Has Obama compared his campaign to the great movements in progressive history, like civil rights? Mother Jones says he has. What were the editors thinking? And why aren't they linking?

Today's announcement that Centro is taking over the Real Cities Network isn't really an exclamation point. It's more like a period, marking movement between eras. Centro has brought local news websites significantly more revenue over the past several years. Real Cities, on the other hand, was a vestige of Knight Ridder (KR Digital, specifically, in this case) and one of spare parts that McClatchy acquired when it bought the KR papers.

In essence, Centro -- which has become an even more important revenue source as it brings online-only national advertising to local sites -- eliminates some of the noise of the local marketplace in taking over Real Cities. Real Cities repped about 1800 websites in its network. Most of them are also working with Centro, which targets local sites of all kinds -- daily newspaper, broadcast, alt weeklies + -- in delivering local and regional audiences to advertisers. Centro does gain relationships with advertisers, maybe more than 100 new ones, considering that many of them were duplicated.

"It's a scale play," says Centro CEO Shawn Riegsecker.

There is still noise to be sure -- lots of networks and exchanges out there, and the Tribune-Gannett-Hearst-led QuadrantOne still trying to find its footing. But today's announcement sets up 2009 as an intriguing year, focusing acutely on online-only advertising. On the one hand, we've got the newspaper consortium focusing on the adoption of the Yahoo ad platform (starting in September and rolling into at least 1Q next year). On another, we have a new combined Centro/Real Cities. Shawn Riegsecker says his company is growing at a 45% YOY level, even with major declines in General Motors and ATT spending, caused by economic and structural shifts.

Online-only growth is what newspaper companies need.

Tribune reported quarterly earnings yesterday, and said digital revenues had dropped 4% YOY. That's because of classified upsells of course. They produced now-seen-to-be-illusory 25-35% annual growth rates in good times, and now they are dragging online revenue -- the old bright spot in newspaper revenue reports -- down into negative territory. Tribune was the fourth company, after Lee, Belo and Scripps to go negative in the second quarter in digital revenue, with those above the line gasping for positive air.

McClatchy proudly announced in its earning call that it was approaching 50% in the level of online revenue that was online-only -- not upsells. Gary Pruitt's gang isn't alone. 2008 has seen a profound mindshift, accompanied by much hiring and staff re-training, all aimed at making this transition. Unfortunately, it's another case in which the newspaper industry is reacting late, after things have turned, well, officially negative. But it's the right move.

We can all see that McClatchy's move is another in a series of the Pruitt Strategy, enunciated clearly as emerging (!) out of the current mess as a "smaller, more efficient company". He pulled off the sale of the Star Tribune at what turned out to be a good time, got out of Shop Local (long a non-performer), is busy having other companies print his papers (Boise, Bellingham) and now is getting out of the Real Cities Network game.

Here, we can see a survival strategy getting into place. Focus on what you are good at: local content production and local sales. And....importantly use other people's technology. That's the other clear message from the Centro takeover of Real Cities: ad technology is key.

I was there at the founding of Real Cities, some time about 1998. We envisioned it as a whole newspaper industry solution -- a true, cost-efficient, single-platform based content and ad management/sales network that would allow dailies to compete efficiently against the burgeoning portals. Echoes of the failed New Century Network of course hung in the air, and we should have known how star-crossed our initiative would be when Tony Ridder over-ruled the original salmon-and-red logo design for green and blue, the beginning of KR's ill-conceived foray into "branding." But we didn't, of course. We knew a network was needed, and we thought, well, why not.

Very long story shorter, the aims of the new network skinnied and skinnied. It emerged as an ad rep network, with vaguer long-term hopes. It met with some success, but never had much in the way of ad technology as ad technologies have come to rule the day. Riegsecker, a KR alum (Ohio.com), saw a future and saw that it was based a lot on technology, as a way to serve advertiser targeting needs and interests. It took Centro awhile to build the technology -- allowing a better matching of advertiser geo targeting need and local site inventory -- and that's helped him win the game. Such technology for instance increases the delivery rate for ads; underdelivery of 10% or more is not uncommon in the news trade and eats away at revenues. Technology is one of the key reasons, I believe, why it's Centro taking over Real Cities, rather than the other way around.

