Arkansas Business media reporter Mark Hengel talks to Arkansas Democrat-Gazette President Paul Smith about the salary freeze, the subscription increase and more. Smith says the newspaper industry will improve when the economy does. Also: Hengel talks to American Journalism Review writer John Morton, who assesses the Democrat-Gazette’s move.
Arkansas isn’t immune to the economic difficulties the country’s major metro daily newspapers are facing, after all. Max Brantley’s Arkansas Times blog today reports what the Arkansas Democrat-Gazette is doing to deal with advertising revenue declines and increased costs for newsprint and fuel: a hiring and salary freeze.
Max has the memo from Democrat-Gazette president Paul Smith:
We have 1,316 employees. While many newspaper companies have had several rounds of layoffs during the past several years, we have resisted doing this and we hope we can continue to do so, but we must keep our payroll costs from going higher. In an attempt to do this, we are eliminating salary increases for the remainder of this year. We will also try to reduce costs through attrition so we will temporarily not replace departing employees unless absolutely necessary. These polices will apply to all employees in all departments throughout the newspaper. We will evaluate our situation and these policies again at the first of next year.
We realize our employees are responsible for much of our success. Knowing that makes this decision even more difficult. However, if if we don’t act prudently now the cost to our employees could be greater.
In his memo, reprinted in full after the jump, Smith noted a couple of factors contributing to the decision to cut back:
- Advertising revenue declines “for the second consecutive year and the newspaper industry as a whole for the third year in a row.”
- A 24 percent increase in the cost of newsprint, year over year, adding $4 million to the newspapers’ costs.
- Its more than 1,100 carriers drive 1.6 million per month to deliver the paper. Fuel costs have risen.
Smith’s memo also noted that, “Many banking companies, auto dealers, real estate firms and retailers of all kinds are struggling to maintain their operations.” Those, of course, are all major newspapers advertisers, particularly the auto dealers. And earlier this week, we heard how auto dealers’ tough times were rippling through the newspaper industry.
Max also notes something us at Arkansas Business Publishing Group, as niche publishers, are very well aware of: that to find new revenue sources, the Democrat-Gazette has dipped into niche publishing. It launched Sync, aimed at younger readers, a little more than a year ago, and it plans to battle our company’s own society magazine, Little Rock Soiree, in September with a new monthly glossy mag called Arkansas Life.
We’ll also point out something Democrat-Gazette subscribers might already be aware of: the paper has increased its subscription rates.
Larry Graham, the paper’s circ director, announced the increase in business brief in the paper’s Saturday edition on Aug. 2. One-month subscriptions for seven-day delivery goes up a $1 to $13; three-month subscriptions for seven-day delivery goes to $39 from $36; one-month subs for Sunday-only delivery goes to $6.25 from $5.67; and the three-month rate for Sunday-only goes to $18.75 from $17.
Graham cited higher fuel costs for the increase. He said single copy sales wouldn’t budge, citing the cost to revamp the vending machines.
(The full memo from Smith after the jump.)
Filed under: Arkansas Business, business, Internet, Media, Newspapers, Sync | Tagged: ABPG, advertising, American Journalism Review, Arkansas Business Publishing Group, Arkansas Democrat-Gazette, Arkansas Life, Arkansas Times, fuel, gas, John Morton, Larry Graham, Little Rock Soiree, Mark Hengel, Max Brantley, Media, news, Newspapers, Paul Smith, publishing, Sync | 4 Comments »