The hugest bite came in 1996 with the $3.4 billion purchase of the West Group, a Minnesota giant with 10,000 Internet databases in the legal field. The final move came just months ago when Thomson sold its British travel group, airline and all, pocketing $2 billion. Analysts looked askance at the West price; some said it was twice the true value. But that was straight out of the proven Thomson formula: Buy high and start milking. West, says Thomson, was paying a profit in its second year.
By the time all the billions had gone back and forth and the dust had settled--at least, the company said it had settled--the Thomson Corp. had transformed itself into a $6 billion colossus for the Information Age. Understand this: The product was information, not news; or, at least, information with a minor in news. Thomson now sold data--data to lawyers, data to doctors, data to bankers and accountants and securities advisers, data to anyone who needed data in the age of data.
The information could be as dull as the old newspapers. But if you were a lawyer who needed a court decision, a pharmacist who needed a quick hit on drug cross-reactions, a car repairman who needed an auto-parts list, Thomson was the information peddler for you. How about the specs on an Aegis Guided Missile Destroyer? All yours, for $1,000 and an online subscription to Jane's Fighting Ships, part of the Thomson portfolio. Information turned to gold as surely as those $10-a-whack commercials and that stuff that surrounded the news. Lord Cyberspace, they now called the son of Roy. Last year all that information sold for $4.77 billion, with a profit of $1.25 billion. Just like the old days.
Meanwhile, what was left of the U.S. newspaper group had altered dramatically, too, in large part because the face of small-town America was changing. The Wal-Mart Effect, newspaper analyst and AJR columnist John Morton calls it.
If American newspapers had yielded to the voracious appetite of the chains, so had American retailing. Home Depot ran the local hardware stores out of business, Office Depot the downtown stationery stores. Wal-Mart drove under small businesses right and left. The changes eroded the small-town advertising market in an irreversible way. National firms used national advertising companies and they didn't focus on Opelika, either.
"There's no such thing as national advertising in local papers anymore," says Publisher Frank Wood in Fairmont. "We don't get airline, liquor, tobacco--any of it--the way we used to. A Detroit ad for Ford comes now through the local Ford dealer if it comes at all." Looking at the ad-news ratio in small-town papers brings the phenomenon into stark relief. The ratio used to be 60-40--60 percent ads, 40 percent news. Any local newspaper that can get 40 percent now considers itself riding high. But the 40 is ads.
"In effect, the Wal-Marts became national advertisers, too, not entirely but to some extent," Morton says. "Why advertise when everybody knows you are there and you are the only game in town?"
At the same time, a bold new player in American journalism, USA Today, enhanced the Wal-Mart Effect. At first it drew snooty scoffs from the media elite and didn't abscond with that many local customers. But it came sneaking into Thomson towns with all that color and circus makeup and a bold weather map straight off the tube. The news, at least at first, may have tasted like airline food, but it was far better fare than Thomson was serving.
The quality problem deeply embarrassed many Thomson executives. It wasn't easy for a CEO, as the Thomson Corp.'s Michael Brown did in 1993, to call one of his most public products "cruddy" and concede that "Thomson Newspapers has a reputation well-deserved for very poor quality." Brown was nearing retirement and trying to steer the corporation through drastic change. It now considered advertising-based publishing too vulnerable to economic cycles. Subscription-based publishing--those databases and the heady future of the Internet--became its new rap. As for newspapers, once Thomson's raison d'Ítre, the dilemma was daunting. To stay in at all, Thomson had to shape up and cut costs.
The corporation looked for the cost answer in something it called Strategic Marketing Groups--or clustering (see the Business of Journalism, September). The idea doomed the far-flung empire. No more lonely outposts. Now the goal was to cluster half a dozen properties in one tight region. The press in Logansport could also print the paper in Kokomo (conveniently gutting the union in Kokomo as well); the advertising manager in Anderson could oversee the accounts in all of central Indiana. Larger advertisers could make regional buys at discounts, partly neutralizing the Wal-Mart Effect.
