Blog by John Miller

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Stabbed in the back

Rosie DiManno has let her readers in on a secret that I'm sure publishers don't want anyone to know: Newspapers aren't  published for you and me, they're published for the privileged one percent.

The amazing thing is that the Toronto Star printed her column. It was headlined "Occupy newsrooms to rescue words." Good for her for writing it and speaking truth to power so effectively, and good for the paper for having the honesty to run it.

DiManno invokes the rationale that is fueling the Occupy Wall Street protests and applies it to the press. It's a business that's plunging itself deep in debt to chase after elusive new technologies at the same time that readers and advertisers are deserting in droves. As a result, share prices and profits are shrinking, although not disappearing. Its top executives, under pressure to show short-term gains, earn huge bonuses to do the easiest thing in the world -- shed experienced and loyal employees to cut costs.
Bemoaning the replacement of gifted reporters by cheaper "techno-geeks," people who know how to dump raw video from news events on the internet instead of crafting stories people want to read, she makes a startling suggestion: "I propose that we -- writers, photographers, editors, corner-office managers who still love papers -- ... occupy newsrooms to rescue them from industry saboteurs, managers overcompensating for a belated grasp of the Digital Age, and the new disciples of technology scrambling to satisfy corporate board masters."

Her column echoed one written earlier by New York Times commentator David Carr, who cited the "disastrous" reign of Craig Dubow as chief executive of Gannett, the U.S. newspaper chain that owns USA Today. Gannett’s stock price declined to about $10 a share from a high of $75 the day after he took over; and he got rid of 20,000 employees at the company's 82 newspapers, crippling their ability to cover the news.

Despite that record, Dubow wasn`t fired; he retired under his own power, walking away with $37 million in retirement, health and disability benefits.

Occupy the newsrooms indeed. There are lots of spare seats.

It`s no coincidence that at DiManno`s own paper, CEO David Holland began 2009 earning a paltry $415,000 and ended it at $700,000, a most healthy little raise. It wasn`t a very good year for the company, however, which showed a loss in its key Star Media Group division, which includes the Star, Metro, Sing Tao, EyeWeekly and digital properties like Workopolis. Yet the very next year, Holland`s total compansation zoomed up to $3,019,942. When he retires, he will enjoy a private pension of more than $500,000 a year.

Runaway executive compensation has been an issue for years at the Star, which is Canada`s largest newpspaper. In 2007, the union representing most of its employees issued an unusual message to shareholders. "The union is angry that Torstar executives ... continue to see their compensation rise to stratospheric heights, while the share price and profits continue to decline, in turn causing layoffs," said the Communications, Energy and Paperworkers Union.

Just look at the case of Star publisher John Cruickshank, centred out for special praise in Torstar`s last annual report for "spearheading a transformational year" by increasing Star Media Group`s operating profit to $30 million, largely by saving $20 million through "restructuring, lower pension costs and lower newsprint costs."

Translation: Fewer employees, fewer readers, fewer expenses, but way more executive compensation. Cruickshank received $1,030,804 in salary, bonus and perqs last year. It`s tempting to say he really earned it, but the bonus and perqs seem to come his way regardless of how the company and its shareholders do financially. The year before, when the division was in the red, Cruickshank earned even more, $1,084,500. That compensation included something that I've never encountered outside the world of pro sports -- a "signing bonus" of more than $70,000.

This culture of entitlement comes from the top, of course. John Honderich pays himself a retainer of more than $270,000 to act as chairman of the Torstar board. Not that he needs it. The Torstar stock he owns is valued at a cool $60 million.

Cruickshank and Honderich may be fine fellows but they are who DiManno was really talking about when she wrote: "Lots of do-re-me in the business, I`m thinking, if too often unfairly distributed among execs whose primary solution for what ails this industry is to slash and burn whilst being rewarded for their singular lack of imagination. Dump half the staff, cannibalize the core product and -- ding-ding-ding! we have a winnah here! -- earn yourself a honking big bonus. How very ingenious."

Newspapers, she said, are being stabbed in the back. "We`re deliberately weaning readers off the tactile experience of newspapers by luring them to instant, sloppy, error-riddled, cursorily edited reportage. Then we wonder why circulation is declining? Like I said, dumb as a bag of hammers, the ruling elite in my business. But they`ll retire to lives of leisure and financial security."

If you love your local newspaper, maybe it is time to occupy it. At the very least, courageous people like Rosie DiManno may need your help to save their jobs.