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June 26th, 2013 AARON MESH | Cover Story
 

Black and White and Red All Over

Owners of the Oregonian gamble on the newspaper’s digital future.

lede_oregonian_3934ILLUSTRATION: Kevin Mercer
The death of The Oregonian as you know it came at 9:58 am on June 20.

That’s when reporters, editors, photographers and designers who put out the 163-year-old daily newspaper were told to “please proceed” to a large basement conference room. 

Such meetings at the newspaper—especially on short notice—are unusual at The Oregonian’s headquarters at 1320 SW Broadway. But the staff knew what it was about.

For months, there had been speculation The Oregonian’s owners, the Newhouse family, intended to cut back the publication schedule of the newspaper, rely more on its website to deliver news, and make deep cuts in staff.

The Newhouses, who own 34 newspapers through their holding company, Advance Publications, had made this same move at eight of their other papers, including The Times-Picayune in New Orleans. The company’s digital division chairman, Steve Newhouse, had signaled this was the new strategy for the entire company.

Some inside the newsroom thought The Oregonian would get a reprieve. After all, the newspaper is making a profit, and Advance’s handling of the situation in New Orleans has been considered a fiasco. Maybe the Newhouses would see Portland was different.

Publisher N. Christian Anderson III quickly dispelled this notion. 

Anderson told his staff The Oregonian would deliver papers to subscribers on Wednesdays, Fridays, Saturdays and Sundays. On the remaining days, the paper would publish only a street edition, saving millions of dollars in printing costs.

Anderson also announced layoffs. By the time he and Editor Peter Bhatia were done, sources say, almost 100 of the paper’s 650 employees had lost their jobs. The cuts fell disproportionately on the newsroom: As many as 49 reporters, editors, designers and photographers—nearly a quarter of the remaining news staff—will be gone by Sept. 27.

If the death of the old Oregonian has arrived, the new product that takes its place promises the potential for innovation—and risk—in the way much of the state gets its news.

Many industry experts say the gamble is a solid one and is long overdue—even if Advance’s particular approach doesn’t always make sense.

“They plainly believe that the print era is ending,” says Ken Doctor, who runs Newsonomics, a news industry analysis company. “They want to force the transition. It’s really a shock to the system that they are inducing. If they get this right, they win new and younger readers.”

But the kind of news Oregonians get will change. The Oregonian’s newsroom is already under enormous pressure to write stories that draw hits on the website—often at the expense of in-depth reporting that reveals what’s actually happening in the community.

Few feel this more strongly than James O. Long, an investigative reporter at the newspaper who retired in 2003 after 41 years, who was widely regarded as the dean of the newsroom.

Long sees last week’s changes as a sign the paper’s New Jersey owners can no longer be trusted, by its employees or by readers.

“Ownership has frittered away the extraordinary trust it had earned from staff over the years, simply by treating people fairly and letting them produce good-quality journalism, even if it cost them money to do that,” Long says. “You don’t feel they are doing the right thing now, but rather squeezing the last pennies out of the print papers before they go away forever.”


Anderson began his speech to employees June 20 in the company’s large Conference Room A by describing the day as “bittersweet.”

In a meeting so packed that employees spilled into the basement hallway, Anderson said the paper would become a more nimble organization.

“Today,” as he put it later that morning in an email to employees, “we are unveiling exciting plans for the future of our company.”

To do this, Anderson said, Advance had formed two new entities: Oregonian Media Group, which would oversee the move to Web-based reporting, and Advance Central Services Oregon, which would run the paper’s physical operations. The paper would eventually sell its Broadway building and move into a new space. And a number of people would not be offered jobs in the new company.

Anderson said even though subscribers would no longer receive home deliveries of print editions on Mondays, Tuesdays and Thursdays, they would get free access to a Web copy of the paper called “MyDigitalO.”

But those present say he declined to answer a question from tech reporter Mike Rogoway about the business sense of the new digital strategy.

“He wasn’t able to answer questions about why we are doing this, other than saying that we need to embrace our digital future,” says a reporter, who requested anonymity. “He wasn’t doing a very good job of selling that.”

Anderson also declined to comment when WW asked him the question. “We don’t have any comments on the specifics of the financial model,” he said by email, “except to say that we will remain profitable.”

An hour later, Bhatia followed Anderson’s announcement by telling the newsroom that some editors would now be called “managing producers.” Bhatia’s new title would be “vice president of content.”

And Bhatia acknowledged the initials of Oregonian Media Group formed the abbreviation OMG. Someone in the back of the room cracked, “At least it’s not WTF.”


The Oregonian that readers have come to expect over the last two decades was born of embarrassment.

