Shoptalk: A Disturbing First

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By: Mark Fitzgerald

In the Twin Cities, the Star Tribune was always the real pioneer. Name an industry trend over the past four decades, and chances are the Minneapolis paper was among the first, if not the very first, to experience it. From restructured newsrooms ? run by people who, it sometimes seemed, were called anything but “editor” ? to editorial/business “partnerships,” to its recent experiment in “editing for experience,” the Star Tribune was willing to try strategies that were easily and often mocked at the time, but that ultimately were embraced almost universally.

So when it becomes the first flagship paper in recent memory, or perhaps ever, to be kicked out of one of America’s largest pure-play newspaper chains for the most prosaic of financial reasons ? to create a tax loss ? attention must be paid. At a time when everyone in the industry is speculating about publicly held chains breaking apart and private money rushing in, here comes the Star Tribune’s sale to a private equity firm new to newspapers. Is this paper once more a harbinger of changes in the industry, or simply a bystander at the scene of a freak accident of economics?

The circumstances that surround the dumping of the Star Tribune are unusual, to be sure. The McClatchy Co., facing a big tax bill as it digests the 20 Knight Ridder Inc. papers it is keeping, sold the paper for a mere $530 million to Avista Capital Partners (see p. 8), and picked up a $160 million tax write-off in the process, with a very low EBITDA. McClatchy CEO Gary Pruitt said this biggest paper in the company was its worst- performing. That was quite a change in tone from a chain that just eight years before spent $1.2 billion to buy the last jewel among the Cowles family’s dwindling newspaper holdings.

“That disparagement is interesting, because I know when they bought the paper the profits were much higher, and the figures I saw before I left were far greater,” Tim McGuire says from his new digs in Scottsdale, Ariz. “Something has happened in the those five years.”

McGuire is the recently appointed Frank Russell Chair for the business of journalism at Arizona State University’s Walter Cronkite School of Journalism and Mass Communications. But for 10 years (from 1992 to 2002), McGuire was editor of the Star Tribune, and for a dozen years before that he was managing editor, starting at the old pre-merger afternoon Star.

Of course, in the typical way of the Star Tribune, McGuire’s title wasn’t always just editor. For a while in the mid-1990s, he headed what the paper called its “reader customer unit.” The idea ? conventional wisdom, now ? was to pay attention not only to the content the reader was getting, but the circulation service as well. Another title he had was “partner.” The paper, which at the time called itself “Star Tribune: Newspaper of the Twin Cities,” was run by the publisher, with a partnership of the editor, production director, and advertising director.

The beats changed, too. Look at old editions of the E&P International Year Book and you’ll see such titles as “urban landscape reporter,” “social issues-giving reporter,” and the Brave New World-ish “social issues-children/mindworks.”

Lou Gelfand, who retired a few years ago as the nation’s only reader representative who also was a Newspaper Guild member, says the newsroom never took those titles particularly seriously. “It was a big yak,” he says. “You know how newspaper people are, they’re pretty caustic.”

Yet the idea of a flexible newsroom not only prevailed at the Star Tribune, it spread throughout the industry. And some of the beats that sounded hopelessly faddish at the time ? like “faith and values” or “family life” ? are now ubiquitous.

That tradition of innovation goes back to the 1950s and beyond, McGuire says, because the Twin Cities demanded it. “It all starts, in my view, with the fact that the paper is in a very sophisticated market, one of the most sophisticated in the country,” he says. Its editors “all felt that you had to be pushing the envelope all the time, that you had to be the best. Minneapolis and St. Paul deserve experimentation and innovation. They deserve the best and most sophisticated product that publishers and editors can produce.”

Business performance made editorial experimentation far easier in those days. Between 1991 and 1998, classified revenue, for example, grew an astounding 400% or so, according to McGuire. The subsequent secular collapse of print classified has hurt the Star Tribune particularly hard.

But the big problem the Star Tribune faces now ? one that other papers undoubtedly will face as well ? is whether the new ownership model will provide the resources the paper needs to perform at a constantly innovating level. Because, McGuire notes, the audience is not going to get less demanding: “That’s what scares me in this time of tumult and change.”

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