Audit Notes: New Orleans newspaper intrigue, NYT numbers, CNET

The Manships are in talks about selling The Advocate

Baton Rouge’s Manship family threw a wrench in the Newhouses’ plans for the Times-Picayune when they launched a daily New Orleans edition of The Advocate back in September. The Newhouses struck back with a Baton Rouge edition three days a week.

Now, the Manships are in talks with New Orleans businessman and failed political candidate John Georges, who wants to buy The Advocate. That adds some extra intrigue to the Louisiana newspaper war, although Georges says he expressed interest long before the Picayune was gutted.

Georges said he approached Capital City Press 18 months ago about buying The Advocate…

Georges said his talks with the Manship family, who own Capital City Press, were put on hold for several months while the daily New Orleans edition was launched.

“I love spending most of my time in New Orleans and it saddened me what happened with The Times-Picayune,” Georges said. But talks with The Advocate were re-engaged at the end of 2012, he said.

Georges tells The Advocate he wants to buy it for his kids, and gives the paper this unlikely quote:

“The newspaper industry is cool, digital and current,” he said. “It’s more suited to their skill sets and generation.”

Georges doesn’t want the Manship’s TV station. The big question is whether he wants to compete with the Newhouses in New Orleans.

— Margaret Sullivan, The New York Times public editor, has a nice piece on the rising importance of subscription revenue at the paper:

In 2012, something remarkable happened at The Times. It was the year that circulation revenue — money made from people buying the paper or access to its digital edition — surpassed advertising revenue. That’s an upside-down and through-the-looking-glass situation for newspaper economics. For many decades, print advertising has been the big moneymaker.

When that milestone was reached last summer, Jodi Kantor, a reporter, celebrated it on Twitter: “For years folks have asked who will save the N.Y. Times. Now we know: our beloved readers. Thank you from one reporter.”

But this is a bit off (emphasis mine):

And there was cause for celebration. Digital subscriptions, begun the previous year, were looking like a success story; print circulation losses had slowed. But there was a dark side, too: the continued loss of crucial print advertising. In last year’s third quarter, operating profit was down by 60 percent from a year earlier in The New York Times Company’s newspaper group, which also includes The Boston Globe and The International Herald Tribune. The culprit? Print advertising continued its downward spiral, dropping by 11 percent, and nothing in the digital world — neither advertising nor subscriptions — was coming close to making up the difference.

But it was close to making up the difference.

At the Times, revenue was down just 0.4 percent in the third quarter, and increased circulation revenue more than offset ad declines, by $1.3 million. At the NYT Company overall, revenue was down 0.6 percent in the quarter, as ad declines outpaced circ gains by $1.6 million. Not good, but pretty close to even, particularly given the pace of pre-paywall declines. To be fair, not all of that circulation revenue increase was due to digital-only subscriptions. But the point of the leaky paywall is to shore up print circulation too.

And it was cost increases, not revenue declines that were responsible for most of the decline in operating profit in the quarter. Costs were up $10 million from the year before “due to higher benefits costs, performance-based compensation costs, stock-based compensation expense and costs associated with higher commercial printing revenues.”

Jim Romenesko reports more on CBS’s CNET fiasco, reporting that morale has taken a huge hit at the tech news and review site after CEO Les Moonves interfered, gratuitously, with its editorial operations. CNET had been about to give Dish Network an award for a product its corporate parent is suing them over:

There had been hints around CNET that the edict might be overturned. During a meeting last Friday, Reviews editor-in-chief Lindsey Turrentine sounded optimistic. “The sense of her presentation,” says one staffer, “was that while there were still a few sticking points, overall the CBSi [CBS Interactive] team had made good progress making a strong business case to CBS corporate for overturning the policy. …Every indication was that the discussions were going well.”

But two days ago, CBS Interactive president Jim Lanzone and CBS Interactive general manager Eric Johnson announced the bad news at their meeting: There would not be a policy reversal.

“They proceeded to tell us it was no big deal,” says a CNET employee. “But people kept bringing up different hypotheticals” and it became clear that it was a big deal.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,