Now, for the bonus, 2009 question, how long before the Yahoo ad platform technology and the Centro ad technology can do a handshake, benefiting newspaper websites -- many of which are affiliated both with Yahoo and Centro. Recall that Lem Lloyd, who deserves the credit for growing Real Cities into a successful ad network, is now running the newspaper consortium business for Yahoo. Now that points to potential synergy, a synergy that could further fuel online-only ad growth, and not a minute too soon.

There's little intrigue in Tribune's second quarter earnings announcement. As the company says, "Our publishing results are, for the most part, in line with industry trends, which remain consistent with what we reported in the first quarter." Such consistency, unfortunately, is not something you want to be a part of.

All the print numbers are now trending down:

• Advertising revenue generally: -15%
• Classifieds revenue: -26%
• Circulation revenue: -2%
• And the kicker, online revenue: -4%, as Tribune becomes the fourth company (after Lee, Belo and Scripps to announce a first-in-modern-history reversal of online revenues fortunes)

Even broadcast nudged up only a bit, at +2%. Overall operating revenues down: -6%

Ouch. Ouch. Ouch. Ouch. Ouch. Ouch.

But I think there are three other numbers that tell Tribune's larger story, going forward:

• -2%. That's the operating cash flow from continuing operations. As cash flow declines, Sam Zell's flexibility at moving the pieces on the New Tribune chessboard decreases. If, as it looks, ad fortunes will be worse 3Q than 2Q (based on June looking worse than the quarter as a whole for some of the news companies), cash flow will further decline.
• $161 million: That's the cash and cash equivalents being held by the company. It's a cushion without much stuffing.
• $12.5 billion: That's how much debt the New Tribune is still holding.

The last number is still the biggest one too. I think of the New Tribune as owning a row of townhouses. It has taken out one big mortgage of $12.5 billion to pay for the townhouses. Its plan is to sell off the townhouses, or the land under the townhouses, one by one. That's what it did by selling Newsday to Cablevision, a deal that recently closed. The money from that sale -- $589 million -- helped to pay off a debt payment of $807 million. ( It also needed a loan against receivables, always a later resort, of  $218 million to make that payment.)

So now there is one less townhouse -- Newsday -- producing cash flow to help pay down future debt payments. But the $12.5 billion total remains.  You don't need to be a real estate man to do the end-game arithmetic.

For Tribune, this is a game of months. Each sale -- Bud Selig buddying up with Mark Cuban's $1.3 billion valuation of the Cubs may solidify the next one, and reinforce Zell's superior deal-making skills, if not timing, after pulling off a Newsday auction -- buys just that, months.

It's the combination of those three numbers -- overall debt, small cushion and decreasing cash flow -- that will have even a riverboat gambler like Zell looking for an exit.

This American Life's great mortgage crisis explainer, The Giant Pool of Money, suggests that "information" and "explanation" ought to be reversed in our order of thought. Especially as we contemplate new news systems.

This week Dan Gillmor and I posted our questions for ABC News about its reporting in October, 2001 linking anthrax attacks in the US to Iraq. Brian Ross, the reporter on the case, has now responded. But I wouldn't say he brought clarity to the matter.

Excerpted from a Flickr email sent to me today...

"On Saturday morning, Dan Gillmor and I had the same thought when we read Glenn Greenwald's post: ABC News has to respond. But to what, exactly? We tried to put it into three questions: tough but fair as people there would probably say on other occasions."

They tried to shut us out. Their flacks and shills tried to discredit us. Their media lapdogs tried to attack us. But nothing could prevent a people-powered movement from stopping one of Washington's most powerful corporations. Today the FCC delivered a technical knock-out to Comcast. In a landmark decision, FCC Chairman Kevin Martin and Commissioners Michael Copps and Jonathan Adelstein Timothy Karrhttp://www.blogger.com/profile

Get ready for Round Two in the Internet's Battle Royale of 2008. At stake is whether we should allow a handful of giant corporations to close the Web for their own gain, or whether we should put in place baseline protections that will leave our Internet open to the millions of people who use it. Round One occurred late February at a public event in Boston, where Comcast deployed paid Timothy Karrhttp://www.blogger.com/profile

Out of many memorable quotes from my Knight Ridder days, one keeps bouncing back to me. It came of the company's mess in Detroit. Knight Ridder had long run the Detroit Free Press, one of the country's liveliest, most readable papers. But it fell afoul of Detroit's tough economy, and Knight Ridder ended up falling into a minority position, joining in a JOA (don't joint operating agreements seem like relics from another age today?) with Gannett, owner of the rival Detroit News.

