The Gannett Company is the latest large media company to announce it will split its television and newspaper holdings. Among Gannett’s holding are the Arizona Republic and KPNX TV in Phoenix. Micheline Maynard, director of the Arizona State University Reynolds National Center for Business Journalism, will discuss the move.
Ted Simons: Good evening, and welcome to "Arizona Horizon." I'm Ted Simons.
Ted Simons: The Gannett Company is the latest media giant to announce that it will separate its television and newspaper holdings. Among Gannett's holdings are "The Arizona Republic" and local NBC affiliate KPNX-TV. Joining us now to discuss the move is Micheline Maynard, director of ASU's Reynolds National Center for Business Journalism. Good to have you here. Thanks for joining us.
Micheline Maynard: Thank you, Ted.
Ted Simons: What exactly did Gannett do?
Micheline Maynard: So what Gannett did is what other major media owners are doing. It has split its broadcast properties from its publishing properties. I actually worked at "USA Today" back in the 1990s, and while I was there, they were acquiring broadcast properties, and they basically said the future would be as a company with this mixed kind of ownership. Now they've decided to join other companies like Tribune, like Time Warner, and basically say, we'll put the publishing properties on their own and we'll put broadcast on their own.
Ted Simons: So why are they doing this?
Micheline Maynard: Well, first of all, publishing has been a drag on earnings on the money that the company earn. They earn their money in two ways -- Essentially broadcast revenue, and they had earned it in print revenue in advertising revenue, but that's been dropping as we've seen the newspaper business suffer. And so essentially the feeling at Gannett is, let's put publishing on its own and see how it does.
Ted Simons: And it sounds as though as far as the business deal is concerned, what they're going to do is basically put all the existing debt over to broadcast and get kind of print off to a brand-new start.
Micheline Maynard: Right. And that's very unusual, because the other companies doing this, like Tribune Company, which is the owner of the Chicago Tribune, they do have debt going with them. And Time Inc., when it split off from Time Warner, had debt go with it. This is a pretty unusual opportunity for Gannett to start a debt-free company.
Ted Simons: Why do you think they're doing that? Was the debt that bad?
Micheline Maynard: It wasn't that bad, but it's to give them the best chance. The broadcast side can produce revenue, there's tons of revenue opportunities on broadcast, and in fact they bought all of a big website called Cars.com. And put it with the broadcast properties, which is pretty controversial, a lot of folks thought they would put it with publishing. But instead they want anything that's electronic, I guess, to go with the broadcast side, and leave the traditional publishing on its own.
Ted Simons: And they did the same with careerbuilder.com as well.
Micheline Maynard: Exactly. They put that in with broadcast, which is unusual, because there's a lot of data involved in both of those websites, and you would think that would naturally flow to publishing, but instead they're just going to have publishing and have anything else electronic on the other side.
Ted Simons: You could argue both of those websites have a great deal to do with falling print ad revenues.
Micheline Maynard: They do. In fact, I think Cars.com is one of the sites a lot of people talk about when they say why aren't there ads in the papers anymore for automobile sales. And it's because so many people shop online.
Ted Simons: So with the print side, with no debt starting from ground zero, are they going to hire more reporters, are they going to gobble up other newspapers? What's going to happen?
Micheline Maynard: We always have heard Gannett talk about the newspaper of the future. And when I worked at "USA Today" it was considered the newspaper of the future. And a lot of the Gannett newsrooms have already organized around multimedia website and print model. What we saw this week in Tennessee at the National Tennessean is that everybody has to reapply for their jobs, their jobs are being redesigned, and they're actually adding some new job categories there. So everyone is looking at the Tennessean as maybe the model for what happens to the other publications.
Ted Simons: And it seems as though even though you're a newspaper, quote, quote, a print newspaper, so many folks now get their newspaper online. Is there that much of a separation between broadcast, digital, and quote, unquote, print?
Micheline Maynard: I would like to think the students that I've taught here at Cronkite have equal skills. That the broadcast students can write as well as the print people and the print people can write as well as the broadcast people. But I think the -- For a lot of the print folks they've spent years writing so I think they would feel superior to the writing skills of broadcast, but you're correct, when news breaks, you will go to the news organization that you trust. It might be a broadcast station, it might be print, it might be something that isn't broadcast or printed, it might be just an online website. So everybody has to fight for an audience.
Ted Simons: With that in mind, the impact on shareholder value, what are we looking at there?