In 1992, the newspaper knew about—and failed to report—allegations of sexual misconduct by then-U.S. Sen. Bob Packwood (R-Ore.). The Washington Post broke the story instead, which led to Packwood’s eventual resignation and humiliation for The Oregonian.

Fred Stickel, then The Oregonian’s publisher, understood he needed to shake up a sleepy newsroom.

He did it by hiring Sandra Mims Rowe as editor in 1993. In many ways, Rowe spent her way to success: She eventually doubled the size of the newsroom to well above 300.

But she also brought a new swagger and ambition to The Oregonian, demanding excellence and insisting the newspaper find ways to get better all the time.

In 1999, business reporter Richard Read won the paper’s first Pulitzer Prize in 42 years by following a shipment of frozen french fries from Eastern Oregon to Asia. Under Rowe, the paper went on to win four more Pulitzers and have eight other finalists for journalism’s top award.

Employees also enjoyed a remarkable protection under Stickel known as “the pledge”: No one would ever be laid off for economic reasons.

The pledge was first made to Oregonian employees to keep out unions—the Newhouses broke the unions at the paper in the early 1960s. It soon spread to other Advance newspapers. 

Like many papers, The Oregonian was slow to recognize the potential of the Internet and the perils it would pose to its revenues. But Advance did act early by founding oregonlive.com as a separate company in 1997—splitting online business from print, and keeping control of the Web in New Jersey.

In 2007, the U.S. economy went into a recession that collapsed print advertising and prompted newspapers to begin a steady stream of layoffs (WW included). 

By some estimates, The Oregonian’s revenues fell by as much as one-third within two years as display advertising faded and classified ads—by that point still representing about a quarter of the company’s revenues—all but vanished.

The Oregonian resisted layoffs, in 2008 offering generous buyouts to long-term employees, an expensive move Stickel believed was his moral duty given the pledge The Oregonian had made.

But in 2009, Stickel, then 87, retired. Rowe soon followed him out the door.

That left Rowe’s longtime deputy, Bhatia, and a new publisher, Anderson, a native Oregonian who’d previously served as publisher of The Orange County Register. In February 2010, Anderson and Bhatia laid off 37 employees, mostly in the newsroom.

No more jobs for life. “It was the end of the solemn promise,” says a former Oregonian reporter. “It was incredibly painful.”


Meanwhile, Advance Publications was working on a bold strategy. In 2009, it ended daily print publication of its newspapers in eastern Michigan, including The Ann Arbor News, and put all the news on the papers’ websites.

Then last year, The New York Times broke the news that Advance was trying something even larger: It was ending daily publication of The Times-Picayune in New Orleans, a paper the company’s founder, S.I. Newhouse, had purchased in 1962. Along with the change came deep cuts in the newspaper’s staff.

The decision brought jeers from most corners of the news business and particularly in New Orleans, which had relied on the newspaper’s heroics during Hurricane Katrina in 2005 (see “Letter From New Orleans,” below).

Steve Newhouse, chairman of Advance’s digital wing, defended the strategy last August.

“We are in the midst of a digital revolution, and instead of constantly being disrupted by our numerous online competitors, we decided to reinvent ourselves,” Newhouse wrote on poynter.org.

Meanwhile, The Oregonian’s newsroom watched Advance cut publication days at other papers.

“We knew it was coming,” says a reporter who was not laid off last week. “You talk about it in theory—about how you just want it to happen and end that bubble of uncertainty. But then when it happens, you just want to go back and live in that bubble of uncertainty.”


Bhatia handled all but two of last week’s newsroom layoffs himself.

One by one, reporters who faced losing their jobs were summoned to Conference Room C in the paper’s basement so Bhatia could deliver the news.

Bhatia told staff he alone decided who would be laid off, and that employees had been judged using a metric that graded each person on whether they fit into the paper’s new digital strategy.

Bhatia tells WW that his grading tool considered several factors. “Digital was one, so was journalistic impact and skill,” he said by email. “In the end, I had to make difficult judgments about people I admire and respect.”

That online emphasis has already begun at The Oregonian. Staffers say the newsroom has become obsessed with a program called Parse.ly, which measures real-time Web traffic, shows which stories are getting the most hits, and identifies where readers click after finishing those stories.

Veteran reporters who did not get laid off say Web traffic trumps other yardsticks, to the detriment of deeply reported explanatory stories for which the paper is known.

One reporter cites a recent profile of a city sewer worker accused of abetting terrorism in Pakistan. The paper sent reporter Kimberly A.C. Wilson halfway around the world to get the story. But the story got little traffic, and some editors noted it didn’t resonate on the Web.

“In this environment,” the reporter says, “when you are fearful for your job, who is going to do basic nuts-and-bolts reporting when the message is you can get canned for not bringing in enough hits?”