Jerry Tilis, a longtime KR ad exec, had been part of those negotiations, the reckoning of the paper and its future. For KR, that reckoning was hard to stomach. I recall Jerry talking frankly about what happened in Detroit. What happened, really, those of us in other Knight Ridder cities asked?

"We believed our own b.s.," he told us. Many more words followed, but those stuck. Knight Ridder people had told the public story of how things would get better, how they'd weather the storm, etc., while they knew the problems were deep and seemingly intractable. Jerry's point: Know the difference between what you had to say for public consumption and the truth.

Today, it is worth looking back on what newspaper people have told the world about their own fortunes. I think of it in three phases:

• Phase I, maybe 1995-2004: “The Internet Won’t Hurt Our Business, and We’re Making Prudent Investments in the Internet.”

• Phase 2, about 2005-mid-2007: “The Internet is Changing Our Business, but We Believe our New Internet Revenues Will Make Up for Print Losses.”

• Phase 3, mid-2007 on: “We Can’t See the Future”.

Each public phase lagged internal reality.

Here's how it played out.

Inside the newspaper company, you look at the mounting set of bad numbers. You hope that what may be a structural change in the market -- craigslist taking classified listings, for instance -- will be cyclical. Experience tells you otherwise. You modulate your tone, parse your words. You have charts drawn up that focus on that amazing up arrow of digital revenue (though on a relatively tiny base) and downplay the down arrow as temporary. You don't offer the public the private arithmetic you know that those two lines together will never -- in the foreseeable future -- equal what overall revenues totaled in the good, old days.

Instead of acting on that truth, and making major moves to restructure the business while you've still got a reasonable cash flow and more ability to get from here to there, you believe too much of your own, uh, wished reality and wait too long. When the bottom drops out, you follow the trend of the industry and frightsize.

Now, finally, we are catching up with real reality, and that's good. I've often said that Elizabeth Kubler-Ross' work (The 5 Stages of Grief: Denial, Anger, Bargaining, Depression, Acceptance) well applied to newspaper fortunes. We're somewhere between Depression and Acceptance. You can see it in statements like those of McClatchy CEO Gary Pruitt that his “visibility is limited.” 

Pruitt is one the good guys in the battle to hold on to as much journalism and community service as the company he heads has lost more than 90% of its market value in 2 years – now valued by Wall Street at a laughable $350 million.  “We’ll become a smaller, more efficient company,” he  told analysts last week. No one wanted to ask the most obvious journalist’s question: how small, how soon?

What's missing from the public conversation, I think are these three key questions of the moment:

• What exactly does this new "local media" company look like? What are its products? How many journalists and ad sales staff does it have, in each city served and centrally? If newspaper companies used white boards like those upstarts in Silicon Valley, what would be on the white board -- and what wouldn't be?
  

• How big is this company in revenue? That's a question investors and financial analysts really want to know, but seldom ask and never get answered.

• What kind of local market opportunity does the rapid shrinking of the DFKAM (Dailies Formerly Known As Monopolies) leave for new entrants? If putting together a mainly online (with niche, focused print) business is the way to go, look for an explosion of new, expanded and better-funded  regional and local efforts as some kind of economic recovery sticks.  There is a widening cast of those watching dailies' demise and wondering where they might fit into this emerging new world order. They include:  the portals (all talking up the value of local media) to early entrants MinnPost, Pegasus, Voice of San Diego and Crosscut, to Arianna Huffington (launching limited forays into "local"), to local broadcasters ramping up their digital businesses and to the now mostly print alternative weekly press. It's the delta between shrinking Old Media and aspirational, if so far tiny, new media that's worth watching, as we figure out a journalistic future. 

Another way to ask the question: what story will we be telling in 2010 and in  2015?