By 1998 Thomson had reduced itself to nine clusters in the United States, plus a handful of still vulnerable "floaters." Thomson was not the first to try clustering, but it was among the first to bet its future on it. Soon most chains were in the game, with a wild flurry of sales and swaps and players to come. They were like kids with old bubble-gum cards: I'll trade you three Pennsylvanias for a Wisconsin and a Maine.
Improving editorial quality without spending money was a more formidable task. "We saved $200,000 in pressroom waste in central Ohio," rah-rahed Ellen Stein Burbach, vice president for readership development, at the Orlando conference. "If you can do that, we can put two more editors or reporters out there." From the looks on their faces, few of the editors in the room saw staff expansion in their future.
Still, newsroom improvement became the clarion call under the man running Thomson Newspapers during much of the upheaval, Richard J. Harrington. He was an unusual patron. An accountant, he had never worked in a newsroom and described himself as "a marketer and salesperson who can count." But not all analysts were convinced that Thomson intended to stick with newspapers. In its 1996 annual report, Thomson boasted that "advertising represents only approximately 10 percent of our total revenues." Some viewed the retooling as a way of dressing up the newspapers' profits for a richer sale down the line.
Still, when Harrington moved up to replace Brown as head of the parent group in 1997, he immediately hired a man with 24 years of experience in newsrooms--albeit all on the other side of the Atlantic. Hints that Thomson saw light in the British way predated the arrival. As early as 1993, a Thomson newsletter that provided monthly performance prods to its newsroom chiefs heralded:
Bold, Brash Newspapers Sell: We Could Learn a Few Things From Our British Counterparts
The chance arrived with Stuart Garner, 54, the former managing director of two British newspaper chains and a man who has worked at virtually every job in a British newsroom.
Dispelling rumors that Thomson secretly intended to abandon the newspaper business came high on Garner's list: The upheavals of the '90s made the Thomson Corp. "unequivocally an information and publishing company," he insisted in an internal memo, and that should lay to rest "any lingering suspicions that Thomson is getting out of newspapers."
Garner is a cocky fellow with sprightly ideas. In the field, however, the reaction is mixed. One reporter, angry about the escalating trend at his paper against covering "boring" government stories, blames Garner. "He doesn't understand the First Amendment, the Second Amendment or any of the amendments," the reporter complains, although, in fairness, the trend had invaded newsrooms long before Garner came ashore. Bill Sternberg, the former Washington bureau chief, calls him a "very bright, sharp guy," but worries about his lack of background in gut issues for the American press. Garner, he says, "strikes me as someone who doesn't know what he doesn't know." But his editor in Manitowoc, Gerald Guy, just grins and points to Britain's invasion of American magazines and its inroads into New York publishing. "One if by land, two if by sea, three if by Thomson," he says.
Actually, the best insights into Stuart Garner may be in far-off Mesa, Arizona, in the low, stucco-dreary suburbs of the flat valley east of Phoenix. There Thomson Newspapers is trying its most adventuresome and out-of-character experiment.
The drive toward Thomson's new suburban enterprise, the Tribune, is string-straight into Mesa through an endless bazaar of sun-bleached and sand-blasted one-story buildings--two stories would be a skyscraper. Local entrepreneurs tout their wares in tried and true fashion: Lulu's Taco Shop..Metropolitan Mattress..PETsMART..Airtouch Paging..Payday Loans Checks Mortgage Senior Day.
The newspaper office is two right turns off Main Street, at 120 West First Avenue, a modern brick building that is unexpected testament to permanence and lined in front by newsracks. Harry Caray is dead and you discover it in 72 point: So Long Everybody, the trademark words of the grand old man who broadcast major league baseball for a half century and Chicago Cubs games for 16 years. Caray was a folk hero here, for Mesa is the spring training ground for everybody's favorite loser.
It is not quite 8 a.m., a thoroughly uncivilized hour for a morning publication, and the newsroom already is abuzz.
"To hell with e-mail!" comes sudden thunder from the corner. The accent is British neighbor boy, steam-pressed only slightly by several years of overseas living. This is Alan Geere's way of calling the first meeting of the day.
Phil Boaz, 39, the city editor, who had been lost in his story budget, finds Geere angled at him ominously over a video display terminal.
