Bottom Line Suffers ‘Gas Attack’

By: Joe Strupp

Being a statewide newspaper is usually a plus for The Oklahoman in Oklahoma City, drawing plenty of news, readers, and revenue. But since gas prices passed $4 per gallon and are likely heading for $5, the cost of serving the entire 70,000 square-mile state is also rising.

Shelling out more for road travel and other transportation has meant taking a closer look at when and where reporters and delivery personnel go, and how they go about it.

“If we don’t have to send somebody out on an assignment, we won’t do it,” says Editor Ed Kelley. “There are things we look at [and ask], can we do this by phone? There is a little bit more of a pause today than there was even six or seven weeks ago. As far as getting on an airplane, we are not traveling as much as before ? not covering some stories or going to conferences.”

On the delivery side the story is similar, according to Oklahoman VP/Operations Pat Dennis. Distributing the paper statewide from a single printing plant, he contends, is becoming increasingly costly. “We have spent about $100,000 in the last six months for our delivery trucks,” he says, noting some of them haul the paper 350 miles each morning. “That is about a 40% increase. We are looking at many scenarios now, and we are looking at pricing. If gas remains at this level, we are going to have to look at the price of the paper.”

The Oklahoman is not alone. Many other dailies are rethinking both distribution efforts and coverage demands, with several increasing their mileage reimbursements and others pulling back on delivery areas.

“We are probably saving money because we are not covering the campaign trail like we would have four or eight years ago,” says Robert Rivard, editor of the San Antonio Express-News. Rivard says Hearst papers are sharing more campaign content in an effort to save travel and other costs. “We tend not to duplicate as much, and we coordinate more on sports events.”

The Omaha (Neb.) World-Herald, another statewide distributor, is among those that have had to increase mileage reimbursements, according to Executive Editor Mike Reilly. He says the rate went up earlier this year from 29 cents per mile to 33 cents. “We travel a fair amount around the state, and we have not reduced that travel,” he says. “We use a mix of company cars and staff-owned cars.”

The Columbus (Ohio) Dispatch also upped its mileage paybacks, boosting the rate from 40 cents per mile to 45 cents in May. “You have to make sure you have really fuel-efficient cars,” says Editor Ben Marrison, citing his fleet of 16 Honda Civics. “We have tried to have people use staff cars when they can, because we are paying for them anyway.”

Many newspapers use the standard IRS mileage rate for business expenses, which increased earlier this year from 48.5 cents per mile to 50.5 cents per mile.

Marrison notes his paper also pulled back a bit in coverage: “We are more selective on where we go and what we cover.”

At The Wichita (Kan.) Eagle, Editor Sherry Chisenhall is hoping for a dull tornado season, saying that is what sends most of her staff on long road trips: “That is the biggest wild card for us, it takes us far away. We are already over budget, but it is not traumatic yet.”

Papers have found that in many cases, skyrocketing gas costs are driving their independent carriers away because they claim they can’t make enough profit to satisfy the early morning commitment. Dennis in Oklahoma City says as many as 15% of his carrier routes are vacant at any time, up from the usual 5%.

Chip Danneker, senior director of circulation operations at The Dallas Morning News, says he is seeing a 150% turnover of carriers since November, up from about 70%. “It has basically doubled in the last six months, due largely to fuel costs.” VP/ Circulation John Walsh adds, “It is significant because it affects customer service when you have that rate of turnover.”

The Morning News began reconsidering its circulation area two years ago due partly to gas prices, but other costs as well. It scaled back deliveries to a 200-mile radius of Dallas in April 2006, then to 150 miles in February 2007. Because the paper outsources all deliveries to contractors ? who then subcontract to independent carriers ? it must pay for any fuel-cost increases under a straight pass-through arrangement.

“Our fuel cost has gone up considerably on a week-to-week basis,” Walsh explains. “We are in the process of renegotiating with contractors to pass on fuel expenses down the line to them.”

But along with hiking costs, the gas-price increases are also creating many story lines to cover. “Our coverage of the issue is through the roof,” says Editor Janet Coates of The Tampa (Fla.) Tribune. Reilly in Omaha declares: “We are trying to have a story every day on it. It is the talk of the town.”

Still, editors are concerned the negative tone of such pieces can lead to overkill, prompting many newsrooms to seek more solution-oriented angles and forward-looking stories. “At a certain point, it has a numbing effect on readers,” says Editor Mike Fannin at The Kansas City Star. “You can spin off only so many stories. You keep hitting [price] milestones. Newspapers need to shift back to the solution story ? how can people react to the problem?”

RSS
Follow by Email
Facebook
Facebook
Twitter
Visit Us
LinkedIn

Leave a Reply

Your email address will not be published. Required fields are marked *