For an excellent perspective on Net Neutrality, read Saturday's New York Times op-ed by OK Go guitarist Damian Kulash. OK Go Goes to WashingtonKulash, who recently spent time on the Hill with bandmate Andy Ross, explains the central conflict over an open or closed Internet. "At root there’s a pretty simple question," he writes. "How much control should network operators be allowed to have over Timothy Karrhttp://www.blogger.com/profile

So what do we make of the first half of 2008 in DailyLand? Bad and getting worse. I've listened to the CEO webcasts -- so you don't have to! -- and must say that there were a couple of eerie echoes of my own suggested remarks, offered a couple of weeks ago ("Candidly, Frankly, Truthfully, Newspaper CEOs Talk About 2Q). CEOs would be the first to acknowledge that the times offer more questions than answers. Here's my first Nine, off recent reports: 

1. Where are the unprofitable properties? In June, Dean Singleton told the World Association of Newspapers that 19 of the top 50 US dailies were unprofitable. We didn't hear a whisper of unprofitability in the comments. Of course, only the public companies reported, which leaves a number of the top 50 unpublicized. Think MediaNews, Advance, Copley, Hearst. We knew that the San Francisco Chronicle was first to make the list, losing a million or so a week for about five years now. Who are the other 18?
2. Does McClatchy's announcement that it has almost reached the point that 50% of online revenues are online-only provide a new foundation of hope? Newspaper companies' reliance on the print/online upsell has been like heroin. Euphoric (25-35% on the way up) and paralyzing lethargy on the way down. Now online growth struggles to reach double digits at most companies, even as online ad spending continues to boom ahead at 18%+ growth rate. The smartest companies have profoundly shifted sales resources and sales training toward online-only, seeing their growth futures in the online ad economy. If McClatchy is a good way's along on licking its upsell habit, that may provide a good foundation for growth, especially as its participation in the Yahoo AMP network rolls out later this year.  Two more online revenue growth questions: a) Wouldn't it be great if each quarterly earnings report broke out online-only sales, by revenue in dollars and by percentage of overall online revenue? That would provide the market a new benchmark to gauge how much companies are building a future, not just cutting a past. b) What's going on with Lee's online growth number? Coming in at a negative 9.1%, it's a head-scratcher. We know that newspaper companies each bring their own unique accounting to print/online revenue allocations, and that could be an issue here. Or could be the upsell addiction, though Lee has put a lot of energy into transforming its sales as well. The next quarter's number will be fascinating to hear.
3. So you think current cuts are tough? Lee told us they cut 2.3% in expenses, this quarter 2008 compared this quarter 2007. But CEO Mary Junck added she plans additional expense cuts of 5-7% in the coming year. That could be lots of newsprint and jobs. McClatchy CEO Gary Pruitt pegged further non-newsprint expense cutting at more than 10%. Other CEOs tell a similar story.
4. Does the June Swoon portend a worse second half? Check out the New York Times Co. June numbers compared to its 2Q numbers. For the quarter, the company was down 10.6% in ad revenue. For June, it was down 17.8%. The Times said entertainment advertising was the prime culprit for June's further turndown, but then said it could be 'til the end of the third quarter before things "loosen up." Gannett's numbers, 2Q (13.5%) vs June (down 16.3%) show the same trend.
5. When do we acknowledge that the classified economy model is broken? What we saw in the 2Q numbers was a 20%+ downturn from 2007. Recall the 2007/2006 2Q comparisons. Those were down 16.4% (that's a print-only number) for McClatchy, for instance. It's not just the fact that the economy/subprime mess has wreaked havoc in real estate, recruitment and auto. It's also the fact that reliance on the internet and its interactivity -- at many sites other than newspaper-owned ones -- increases by the month. Consider Media General's big dive -- 29.5% in a quarter. 
6. Are dividends the next to go? Pruitt made a point of saying the company would be reviewing its dividend payout at its next meeting; last year, the company didn't increase its dividend for the first time in years. That's only prudent, as Wachovia analyst Jon Janedis has pointed out. Companies in survival mode -- and that's where they're at -- are better off reducing debt and otherwise trying to hold their operations together -- if they can family members and other investors to take lesser or no payouts. Other companies have followed Gatehouse's rich dividend approach, with Gannett upping its payout by 30% less October.
7. How much of the new circ pricing strategy will stick? The New York Times has been raising prices since mid-last year and plans more increases in August, reporting success -- 2.5% increase in circ revenue. The Journal recently announced a whopping 33% increase from $1.50 to 2 for single copy, and papers as diverse as Toledo Blade, Chicago Tribune and Washington Post have joined in increasing print prices. Pricing comes against the numbers of continued circ revenue reduction for most companies: Gannett at -2.1% and McClatchy at -5.2%.  My guess: the big national papers find more success here than the metros, who are cutting their products back and asking for a more payment.
8. How long will Americans luxuriate themselves? Luxury goods have been a key growth line for both the New York Times and the Wall Street Journal, as both target luxury buyers with niche publications and sections. Janet Robinson noted that watches and fashion have continued big for the Times. The Journal itself just wrote about the phenomenon of Americans keeping up their lux purchases, despite the downturn. But investors sense this trend may not last -- pushing down luxury stocks 13% just since the end of May.
9. And of course, the biggest question: So how much of this lost advertising comes back when the economy recovers? That's the 64 million pixel question. Of course, some of it will, but it's dreaming to believe it will all come back as it has after previous downturns.  You can't blame them from hoping, but that hope may be beyond audacious.

