Lessons of the Tampa Bay Media General Buyouts: Florida's Media Economy is Terrible
Those outside the media might assume folks at the St. Petersburg Times would be popping champagne corks as Media General Monday presented a buyout offer to about half its 1,326 employees in the Tampa Bay area, but that's not necessarily true.
Because we know what this news really means: the state's media economy is getting worse, not better. And the result will be fewer media jobs for everyone.
The problem, as has been noted here before, isn't circulation figures. Here at the Times, we've kept our paid circulation numbers stable and even increased a small bit. But that hasn't helped with the faltering advertising scene, where free classifieds services such as Craigslist have taken huge bites, and problems for retail and real estate have meant fewer ads sold (when business plunges, advertising budgets usually take the first hit).
The result is a tough decision for media managers: If you cut staff enough to bring profits, you may also thin out your product so much it loses credibility with readers. But if you don't cut expenses, especially at a public company like Media General, the market will not tolerate sinking profits for long.
I'm hardly the expert many are in the field, but I heard a few things in reporting yesterday:
--- Florida Communications Group president John Schueler denied rumors that specific employees were being told to accept the buyout offer. he also denied rumors the company specifically hoped to save $3-million. And he doesn't expect to accept buyouts from anywhere near then umber of employees who are eligible for them.
-- Much as Schueler says their reorganization has nothing to do with the proxy fight underway at Media General, it will be tough for company executives to argue their efforts aren't a way to show the company is trying to cut costs in a market that both sides in the proxy fight agree is dragging down the company's stock price. And the deadline for applying for the buyout is one day after stockholders vote on directors for the company's board, choosing between nominees suggested by Media General and dissident investors Harbinger Capital Partners.
--- Much as Harbinger seems to want it, a sale of the Media General properties in Florida makes little sense. Credits markets being what they are, its tough to imagine anyone who could afford the purchase, or anyone who could even make money by selling off the parts. At a time when everyone from Clear Channel to Tribune co. is trying to get smaller, who would want to buy such a huge operation in such a depressed media market -- and why would Media General sell when they are likely to get a rock bottom price?
-- The typical view of convergence -- having staffers work across media platforms such as print, online and TV -- is that its a difficult tool for reducing staff costs, both because its tough to find people who are talented enough to work in multiple mediums, and because it is tough for one person to find the time to complete tasks across all platforms.
For example, if a photographer at a news event has to also shoot video, do reporting for the web site and do "talkback" interviews for a TV station, it may be tough to do every task as well as competitors who only have a couple of those tasks. With this new streamlining, Media General will put that concept to the test.