Micheline Maynard: So on the side of the publishing side, it's starting debt-free which is super important. Because these other publishing entities are not starting debt-free and it would be more likely that Tribune, or Time would be selling properties than Gannett at this moment in time. The Gannett folks think it's an opportunity to buy some properties because there are some regulations -- Federal regulations that keep you from purchasing community assets if you own broadcasting. Now the broadcasting is off on its own, if you're "The Arizona Republic" and wanted to buy community newspapers across Arizona, you could do that, in the old days you might not be allowed to do that.
Ted Simons: I didn't think those regulation were still in place. They still are?
Micheline Maynard: There are still limits on owning too many properties in one community. And Gannett absolutely sees this as a purchasing opportunity for the publishing side.
Ted Simons: And I understand debt-free, let's make changes, you say changes are already happening in Tennessee, maybe you hire more reporters, maybe you gobble up other newspapers. But if you still -- The print side still is problematic.
Micheline Maynard: Absolutely. So print revenue, if you look at where it's come from, traditionally the printed publication has grown the most. It's provided the most revenue. Digital advertising is very -- It's very hard to get real dollars from that. And so it's going to mean efficiency, it's going to mean working those young reporters probably harder than I had to work at the beginning of my career, and they're going to be looking at every dime and nickel that's being spent on publishing side.
Ted Simons: With Gannett as an example, but all these companies, broadcast, digital, you got your print side, supposed to be separate entities, but you know, certainly symbiotic in some sense -- How much competition goes -- What happens to journalism?
Micheline Maynard: I think first of all the Gannett -- The Gannett -- Former Gannett TV stations and the Gannett publications probably will still do some collaboration. So you will still see "Arizona Republic" reporters appearing on TV here. What I think it does to journalism is basically say, it's funny, because as teachers of journalism we're teaching everybody to be able to do everything. As these public -- as these companies are splitting. And I don't think you have to choose, but I think you have to make a bet on your future, is broadcast better for you than print is for you. And that's going to cause a lot of journalism students maybe some sleepless nights.
Ted Simons: And once they get on the print side they may have more sleepless nights unless they figure out that revenue thing.
Micheline Maynard: That's right, but what you have to remember we have lost a lot of newspapers in this country, but maybe we're down to what we're going to lose. So I'm hoping -- I am optimistic, I'm hoping the surviving newspapers in the markets are strong enough that maybe as a single newspaper they can be strong in that particular market. I don't think every town in America will have a newspaper anymore, maybe not every big city, but the ones that hang on will be stronger than they might have been without the competition.
Ted Simons: And that's a good point, because it makes me think of the idea of these media giants, they're on the web, and they're competing with everything from blogs, to other websites, and these sorts -- Will the media giants still be giants online?
Micheline Maynard: That is a very good question. And I've written for "Time" magazine, and "Time" magazine the magazine itself is a very elite product now. But time.com is updating every single hour of the day. So there's still opportunities to do the old-style printed reporting, but you better be able to do the online reporting as well.
Ted Simons: Indeed. So the future of print newspapers, still there, but still rocky?
Micheline Maynard: Yeah, there's some people that are very pessimistic and think we'll be losing a lot more publications. I don't tend to share that. I think there will be markets like Chicago, where you have the Tribune and the Sun Times, neither of which are particularly all shall strong, where you probably will see one of them go out. Will we have Chicago with no newspaper? I don't think so. I think somebody will survive.
Ted Simons: So -- And you did mention earlier some of these cities may not have a newspaper, and these could be relatively large cities W that in mind, overall, everything we've talked about, the impact on journalism, the impact on society.
Micheline Maynard: Sure. So we grew up in a society where the -- Everybody pulled the newspaper in from the front door. My nephews are growing up in a society where all they have to do is look on their phone, and there is a newspaper, might not be a publication with a name, it might be headlines they pull together. The future will probably be a smaller part of printed, a bigger part of digital and maybe some delivery system we don't know about yet.
Ted Simons: Again, as far as society is concerned, good for society, or are we losing the ability to get information --
Micheline Maynard: you know, I've traveled a lot in Europe, and a number of European cities have 10, 15, 20 newspapers. So you get a lot more coming at you. But you're still going to choose. You don't have 10 different types of cereal in your house, you probably have Shredded Wheat and Cheerios and maybe one other kind, so I think choice is great, but I think in terms of society, we still want to gravitate to the news that fits our needs the best.
Ted Simons: All right. Brave new world out there. Good to have you here.
Micheline Maynard: Thank you so much, Ted, it's a pleasure.
Micheline Maynard:Director, Reynolds National Center for Business Journalism at Arizona State University;