Content Bridges: More 9 Questions

It's unusual for federal bureaucrats to achieve rock star status, but two commissioners at the Federal Communications Commission have amassed an enthusiastic fan base among the emerging "Open Internet" movement. For several years, Democratic Commissioners Jonathan Adelstein and Michael Copps have stood up, spoke out and worked all the angles at the cavernous FCC in defense of an Internet that isTimothy Karrhttp://www.blogger.com/profile

So much for a cheaper, faster and more open Internet? With news that AT&T and Verizon have just won the most significant chunks of available wireless spectrum, Americans face a future of more of the same: slower Internet speeds for prices that are far higher than what many people pay in Europe and Asia. The Home of the Internet? And without action to restore Net Neutrality protections, the Web Timothy Karrhttp://www.blogger.com/profile

FCC Chairman Kevin Martin is one shrewd operator. When it comes to media policy, this Bush-appointed bureaucrat will do whatever it takes to get it done his way. Unfortunately, Martin's way has nothing to do with his sworn duty to serve the public -- or pay attention to the facts. It's more about his unyielding drive to allow the nations most powerful companies media conglomerates -- including Timothy Karrhttp://www.blogger.com/profile

USA Today joins the illustrious list of news organizations to be taken for a ride by Astroturf. In an article earlier this week, the paper's media beat reporter David Lieberman writes that the end of the Internet is nigh. It will start crashing down around us by the year 2010, he adds, citing a recent "study" by Nemertes Research. The Not-So-Real ThingThe reason for our demise? We dastardly Timothy Karrhttp://www.blogger.com/profile

Last week’s Gannett’s 2Q report was an auspicious start, with the New York Times due Wednesday and McClatchy Thursday.

Start with the fact that Gannett, as both the world’s and US’s largest news company, commands about one of twenty dollars worldwide in the news trade. Add to that, the long-time industry belief about Gannett: they may not be lovable, but the guys (and increasingly) gals are great operators. When other news companies margins rested comfortably in the 20 percentile range, Gannett consistently scored in the 30s.

Gannett’s numbers – 18% down in classifieds; 8% down in retail; 14% down in national; 16% down at USA Today – show how stark and universal the newspaper downturn is. And it afflicts the Western world, from Japan through developed Europe. Gannett has had its own problem in UK as well, writing down its Newsquest subsidiary by $2.5B+ this year.

Gannett has made all kinds of right moves, directionally at least, from its major Seven Desks thinking shift in newsrooms to rolling out niche sites (60 Moms' site and counting) to centralized news video hosting and lately to joining AOL's Platform A network. The issue of course is that none of those moves, and others, will produce big enough soon enough.

The issue is near-term ad sales revenue. So I turned to AdMan (who first appeared commenting on Tribune math), an exec veteran of several big papers and their wars, for his Nine Imperatives on how to reinvigorate ad revenues, sooner than later. As we listen to news company CEOs  relate their travails, this week and into the next months, it'll be intriguing to see how many of the below topics punctuate the conversation.

1. News companies must double-time efforts to re-tool, re-hire to push online only. Online classified revenue has plunged, given its ties to print classified upsells. Gannett’s online classifieds 2Q slowed,” clearly a symptom of too much online revenue being tied at the hip to print classified. In boom times, that resulted in 25-35% growth rates; now the tables are turned.

2. Find new sales talent and reward it.  It’s hard to imagine anyone with exceptional talent and early in their career picking newspaper advertising as a career path. Yet, there is lots of sales turmoil in lots of industries right now, so putting on a new face can pay off. Possible solutions:

•  Offer creative new compensation plans. In the age-old commission/salary question, rumor has it that an major eastern metro is moving from commission back to salary, while a major western metro is moving the other way.  Like a lot of things in life, balance counts.  Full commission-only assumes that reps have more control of outcome than they may have in this environment. It overly rewards when things are good and overly penalizes when things are bad, especially on the larger territories that handle customers like Macy’s. In territories that handle smaller customers, commission starts to make more sense. 
•   Offer responsibility earlier than experience or results would traditionally merit.
•   Make experience in other industries such as a plus – not a minus. Radio guys for instance, have a lot to offer.

