Black and White and Red All Over

dee1203tom1Can new owners save Maine’s largest newspaper chain?

  • BY: COLIN WOODARD

Life Ring Image ©IStockPhoto.com/pavlen

The staff and readers of the Portland Press Herald have had it rough the past few years. The paper — Maine’s largest and, at one time, its most powerful — had been hemorrhaging cash, advertisers, circulation, staff, editors, reporters, and credibility at a steady rate. Sections had vanished. Entire swaths of its circulation area were no longer being covered at all. The scrappy suburban weeklies that had sprouted up around the city were now breaking many of the most important stories emerging at City Hall, and city residents were increasingly looking to the Bangor Daily News for coverage of state and metro issues alike. By the end of last year, its parent company appeared on death’s door, with outside crisis consultants managing its day-to-day affairs, and lawyers staving off a law suit by its newsprint supplier on account of $124,000 in unpaid bills.

The New Year brought the Press Herald’s staff the first good news they had heard in a long while. On January 7, word broke that Maine Today Media — the company that owns the paper, along with the Maine Sunday TelegramKennebec Journal, Waterville’s Morning Sentinel, and the Coastal Journal in Bath — had found a savior. A group of investors promised to give the struggling chain a much needed cash injection, new management, and perhaps a renewed commitment to journalistic integrity.

“We have been hanging, waiting for a reinvestment in this company, and we think it’s going to give us the tools we need to compete in this environment,” Press Herald editorial writer Greg Kesich, vice president of the Portland Newspaper Guild, the union that represents most of the company’s employees, said after the announcement. “It’s a very exciting step forward.”

Unfortunately, the steps still look like stumbles. Two weeks after the announcement, negotiations with the union broke down after the new investors pressed them for a range of dramatic concessions, including cuts in benefits and the range of unionized jobs, as well as the elimination of union board seats. Union president Tom Bell says investors backed off many of their demands, but refused to make the new contract binding in the event of bankruptcy. “There’s no reason that they can’t buy the paper with this contract,” Bell said at press time, noting the union had made concessions in a new eighteen-month contract signed in late December shortly before the deal was announced. “Whether they will or not, I don’t know.” (Maine Today Media spokesperson Tom Janenda said the investors had no further comment at this time.)

The prospective investors are led by Chris Harte, of Portland, heir of the Harte-Hanks newspaper fortune, who was president of the newspaper chain in the early 1990s, before it was sold to the Seattle Times Company. Harte has served as publisher of the Akron Beacon Journal (from 1989-1992) and publisher and CEO of the Minneapolis Star Tribune before and during its 2009 Chapter 11 bankruptcy. (He left the company immediately after it emerged from protection, losing his 4.1 percent stake.) A conservative Democrat, he has been active in Maine politics, donating to the campaigns and political action committees of Olympia Snowe, Mike Michaud, Chellie Pingree, John Baldacci, Eliot Cutler, and Casinos No! Harte was not available for comment, but he told the Bangor Daily News that he did not intend to occupy the publisher’s seat in Portland. “Our goal,” he said in a written statement, “is to invest and grow this business by delivering professional, trusted news to Maine people.”

Harte is joined by Wellesley, Massachusetts, businessman Aaron Kushner, who has been tapped to be CEO, according to Bell. Kushner, 38, is famous in the Bay State for his tenacious and continuing quest to purchase the Boston Globe from the New York Times Company. He has insisted he has an innovative and, for now, secret formula that would restore vitality to the Globe and, presumably, other papers. “Our plan is a very contrarian plan,” he told Boston Magazine last year. “If you want to grow a business, you have to invest in that business, especially when it is at a weak point; you cannot cut your way to growth.” Kushner, whose previous experience is in the greeting cards business, has said his group still hopes to acquire the Globe.

A third investor is Jack Griffin, former president of Time Inc., publisher of TimePeople,Sports Illustrated, and Fortune. He lasted less than six months because, Time Warner CEO Jeff Bewkes alleged, his management style “did not mesh” with the company. Other executives told the Wall Street Journal and the New York Times that Griffin had sought to reinvent the company and its culture, which wasn’t what his Time Warner colleagues had in mind. Griffin had previously headed another magazine company, Meredith, publisher of Better Homes and GardensFamily Circle, and Ladies’ Home Journal. He comes to the Maine deal as part of Kushner’s 2100 Trust, the investment group assembled to pursue the Globe.

As we went to press, the ownership parties had agreed to terms and Harte and his colleagues were engaged in due diligence. Further details — including the naming of the new publisher and other managers — are expected to be released around the time this issue hits newsstands, if the deal goes through. Kushner’s secret formula will likely reveal itself over time, and will be closely watched by newspaper managers in Maine and beyond.