Boaz was here when Thomson Newspapers arrived two years ago. The irrepressible, unyielding Brit showed up shortly thereafter. "At first we thought we had one foot in the grave," Boaz will tell me later of the Thomson development. Of Geere: "A lot of us wondered, 'When is this son of a bitch going to leave?' We knew he was going some day. Now I think we will regret it. I am a convert."
Not so with everybody. "A lot of people show a lot of affection for Alan," says one of his reporters, who requests anonymity for reasons that seem fair. "But Alan's a company man. If he was a first sergeant in Vietnam, he wouldn't be a grunt sergeant. He's the guy who sends you out. He knows who is promoting him."
Thomson picked up the five East Valley papers--Mesa, Scottsdale, Chandler, Gilbert and Tempe (also served are Ahwatukee and Apache Junction)--from Cox in 1996. The package also included a floater in Yuma, Arizona, the hottest place in the country if not the hottest deal. Thomson merged the suburban papers and prepared for war with the Arizona Republic, the Phoenix metro whose reputation often suffers as much as Thomson's. So far, most of the shots have been over the bow. But the changes inside the building on West First have been dramatic nevertheless.
Gone is the old meandering suburban pace. The Tribune has a snap to it now, an unpredictability as well. It is far more metropolitan than other Thomson papers--it covers major league baseball. But readers also awoke one morning in July to, of all things, an all-good-news edition--right down to the logo, the Good News Tribune. The harsh realities of the news day were not allowed to spoil the event. A burning cruise liner off Miami demanded its place. The headline became: All Aboard Survive Cruise Ship Fire. The changes have been pure Geere, a man so full of contradictions and energy and ideas and push--"He has people running around like rats on amphetamines in a coffee can," says one--that he totally dominates the scene.
"I'm a hired gun, simple as that," Geere says. "You hire me, I'll go." One hire took him to Romania, where the European Community sent him to instill Western journalistic principles in newsmen and women emerging from the dark. Early on, he sent 10 reporters out to cover a fire at a chemical factory and they came back with 10 different stories. "I knew I was in trouble," he says. "They had all made their stories up. No official had ever talked to them in the old Romania, so this is what they had always done. I failed miserably."
Geere has not done that here, although sometimes the endless spew of ideas is the bane of his troops. He has sent reporters out into the street, with photographers, to interview women about the contents of their purses. To the reporters' looks of you're kidding, his return stare says: Don't you get it? If you can do that, you'll be able to knock on the door of a woman widowed only an hour.
"At first, I thought we were going to be an English tabloid," says Boaz. "But that wasn't it. He was teaching us."
Whether the eclectic thoughts of Alan Geere are an advance for the cause of good journalism is your choice as well as mine. The Tribune is still more meringue than pie.
The 8 a.m. meeting is a dawn patrol, with Boaz deploying his first troops--"launched" is his term. By 10 the day's work is serious and the outlines of tomorrow's paper take form. Geere and his editors have moved to the conference room, where no news meeting is conducted without the phone hookup to the Scottsdale bureau. Scottsdale is the plum in the group--chic, upscale, so rich with advertising dollars that its zoned edition is done artfully enough that most locals think it is a separate paper. Since Orlando, the meeting doesn't go on without the circulation director. Mike Romero is smart enough to hang back from the table just a bit.
The meeting takes on an Alan Geere buzz. There's pie today. News.
A follow-up on a messy freeway fatal has a good Arizona twist. "The kid's father is in the witness protection program," Hal DeKeyser, the Scottsdale editor, rasps over the speaker phone. "Don't know what we are going to do about that..."
Bob Satnan, the news editor, is antsy. Washington is threatening to go to war with Saddam Hussein again. Let's get past this Mickey Mouse stuff...
Boaz: "We've got a 79-year-old man, he went out to pick a grapefruit in his yard before bed. They found his truck burned out this morning. He had been forced to use his ATM. They're dragging the canal..."
Boaz has an Arizona bright: A good Samaritan found a thousand dollars in a purse and walked it back to its owner. Who stiffed him.
DeKeyser by phone: A holdup man has stolen 57 Rolexes from a Scottsdale jeweler.
Jim Ripley, the managing editor: "What does a black-market Rolex go for? Ten percent?"