Whatever, wherever the source, nothing will get solved without a serious and fairly immediate talent infusion.

3. Create a workable sales structure that meets today’s challenges.  If I had 100 stock options  (Google, not newspaper!), for every sales structure change at the newspaper companies in the last five years, I’d be MoneyMan, instead of AdMan. On this point many get an A for effort, but there are still too few victories. Since time eternal, the question of sales staff structure has dogged business – this is not just a newspaper issue.  One eternal rub: Advertisers would generally prefer to deal with a single point of contact, while companies want multiple product lines to be represented more aggressively than a single point of contact can manage.  Packaged, single-point, multimedia solutions are the only way to win back market share.  That’s going to take strong product development, leadership, sales talent and sales technology.

4. Do everything you can to prevent Preprints from becoming the next Real Estate. Preprints have been a fairly stable business for the last dozen years providing a modest source of growth and becoming the backbone of Retail.  However, now its all about headwinds, and preprints could be headed for a catastrophic decline.  So many reasons, among them:
•    Paper prices are increasing 30% year over year.  It’s not newspapers that are cutting pages -- retailers will trim distribution to save cost
•    Gas Prices have doubled. Retailers will cut pages (and distribution) to save on shipping costs.
•    Circulation is dropping, an average of 3%+ a year, meaning newspapers have fewer copies to charge for.
•    Buying habits are changing and coupon clipping habits are changing. People will always like to save money, but not the same way that they used to forcing retailers to rethink the value of coupons. Consequently, grocers are questioning their investment in print coupons.
•    Print competition is tougher. The Advo/Valassis combination gives grocers and other retailers a new alternative, which will lead to price pressure on preprints beyond simply questioning the value proposition.
•    Online competition is tougher.  Virtually every large retailer, including Target (which is currently the backbone of newspaper distribution programs), is using online distribution of circulars.  How long will it be until one of them has the guts to say “cut the print costs?’  My bet would be that it is Sears and K-mart that have the least to lose.  Sears has traditionally run over 100 preprints per year.  Would it scare Eddie Lampert to drop newspapers?  I doubt it.

5. Moving on after The Department Store Bottom. A missed story in the midst of all of the misery is the consolidation and demise of the traditional department stores.  The combination of Macy’s and May company cut department store spending by more than half in most papers where both had previously run.  Department stores were the most reliable source of ROP advertising and therefore, were highly profitable.  Further, as May Company abandoned mall locations, Westfield, Simon and the like have filled those spots with retailers such as Target or Steve & Barry’s (now in chapter 11) that don’t run ROP advertising or value the newspaper audience.

It’s time to rethink A-section pricing.  A few options are market-driven, auction-style pricing or new pricing structures that reward online spending with bonus ROP; pure-play online can’t match that!

6. Use print classifieds more aggressively and innovatively. The stopper has been pulled from the bottom of the classified drain, and most folks are simply pointing at the sink saying “there it goes!” Why isn’t anyone aggressively leveraging print to drive its online position, for instance, including paid online listings for free in the newspaper. Or consider putting social networking elements into print. For example, how about testing the printing of some info from Facebook in ads – sort of a new age personals. The irony is of course that old-word social networking started in newspapers when they began printing birth, wedding and death announcements. Now social networking is online and more robust, but it can still have value in print.

7.  Tear up the pricing playbook. Salespeople on are on the defensive on price, as the marketplace forces concessions. Old-fashioned finance departments need to do more than monitor the average rate and engage in contentious battles with ad management.  Tearing up the playbook means starting over with new pricing schemes, one of the places that new, young talent  (that’s not mired in “the way we always did it”) could be helpful.  Get aggressive on print/online combo pricing that forces advertisers to step back and rethink their entire budget.  It can be done.