“The challenges for this ownership group are the same as those that existed when [The Seattle Times Company’s] Frank Blethen bought the papers [in 1996] and when Rich Connor bought them [in 2009],” says Mark Woodward, retired longtime executive editor of the Bangor Daily News. “And that’s to build a business model that will be sufficiently agile and adaptable to deal with the continuing disruptive force of the Internet and social media and related information mediums.

“If there’s enough money there and the people responsible have the courage and will to make change, it could work in the long term,” he adds.

The newspapers have been in a state of limbo since late October, when part-owner Richard L. Connor abruptly announced his resignation as the chain’s CEO, as publisher and editor of thePress Herald, as publisher and editor of the Times Leader in Wilkes-Barre, Pennsylvania, and as CEO of that paper’s parent company, Impressions Media, which had overlapping ownership with the Maine papers. At the time, Connor claimed it was “time for a change for me personally, for my family, and for the company” on account of the long hours he had been working. (Maine Today Media’s president, Donald Duncan — a Connor ally who had also served as publisher of the Times Leader, announced his resignation the same day.) Other investors in the company — including board chair Peter Brodsky (formerly of Dallas-based HM Capital Partners) and Portland dealmaker Bob Baldacci — praised Connor, with Baldacci (the former governor’s brother) saying his “shoes are going to be very hard to fill, and I’m disappointed.”

The Press Herald’s staff felt differently, according to Bell.“It’s difficult for me to say this, because we had a good relationship and I found him very likeable and wanted him to succeed, but my members want people to know that they are very angry at Rich Connor,” Bell says. “This summer, the union leadership learned that the company was in more trouble than Connor had let on previously, and it wasn’t just the recession and the decline in the industry. There was some mismanage-ment that occurred.”

Bell says Connor was an excellent employer who worked to resolve employee grievances, but goodwill towards him evaporated when the union learned the company books had been kept in a sloppy fashion, especially the way expenses were shared between Maine Today Media and Connor’s Pennsylvania chain. There were also concerns about Connor’s decision to invest in expensive advertising discount promotions, while the company’s antiquated publishing, accounting, and editorial software remained unaddressed, crippling efforts to embrace digital news delivery and increasing costs. Then there was the question of journalistic ethics.

“There was a blurring of the line between advertising and news, and it was often unclear why we were writing profiles of businesses that lacked any news hooks,” Bell says. Advertising staff later told him that an infamous March 2010 “puff piece” about a Falmouth car dealer generated twenty thousand dollars in additional ads. “There was some direct editorial interference, such as the governor’s race, where we felt there was some pressure toward stories in Eliot Cutler’s favor.”

“Connor created an organization where the readers didn’t matter, where getting the news story out there didn’t matter, and they didn’t think it was important for me to even cover local elections, which is a pretty basic function of journalism,” says Gina Hamilton, former editor of the Coastal Journal, who says she left rather than preside over such an operation. “They decided it was more important to have boozy pictures of advertisers on the back page.”

Connor could not be reached for comment. In a 2010 interview, he told Down East that scoops didn’t matter to him, and that breaking news stories was “passé.” He rejected the notion that papers like his should focus on local, rather than national and international news. “I think the voters will decide if we’re doing a good job or not, and the voters are our readers and our advertisers,” he said.

“He didn’t care about journalistic quality,” says Bob Mentzinger, former city editor of the Kennebec Journal. “I think his biggest concern was being seen as a high-profile community leader.”

Others say that despite his statements, Connor actually did push his reporters to be more aggressive. One managerial source who spoke on a condition of anonymity said he “was relentless as an editor, involved in the news gathering side, and didn’t care so much about having something first as having all our bases covered . . . It was about aggressiveness and completeness and a take no prisoner’s attitude.” This person and other sources credited Connor for getting costs into line, selling physical assets it could no longer afford, reducing debt, and improving — if not revolutionizing — the paper’s Web site.

But as he made the paper leaner, Connor undermined it in other ways. “The disregard for new media and for high quality journalism that marks the Connor tenure at the Portland Press Herald has created tremendous hurdles for that newspaper,” says Michael J. Socolow, a journalism professor at the University of Maine, pointing to the Bangor Daily News’ foray into the Portland market, where it has stationed three staff writers, given away papers, and developed a large Web audience.

“There’s a sense that Connor had too graceful an exit than he deserved, but at the time we were in such a financial and vulnerable spot that I was not able to speak publicly about how our members felt,” Bell says.

Early indications are that the new investors intend to address these issues, and seem to have both the capital and industry experience to do so. If the deal happens, many in Maine will be hoping they can turn the long-suffering papers around.

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