DeKeyser: "I dunno. We're checkin'."
Geere has been listening silently. Now he interrupts, backtracking: "Do we have a clue from the police about the missing man? You know, 79-year-old man goes out to pick grapefruit, never seen again?"
The words clatter across the table like direct orders from Patton. By the end of the day two reporters and Boaz himself will knock on the widow's door--training pays off. Geere will drive to the scene himself, purely out of curiosity. "God, it's a green house," he says. "No one will pick a grapefruit from that tree again. Was it pink or white?" By morning the story will become the page-one centerpiece with two color photos, two maps and words from the widow. Iraq will be below the fold.
As the news hands leave the room, Geere motions to Romero to stay behind--a holdover from Orlando. He's going a mile a minute now, wants to set up a promotion with Arizona's new major league baseball team, the Diamondbacks. And then Iraq. He goes so fast he sometimes seems to lap himself. "We need to get ready for this war. Who are we going to sell to? Where are we going to make some money?" He hits the brakes like a truck in a red-light intersection. Romero doesn't get the pregnancy of it. Make money off the war. Geere has run right over his foot. And he knows that I know that he knows. Suddenly, I think that he may be the only person in two months who realizes what I have been doing. Listening. Reporting. Writing things down. The chores they all do. Joan Didion's classic line about reporters runs through my mind: "People tend to forget that my presence runs counter to their best interests." He clearly has a similar thought--and I feel bad, good grief. This effervescent man has caught me up in his whirling orbit, too. Then I watch his face change, fatalistically. Sauce for the goose... And he moves quickly on, a man full of an adrenaline mix of ideas, good and bad, soon to be yesterday's news, no cheers or jeers. He also is the only one in two months who invites me home for dinner.
Geere lives out a desert road, up a desert cul-de-sac to a solid American house with a patio that's just about a hacker's drive down a dry desert fairway. It is a Sunday afternoon and, incurable, he shouts not-always-welcome coaching to the golfers as they skitter by, some with shots that ricochet dangerously near. The address--on Western Skies Drive--seems chosen for the friends back home in Essex, where he started this work at age 18 taking names at funerals.
Geere cooks dinner and talks about the craft. He can be philosophical in every direction of the compass. Conventional wisdom is not his forte. But these days when editors tend to be the most conventional people in town, he is, if nothing else, refreshing.
"A lot of people don't understand what is going on because the world is moving so fast," he begins. "We are hooked on instant deadlines, filing stories on the Internet Web site because we can't get it off the press till tomorrow morning. Papers are all going a.m. for various reasons, yet working women don't have time to read a paper in the morning. Working women are absolutely time-starved. So they read it when they come home from work. So we are filing stories on the Internet to get an even break with the electronics and, in reality, nobody has time to read it till 24 hours later anyway."
Or: "British newspapers are so different. Fewer staff. Produce more. Work on six-month contracts. Journalism is not viewed as a calling. You're only as good as your last story."
And then he enthuses: "Newspapers have been so good to me. I've lived the most exotic life, like a sports star. I go places, I do things other people can only dream of. No one owes me anything. This business has given me everything."
He knows he can be gone at any minute. "I'm only here for as long as I'm good." Then he'd hire on somewhere else or go back to writing, freelancing, spinning for a living. He made a good living at that, too. He describes the freelance piece that earned him the most money of all:
"It was a story about a man who cracked walnuts with his bottom."
Back at the office the next morning, circulator Mike Romero tries to look into the future. Suburban journalism in this kind of area is hard work. The place is booming, transient, a winter sun-lover's economy, with a powerful metro that is spending millions trying to protect the growth area around its core. Romero has to deal with a "churn" of 130 percent a year--that means 130 percent of his subscribers turn over each year. You get, you give, you get back. It's all very costly. The cost of one churn is $17.50. With an average yearly circulation of 96,000--it soars to a high of 118,000 in the winter--the churn rate alone can cost the Tribune several million dollars.
Romero thinks Thomson is giving the Republic a run for its money. And, indeed, the Republic has been diverting troops as well as dollars to the suburbs. The metro is holding its own in and around the Phoenix city line, including a still-strong grasp of prosperous Scottsdale, but its position weakens as the sprawl moves east into the desert--Tribune country.