8. The times call for newspapers to be more acquisitive. Yes, capital’s never been tighter, but this is the time to grab more local market share, not settle for less.  Tough economic times are affecting all businesses, not just daily newspapers. In every market there are local shoppers, magazines and websites that combined slurp up a good amount of market share.  The prices for those assets are likely at their historical lows.  If newspapers want to diversify their revenue base, this a great time to buy up the local competition. It won’t make the journalists happy (I can hear it now – “why are you buying this crappy local magazine when you can add two more pages to the A-section?”), but it will start the process of building a multi-media fortress.  If I were the local publisher or Ad Director, I’d be evaluating everything including matchbook cover advertising.  Buy them, consolidate them, whack their costs, network their ads and build market share.

9. It’s not just about the newspaper companies, or the journalism, or the sales staff. Yes, there is a wider world out there. Yes, journalistically, content cuts are worrisome. But content is  not the biggest key to growing ad revenue. I have spent years of my life visiting retailers, large and small. Not once did anyone ever say to me “if you add more content, I’ll spend more with you.”  Nor did they say the opposite. And that’s not what Target (or Sears or anyone else for that matter) is saying now.  Revenue is declining as much or more due to structural changes in Retailing, Real Estate, the Recruitment process and Automotive, all backbones of the newspaper industry.  Those industries are changing (with as much or more drama than newspapers), and those changes are impacting newspapers.  Understanding the other guy's problems, and figuring out how to solve it with him, is the key.

Comcast can't seem to get it straight. On the one hand, the cable giant blocks access to certain Web applications. On the other, Comcast executives extol the virtues of a "free market" to safeguard against any abuse of users' right to choose online. So which is it? What the cable giant really wants is to thwart any policies that would stop it from doing whatever it pleases. And at this moment Timothy Karrhttp://www.blogger.com/profile

It's mine, but it should be yours. Can we take the quote marks off now? Can we remove the "so-called" from in front?

It's time for second-quarter newspaper earnings reports, with Gannett leading off Wednesday, with the long tale of woe to follow. Given the many newspaper staff cutbacks, which I thought might include the investor relations people, I've put together a few boilerplate remarks that I hope are helpful.

Good morning. Let me say I’m glad that the few remaining financial analysts covering the industry want to hear about our second quarter results. Our CFO will be giving you the details on those in a few moments. But let me make a few introductory remarks first.

Frankly, visibility has gotten worse. We told you in the last quarter that it was limited. Well, now – did you see that George Clooney movie “The Perfect Storm” -- we’re smack in the middle of the biggest fogbank you’ve ever seen. Some of you have asked why print revenues have fallen off the table. Frankly, I don’t even see the table anymore. What I see though, I don’t like. Some of you have asked to see what I see, and I’ve got to tell you, it’s better not to.

Excuse, me, I think I’m being Twitterized, isn’t that what you call it? Rupert keeps buzzing, like I’m media so I can be in Sun Valley and you newspaper rats are stuck in your hot, brick buildings. But back to the subject at hand.

First, let’s address costs.

We’re having our people talk to Dean Singleton’s people – I’m not talking to Dean directly; I think that’s how Ganzi got in trouble – about centralized printing. Frankly, Dean’s better than us at thinking outside the box, and we’re talking about one large printing plant, somewhere in the low-wage rural West, and then distributing the papers almost instantaneously, through some kind of system of high-tech pneumatic tubes. Apparently, it’s part of that Google Print deal, involving Google Flux technology. Sounds almost like back-to-the-future, but my people tell me it’s got potential.

You all know that Goldman Sachs is now predicting 30% year over year increases in newsprint pricing for the second half of the year. For some reason, all those Indians and Chinese are buying up newspapers like there is no tomorrow, driving up paper usage and pricing; I’d like to know their secret sauce.

As you know, our biggest cost is people.

On staffing, some of you have asked why we don’t cut more, and some of you have asked why we cut so much. Which proves I think that we’re taking the right, down-the-middle approach.  To tell you the truth, it’s a whole new world out there. Journalism schools seem to be stealing away our most experienced talent. Then there’s ProPublica, which considers itself some kind of high-minded, non-profit, picking off our highly prized investigative reporters. Then there’s the allure of these pajama blogger start-ups; did you see that Rafat Ali guy just got a big payday selling his site to the Brits? I always wondered if his work permit was in order.

We do realize that we need reporters, but frankly, they are a pain in the ass to deal with in good times. And, now, always in a bad mood. I’m told all the so-called “content” they create will prove very valuable online, even if we have to shrink the paper to the size of a menu. I just keep asking how soon?

Now let’s talk about revenues.