Bhatia says that’s not true.

“I don’t know who those editors are,” he says. “Kimberly’s work was fantastic.”

The layoffs included editorial writer and columnist David Sarasohn; home and garden reporter Bridget Otto, daughter of ex-publisher Stickel; and commentary editor Liz Dahl, Bhatia’s wife.

Several of Bhatia’s decisions struck many in the newsroom as heartless. Among them: He laid off a husband and wife, veteran editors Randy Cox and Joany Carlin, despite knowing Cox is fighting advanced kidney cancer.

Cox and Carlin declined to comment. Bhatia says the decisions were gut-wrenching. “Our newsroom is a family of outstanding journalists and people,” he says. “I agonized over every decision.”

The layoffs also included environmental reporter Scott Learn and Bill Graves, who had recently moved to editing after covering education and poverty. Learn’s and Graves’ work was once The Oregonian’s definition of success: in-depth stories that regularly appeared on the front page. (“I think they’ll hire a new person who’s better at online stuff than I am!” Learn replied on Twitter to a reader indignant over his layoff.)

“The decisions seem ruthless,” says Dan Hortsch, a retired reporter and editor who worked at The Oregonian for 41 years. “It just seems so cynical to say, ‘We’re replacing some well-known names, but we’re going to replace them and do the same quality journalism.’ There’s just no way to do that.”

Some of those laid off were sanguine.

Sports reporter John Hunt tweeted that he was flying home from covering the Oregon State Beavers in the College World Series in Omaha, Neb., noting, “I’ll be fine, especially if I can hit a Chick-fil-A on the way out of town.”

Music writer Ryan White composed a farewell message online. “Yesterday, a lot of good, talented people—friends—were laid off, an act I always suspected wasn’t as gentle as it sounded,” he wrote. “I was right.”

Charles Pope, The Oregonian’s former Washington, D.C., correspondent, linked to White’s post with a tweet: “This is the graceful, evocative, wonderful writing The Oregonian is losing. Screw you Little Stevie Newhouse.”


In the days since he dropped the ax, Anderson has pledged that The Oregonian’s new digital focus will make the paper stronger.

Industry experts say Advance is actually making a necessary move—changing a lumbering institution that faces a ceaseless decline in print-advertising revenues, in order to shore up oregonlive.com, which has gained a corner of the online market much as The Oregonian once dominated the regional print business.

“I would scoff at its obituary,” says Owen Youngman, Knight professor of digital media strategy at the Medill School of Journalism at Northwestern University. “It will change, but it has not died.”

Youngman says the financial motive for Advance’s decisions is clear—Monday, Tuesday and Thursday print editions have long been a money loser for most newspapers. “Any product that costs you 25 cents to make, and it only brings in a dime—how long are you going to produce that product?” he asks. 

Newsonomics analyst Doctor says The Oregonian’s decisions may have saved as much as 25 percent of its costs.

But both experts say Advance is bucking the conventional wisdom of American newspapers in how to make money on the Web. Many, including The New York Times, have tried to get readers to pay more—via online paywalls or higher subscription prices. 

Instead, the Newhouses have decided to stake The Oregonian’s fate on advertising—both print inserts and digital ads.

“They have waited and waited and waited—and then rushed,” says Doctor. “It’s a leap into darkness, in terms of how you’re going to make money. But they have focused the whole company on seizing that future. They knew the old way wasn’t working.”

Advance has already moved several of its papers away from daily printing, including The Times-Picayune, The Post-Standard in Syracuse, N.Y., and several in Michigan.

But in March, Columbia Journalism Review found the newsrooms of those papers have been packed with inexperienced staff instructed to post quickly and often, with an emphasis on stories that will draw Web traffic.

Three days after the layoffs were announced, Oregonian Media Group began posting job openings. The positions included a general assignment reporter and a content data analyst. No salaries were listed. The responsibilities for the reporter job included “story aggregation and topical link-posting” and “elevating comments into new posts when appropriate.”

The Oregonian has not announced what its new subscription rate will be, but Anderson has already reversed one change: The new online paper will not be called MyDigitalO, a name that quickly generated laughter about the unintended sexual connotation.

When asked by WW what readers of The Oregonian should expect the future to look like, Anderson quoted his own June 23 editorial.

“Digital journalism allows us to tell stories in new and powerful ways beyond ink on newsprint, and we will take full advantage of the tools we have and will have,” he wrote. “Journalism that fully serves communities transcends the medium.” 


[To read an account of what happened to the New Orleans Times-Picayune after a similar move by Advance last year, go here.]


WW reporter Nigel Jaquiss and news interns Katie Gilbert and Ann-Derrick Gaillot contributed to this story. 

 
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