New York Times media columnist David Carr was in Orange County last Tuesday to judge for himself if Aaron Kushner's print-and-expansion strategy at the Register was working. Carr had to rethink his column on Thursday when the Register laid off 32 newsroom staff and replaced top editor Ken Brusic. Kushner still talks big about the upcoming move into Los Angeles and the bet that Register-speak will connect with Angelenos (let alone in OC — circulation there is flat.) But, writes Carr, "When I visited Mr. Kushner on Tuesday, it was obvious some of the air had leaked out of the balloon." Now Carr is a skeptic.
"The ambition is admirable," Carr says, "but some of the execution has been head-scratching." Kushner wouldn't tell him if the bigger, fatter Register is profitable right now. He apparently declined again to offer convincing evidence for his belief that people in LA County will form community around a new, outside paper that will be just the latest to claim it offers an "alternative" political ideology to the Times. For a lot of people, that just telegraphs there will be a pronounced political slant to the LA Register's coverage of City Hall and the San Fernando City Council, should the paper even try to cover any cities.
“Many people think we are a little crazy,” [Kushner] said, sitting in his office with a view of Saddleback Ridge over his shoulder. After experiencing some success buying and operating a greeting card company — another legacy business others had left for dead — he says that newspapers have some life remaining. “We start from a very straightforward premise, which is that we believe newspapers exist to build a community, and I think that’s a very different mission than many newspapers have, and that educates our business model.”
He and Eric Spitz, the company’s president, clearly believe newspapers went off a cliff by cutting costs while chasing clicks and cheap digital advertising. Mr. Kushner funded 200 journalists to carry out a relentlessly local print strategy in Orange County, created two dozen new sections, upgraded the weeklies he owned, and in August began publishing a new daily, The Long Beach Register.
Mr. Kushner built a better, or at least bigger, Orange County Register, but readers have not responded as he hoped, with circulation still flat at the daily. A hard paywall on digital access, intended to push readers toward print, reduced digital revenue and print advertising has not rebounded.
Even after the layoffs, Mr. Kushner expects to produce the new Los Angeles Register with existing staff using satellite offices, which seems like a reach, given his commitment to hyperlocal coverage; it will take a lot of boots on the ground to cover over 80 towns in Los Angeles County....
He clearly sees himself as a smart entrepreneur making bold bets. I see a man on a wire, with millions of dollars and hundreds of jobs at stake.
Gary Warner, who was laid off last week as Travel editor, told Carr there were signs that all the hiring and editorial ramping-up was not working. "“He stood up in front of the newsroom and said that digital was a very small part of the business and that he was going to invest in making a high-quality print product, and I was like, ‘Hallelujah,’ ” Warner said. “When all of the hires were made so quickly, our eyes all started darting, wondering where all the money was coming from. And by the beginning of this year, it was obvious that things had changed. Pages started going down, and budgets were being crunched. We knew things were not going as planned.”
There's still no clear picture of how the LA Register will compete journalistically with the existing LA media — or when that will begin. The Columbia Journalism Review flipped over to the skeptical column in a web story on Friday.
The Register’s cuts weren’t part of the script. And the expansion into Los Angeles—without adding additional staff—could be taken as much as a sign of desperation as of confidence....
The big question now is whether Kushner and Spitz invested too much too quickly and now need a correction or whether their entire plan simply doesn’t—and can’t—pencil out and this is just the first round of layoffs.
Kushner has said that the paper is profitable on an operating basis, but that implies that it’s not on a net basis, after taxes and interest, which are presumably sizable.
The biggest problem with Kushner’s strategy was completely ignoring the possibility of digital revenue growth. Instead of implementing the metered-paywall model that has worked so brilliantly for The New York Times and others, the Register put up a hard paywall and charged way too much for it—$30 a month.
By the way: The laid off at the Register include Mona Shadia, who we wrote about when she was hired and assigned to report about Muslim life in OC. Gustavo Arellano posted most of the names of the laid off at OC Weekly.
New York Times photo of the Register newsroom by Monica Almeida