On ad sales, we’re thinking of adopting more self-service techniques. Hey, if you haven’t seen that YouTube video on how publishers can make more money using Google’s system, you should.

Our big initiative, of course, has been our work with Yahoo through the consortium. We’ve bet most of our 2009 growth on using its AMP system – or whatever they call, seems they have some legal problem on that, but they’ve got enough lawyers to work it out. Frankly, we love it. They do all the technology hocus-pocus, and our sales people just sell more stuff. You know, when they are over there golfing in Scotland with the car dealers and all, they just ladle on some more online products, and we can make some new revenue.

Some of you have asked what if Yahoo gets sold or split up like an estate. To tell you the truth, we haven’t a clue. Frankly, we don’t think it’s fair. We finally get our, excuse me, stuff together with the consortium, and then Steve Ballmer and Carl Icahn have to spoil the whole thing. We can’t seem to catch a break. We try not to think about how we’ve placed the continued viability of the American newspaper industry on the fortunes of Yahoo. I, for one, sleep better, not thinking too much about it, after 9 p.m. Anyways we have the firm assurances of Hilary Schneider that one way or another, it will work out okay, and my people say her track record certainly bears that out.

On content, you’ve asked what we’re doing in video. Lots, I’m told, though it’s not easy getting those union photographers to deal with things that move, my people tell me. Anyhow, AP’s on top of it, I hear; and yes, we plan to stay part of the AP. We’re now paying on a month-to-month basis, though I think we discontinued the use of the IndyMac card on that one.

Now, let me talk about the company overall.

We’ve previously announced that we’ve engaged strategic consultants, which – I won’t be fancy about it – is a way to say we’re offering for sale anything anyone would like to buy. Sam’s running a seminar on selling the real estate out from under each of us; my people are going, and I told them to watch their wallets. Craig still seem to have some cash – I want you to know that while I’m sure he earned every penny of that $7.9 million last year – we’re a tad more prudent than Gannett, and my compensation shows it. 

Anyhow, Craig just bought out Gary and Sam in the ShopLocal deal. Couldn’t believe McClatchy could only clear about 8 million, as much as Craig pulled down in a year. Are we talking with Gannett on deals; would we like to talk with Gannett on deals? Sorry I can’t comment, but our phone number will be at the bottom of the transcript of this call.

There’s been some speculation about splitting up our company. We’ve asked our strategic review team to take a look, though I’ve got to tell you I can’t figure out what those guys at Scripps and Belo are all thinking. One is splitting up their fast-growing cable assets from their mature ones, putting TV and newspapers together. The other is splitting up newspapers and TV.  I remember the good, old days when we all we split was the stock.

We’d talked with our fellow companies about a mutual aid society, but then Dean had to remind us that 19 of the top 50 papers are already unprofitable. I don’t know my board wants to hear the details. I do feel particularly bad for the new guys. Hey, Chris Harte and Brian Tierney got their fraternity pins in good faith – we really didn’t know how bad it would get how fast. Funny, those rich guys – Welch, Burkle, Broad, Geffen – we don’t hear from them much anymore; they’re probably on to the McCain and Obama campaigns for now. Still, we don’t like to hear that word that starts with a “d” and gets into the blame game.  That’s not necessary.

As you know, we’re trying to do the impossible: increase dividends, buy back stock and retire debt. I don’t need a CFO – just kidding – I need Houdini.  On stock buybacks, let me say this. We’d do it, except for two things. We don’t have the cash, and we expect the share price to be lower, so that if we do get the cash, we’ll get a better deal. Wait a minute, we’ll strike that last comment from the transcript.

We do have one unusual initiative we’re looking at. You’ve all heard of reverse publishing, I believe, you know taking that web mumbo-jumbo, best written for free by some unemployed suburbanite, putting into a “community” section and selling ads around it? Well, this is a variation on that I’ve got to admit it comes from that analyst that bugs the hell out of me. He suggested leveraging this new green revolution hullabaloo and getting paid not to print papers. You know like the farmers get paid not to plant crops? Well, it runs against my grain, but my people and our few remaining friends in Washington – what is it with the Republicans anyhow – are looking into it.

Sorry, Rupert’s all a-twitter again. So we’ll have to cut it off without questions this quarter.  One last point though.

At the end of the day, I’ve got to tell you these are the toughest times we’ve ever faced. Only thing that gives me some comfort is that we’re not Tribune.