But management never formally commented on whether the newspaper is making money and that omission may hint at an underlying truth.
In Part One, we chronicled the financial condition of the Washington Post Company, owner of the Gazette. The parent company is slowly making a transition to becoming an educational services firm built around its Kaplan Inc. subsidiary. The Post Company does not release financial information pertaining to the Gazette, but its circulation has been relatively stable since 2000. That may not matter, however. Because the Post Company is trying to grow Kaplan, its publishing divisions may be increasingly viewed as cash cows. Their costs must be constrained and any net income they earn must be channeled into Kaplan for the long-run benefit of the company. It does not matter how hard the Gazette reporters work or how good their coverage is – it is irrelevant to the Post Company’s ultimate goals.
The Gazette’s business model and the pressure it is enduring from its parent company represent a dangerous threat to political discourse in its service area. We will explore how in Part Three.
Monday, September 08, 2008
Crisis at the Gazette, Part One
The Gazette is the weekly newspaper of record in Montgomery, Prince George’s, Frederick and Carroll Counties. No other mainstream media source offers more detailed coverage of local issues in those jurisdictions. But the newspaper has fallen into a dire crisis that threatens both its viability and the capacity of its readers to access high-quality local reporting.
First, some background. The Gazette is a very small part of the Washington Post Company, a gigantic multi-media conglomerate. The Post Company has many lines of business including the Washington Post newspaper, Newsweek Magazine, six local television broadcast stations, a cablevision subsidiary, Kaplan Inc. (a testing and educational firm) and numerous smaller media-related entities. Last year, the Post Company had 19,000 full-time employees, $4.18 billion in revenues, $477 million in operating income and $289 million in net income.
By far the biggest part of the Post Company is its Kaplan subsidiary. In 2007, it accounted for a majority of its full-time employees (11,800), almost half its revenues ($2.03 billion) and nearly a third of its operating income ($149 million). Its entire newspaper division reported revenues of $890 million and operating income of $66 million. Last year was not a good one for the Post’s newspaper operations according to this statement from its annual report: Newspaper publishing division revenue in 2007 decreased 7% to $889.8 million, from $961.9 million in 2006. Division operating income for 2007 totaled $66.4 million, compared to $63.4 million in 2006. The increase in operating income for 2007 is due primarily to $47.1 million in pre-tax charges associated with early retirement plan buyouts at The Washington Post during 2006. Excluding this charge, operating income was down sharply for 2007 due to a decline in division revenues and a $2.3 million pre-tax gain on the sale of property in 2006, partially offset by a reduction in newspaper division operating expenses, including a 19% reduction in newsprint expense. Operating margin at the newspaper publishing division was 7% for 2007 and 2006; however, the 2007 operating margin declined significantly, excluding the $47.1 million in early retirement plan buyouts in 2006.
In fact, the Washington Post newspaper has been in decline for years. Between 2000 and 2007, the Post newspaper’s average daily circulation fell every year from 777,521 to 658,059. The newspaper’s total advertising inches have fallen from 3,363 to 2,301 over the same period – a drop of 32%.
Print advertising revenue at The Post in 2007 declined 13% to $496.2 million, from $573.2 million in 2006. The decline in 2007 is due to reductions in real estate, classified, general and retail. Daily circulation at The Post declined 3.6%, and Sunday circulation declined 3.7% in 2007; average daily circulation totaled 649,700 (unaudited), and average Sunday circulation totaled 902,500 (unaudited).
Gradually, the Post Company is transforming itself from a media entity into an educational firm built around its Kaplan subsidiary. In 2000, Kaplan accounted for about one-third of the company’s full-time employees and one-seventh of its revenues. Last year, Kaplan employed a majority of the company’s workforce and accounted for almost half of its revenues. Why? Educational services is a growth industry and print news publishing is not.
The stock market reflects that basic reality. Since 2002, the Post’s stock value has increased by 12%. Over that period, the S&P Publishing Index (a group of publishing stocks) has fallen by 13% while the Post’s education company peer group saw a stock value increase of 86%. To Post Chairman and CEO Donald E. Graham, owner of 93% of the company’s Class A stock and 35% of its Class B stock, the message is clear: education is the company’s future.
And what of the Gazette? It is a tiny, tiny part of the giant firm that owns it. Of the Post Company’s 19,000 full-time employees last year, only 168 worked as editors, reporters or photographers for the Gazette and its subsidiary, Southern Maryland Newspapers. The Post Company does not report revenue and operating income for the Gazette. But in terms of its print circulation, the Gazette has turned out a steady performance. Since it acquired Southern Maryland Newspapers in February 2001, the Gazette’s circulation has varied between 660,000 last year and 680,000 between 2003 and 2005. Its professional employment has ranged from 165 to 170 over the same period. While it is reasonable to believe that its ad revenues have fallen along with the area’s economy in recent years, the Gazette has not suffered the same magnitude of problems endured by the Washington Post.
But that has radically changed. We will elaborate in Part Two.
