Kushner pulls the plug on LA Register 'effective immediately' *

oc-weekly-kushner-cover.jpgReporters for the Los Angeles Register began posting on Twitter after 11 p.m. that the end came in an email with memo from Aaron Kushner and Eric Spitz. City Hall reporter Asher Klein on Twitter says the memo informs staffers the LA Register website will continue but that some people will lose their jobs. He quotes Kushner and co-owner: "We believe the true definition of failure is not taking bold steps toward growth." There will be a story on the Register front page in the morning, more than one staffer is saying.

Hillel Aron of the LA Weekly reported last Friday that the rumors were running strong that the LA Register was in its final days. The Los Angeles Register debuted April 16 with a staff of 40 and the hopes of many in the newspaper business riding on its prospects. The Register did good stories, but its impact on the local news market was essentially nil. There just wasn't a critical mass of people looking to pay for or consume what it was offering: the same news and local feature stories as everybody else, a kooky lineup of columnists that included, for no apparent reason, Kareem Abdul-Jabbar, and a marketing campaign that promised the Register would be less liberal than the competition. I don't think I have seen the print paper more than twice since the first day. And I never heard anybody talk about something they read in the LA Register.

Still, Kushner spoke with confidence that if he built a new newspaper the people would eventually come and create a profit-making community around it. By June he ordered involuntary time off for everybody on the staff at the Orange County Register mother ship and in Los Angeles, amid reports that bills weren't getting paid. The Kushner boosters in the media analysis sector stopped boosting quite so much, and in the end the paper made it five months but not six.

Aron posted perhaps the most apt tweet:

The Los Angeles Times got up a story before 12:30 a.m. quoting from Kushner's memo that the Register would pull back to focus on Orange, Riverside and San Bernardino counties where the company has decades-long and "deep relationships with subscribers and advertisers."

"Pundits and local competitors who have closely followed our entry into Los Angeles will be quick to criticize our decision to launch a new newspaper and they will say that we failed," said the memo, signed by Kushner and his Freedom Communications co-owner Eric Spitz. "We believe, the true definition of failure is not taking bold steps toward growth."

The memo hints at layoffs, but provided no specific details.

"There will be some staff changes with our content team as part of the changes in Los Angeles," the memo said. "For those that will be leaving, we say thank you. We are most grateful for their service to the community."

* Update: The Kushner-Spitz memo buries the lede:

When purchasing Freedom Communications a little more than two years ago, we committed to investing in and improving upon the quality of the Register and its two-dozen community newspapers. We’ve recruited some amazing journalism talent, added new sections, and acquired a wonderful portfolio of family, business and golf-themed magazines.

Last November, we added The Press-Enterprise to our portfolio. Freedom expanded its regional footprint even further with the addition of the Easy Reader newspaper and magazine portfolio in January, and the Los Angeles Register in April.

With every new investment, you have risen to the challenge by creating an amazing caliber of product. Freedom’s total revenue has grown in an industry where many of our peers are in perpetual decline. Our local print advertising business isn’t just up, it’s up double digits over last year. Our advertiser account base has increased. So has our circulation and commercial printing revenue. Digital revenue and traffic have also now begun to trend upwards with the successful launch of our Digital Freedom products.

You may have seen today that Freedom just sold the Orange County Register headquarters. This was a sale-leaseback where we will continue to serve Orange County from our current headquarters building. This was another step in our progress to strengthen our balance sheet and focus our finances on our core business of building community through our newspapers.

We have also appointed ACI California LLC as the distributor of the Register beginning October 4th, thus building upon our existing working relationship. While the timing has been updated, this is part of a long-standing transition plan with the Los Angeles Times as the two companies come to the planned conclusion of their delivery contract. We hope and anticipate that it will be an amicable transition as we endeavor to be a good business partner with them, and they do the same.

As we look ahead, we are examining all aspects of our newspapers to determine the geographic areas and news topics that are most profitable and deliver the most value to our subscribers. One of our biggest challenges – and one that our industry continues to wrestle with – is to evaluate our opportunity costs. In other words, we must make difficult decisions on where we should invest our time and resources to grow and where we should not.

To that end, we have made the decision to cease publication of the Los Angeles Register, effective immediately.

This transition allows us to direct more of our focus and energies toward growing and delivering even more value in our core markets of Orange County, Riverside and San Bernardino Counties. We have deep relationships with subscribers and advertisers in those markets that extend for decades. Our investments in quality in the past two years have changed the trends of our core business positively. And we are now that much more committed to building upon our foundation in Orange County, Riverside and San Bernardino Counties.

Our focus in Los Angeles will be on strengthening the Easy Reader portfolio of newspapers and magazines, which have a four-decade history in serving coastal Los Angeles communities, and we have now expanded to serve the communities from Malibu through Santa Monica down the entire coast and including Torrance.

The Easy Reader portfolio has an average weekly distribution of 108,750 and 438,000 monthly. Long Beach Register’s total weekly distribution is 62,522 households. We now deliver more than 170,000 papers every week and more than 685,000 monthly with the combined reach of the Easy Reader portfolio and the Long Beach Register.

The website will continue to publish content from our reporters and columnists who cover topics of specific interest to Los Angeles and the region, such as real estate, food, concerts or Lakers basketball. There will be some staff changes with our content team as part of the changes in Los Angeles. For those that will be leaving, we say thank you. We are most grateful for their service to the community.

In previous Town Hall conversations, you have heard us describe our business model as a virtuous circle: the more support we have in a local town, the more in turn we can invest back into that town. In the simplest terms, we grow and adapt our investments based on specific community support.

The production, printing and distribution of a new daily newspaper serving 88 communities within Los Angeles had real cost, and required greater community support than it initially achieved. We will, and should be, regularly making adjustments to align our cost structure with what we believe is achievable in revenue.

Pundits and local competitors who have closely followed our entry into Los Angeles will be quick to criticize our decision to launch a new newspaper and they will say that we failed. We believe, the true definition of failure is not taking bold steps toward growth. While we tried an important new initiative and determined it did not meet our criteria for success, it does not mean that our business as a whole has failed. Rather we have made and will continue to make the difficult but necessary evaluations of where we focus our team’s energy and resources that will generate the most growth and the most impact for our business and our community.

While there is no silver bullet or clear-cut answer to achieving continual growth in the newspaper industry, we firmly believe newspapers truly matter. The Orange County Register and The Press-Enterprise have a rich history of serving their communities for 109 and 136 years, respectively, and will always have a place in connecting our community and helping it thrive.

From day one, we made an explicit commitment that we were going to take the challenges and opportunities head-on to put our institution on a permanently profitable path of growth. That has not changed. We like many of the trends we are seeing in Riverside, San Bernardino and Orange Counties with our daily and weekly products, and in Los Angeles with our weekly products. We are excited to focus our immediate energies on their growth.

We witness the rewards and impact our products are making on the subscribers and businesses we serve each day. Seeing the fulfillment of our community-building mission and the end result – amazing caliber of product – is hopefully what motivates all of us to come to work each day and perform at a high level.

Thank you for your commitment to pour everything we have into proving that newspapers have a vibrant and healthy future.


Aaron Kushner
Eric Spitz

Updated post

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