It turns out even a loudly proclaimed digital strategy can’t outrun print’s decline.
Digital First, the entity which has managed the Pioneer Press for almost precisely a year, announced Wednesday the bankruptcy of one of its two consituent chains, the Pennsylvania-based Journal Register Co. It’s Journal Register’s second bankruptcy in three years, the first after hiring much-touted digital transformation architect John Paton, also DF’s CEO.
What does it mean for the PiPress? Nothing, at least for now, insists Paton in a blog post: “Journal Register Company’s filing will have no impact on the day-to-day operation of Journal Register Company, Digital First Media or MediaNews Group during the sale process. They will continue to operate their business and roll out new initiatives.”
The Pioneer Press comes from MediaNews, the other chain in Digital First. MNG had its own quickie bankruptcy in 2010, and in the aftermath, a hedge fund named Alden Global Capital assumed a greater MNG role. Today, Paton said Alden has submitted a “stalking horse bid” for the presumably deleveraged Journal Register. (Stalking horses set a price and often wind up with a not-much-desired company.)
Alden’s move could bring MediaNews and Journal Register one step closer to a formal merger, rather than the odd joint-management arrangement currently in place.
Digital First’s ethos is not to abandon print, but to focus the company’s energies and strategies on digital efforts. In recent months, the Pioneer Press has been a skunk works of sorts for things like a rolling newsroom and “News Toons,” which seem fun but hardly fate-altering. There’s the faintest sound of fiddling amid newsprint flames, but the PP is also bragging about big web traffic gains, especially since the Strib erected its pay wall last year.
Anyway, as is typical in these sorts of things, Journal Register will seek to dump pensions, leases and other promises tied to a more fatted print era. Both Journal Register and MediaNews are private companies, so we only get the numbers execs like Paton choose to share. However, a public bankruptcy filing will open the window wider on how Paton’s operations have performed.
In his blog post, he notes Journal Register print revenue declined by more than the industry average between 2009 and 2011: 19 percent versus 17 percent. Digital revenues grew 235 percent in the same period versus a 151 percent expense increase from 2009 on.