"We've got 45 percent penetration in Apache Junction," he says, then grins. "But that's halfway to New Mexico."
Romero, like any good circulation man, knows how to grub for readers. He works the trailer parks, works the trailer park owners to work the "snowbirds," the retirees who flock here with the sun. Almost 40 percent of the Tribune's readers are snowbirds. He has to go for them anew every year.
"By tax day they are gone," Romero says wistfully, "and this becomes a very dead place heading into a hot summer."
Fifteen hundred miles to the northeast, which places you pretty much in the heart of the country, Thomson has no walls to tear down. When the receptionist at Logansport's Pharos-Tribune says, "Just a minute, I'll see if she's here," that is exactly what she means. She can cast her eyes right over advertising and circulation to the newsroom rows. The office of the Pharos-Tribune is one medium-sized room.
Arriving in Logansport, Indiana, which requires you to cross the Wabash River where it intersects with the Eel, is about as close as you can come to stepping into yesterday. That's the way the Pharos-Tribune, circulation 12,000, looks at it, too. Proudly serving the farm counties of Carroll, Cass, Fulton, Miami, Pulaski and White, this Thomson paper has the look of a weekly that comes out daily and Sunday, printing every gram of news to do it.
"People complain there is no good news in the paper," says Margo Marocco, 56, who has reported here for 33 years. "I have never understood that. The fact that babies are being born, people are getting married, the school board is meeting--that's all good news and it's all in our paper."
So it is--along with column after column of calendar events, hospital notes (even admissions are news), funeral notices, area briefs and columns that pitch the past: "Where Are They Now?" and "Time Traveler."
Marocco is a copy editor who also handles the wire. After all these years, she has opinions--and one is that she just can't understand the newspaper's new policy on obits. Charging people--$53, at that--in their moment of grief. "That didn't go over well at all, I'll tell you. We've had some pretty strange results, too. I mean, people have been survived by their dogs."
What would happen if the mayor died?
"Now, I hadn't thought of that one." Marocco's face turns from a frown to an impish smile, no offense to His Honor. "Fifty-three dollars, I guess."
This place marches to a far different drummer than the one pacing the Alan Geeres. Thomson bought the Pharos-Tribune three years ago during the Strategic Marketing Group shuffling. Most of the reporters think the paper has been playing more softball since then. The executive editor and publisher, Dollie Cromwell, a whiz-kid arrival at 33, is immensely popular but an unabashed booster. "The city council and the school boards have internal conflict," Cromwell says. "Everybody knows it. I don't want to feed the fires."
But, if you are willing to get up very early in the morning, the way farm folk do, you find that all is not lost. That's when Kris Baker, 21 years old, moving double-time in her jeans and running shoes, starts the cop-shop run--6 a.m. in the summer, 6:30 in the winter.
Baker ran out of money and was forced to drop out of communications school at DePauw University after a year and a half. Now she uses her Thomson salary--she got a second-year raise to $9.73, an increase of 37 cents an hour--to repay her school loans and continue with night classes at nearby Indiana University at Kokomo. Her aspirations point toward the big city, but she is staying for the time being. Her father, who is into soybeans and corn and is now "doing cows and pigs," has been ill. It's not a good time to move on.
She flutters through the reports, pencil in hand--not a big news day, even by Logansport standards. Car hit by egg, reads one complaint; carpenter's level stolen off the roof of the Hard Times Custom Cycle, reads another. The egg caper will not make the paper. The stolen carpenter's level will, as will the damage that Frederick T. Weese did to his wheel and bearings hitting a pothole near the train tracks.
"Anything else?" Baker asks crisply after getting to the bottom of the basket.
Baker wears a shield of farm-girl shyness. But there is no straw in her hair and the disguise is as good as the one worn by her unknown soul mate in West Virginia, Theresa Haynes. "Sometimes they just withhold them," she says as she moves down the hall. So she lays booby traps behind her, almost invisible pencil marks in the corner of each report. Every few days she goes back through the old reports, thumbing the corners till a corner comes up unmarked. Gets her best stories that way.
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