The following is a story by Inside OC, a Voice of OC broadcast media partner covering Orange County newsmakers.
An architect of the Orange County Register’s failed “back to the future” gambit now echoes many of the skeptics who said all along it wouldn’t work.
“We certainly made mistakes that are easy to second-guess,” former Register co-owner Eric Spitz said on this week’s “Inside OC with Rick Reiff” public affairs program (begins airing Tuesday (April 12) on PBS SoCal and Cox3).
“I think we went out too fast,” Spitz said. “I think we hired too quickly, I think we didn’t read the data properly before we went and did more things.”
Spitz said it was a “natural next step” for the Register’s holding company Freedom Communications to be acquired out of bankruptcy late last month by Digital First Media, a hedge-fund-backed newspaper chain known for cutting costs. One of Digital First’s first moves was to eliminate six dozen Freedom jobs.
“Frankly, I think that had we not bought the paper four years ago, this would have happened three years ago… All of the successful ones (newspaper buyers) are cutters because that’s the mode that the industry is in and it’s a declining industry and the only way to keep the profitability constant is to cut.”
Spitz and fellow Boston entrepreneur Aaron Kushner astonished the newspaper industry in 2012 when their investor group purchased Freedom for $50 million and the assumption of more than $100 million in pension obligations, then embarked on an audacious effort to revive the Register by de-emphasizing the Internet and going all-in on print.
They doubled the newsroom staff to 400, added sections, threw up a paywall to discourage on-line poaching, bought the Riverside Press-Enterprise and launched short-lived editions in Long Beach and Los Angeles. But all the efforts and exhilaration failed to stem the erosion of revenue and readership, and in November a debt-laden Freedom went bust for the second time in six years.
Digital First picked up Freedom for about $50 million, adding it and the P-E to its renamed Southern California News Group that counts 11 dailies, including the Los Angeles Daily News and Long Beach Press-Telegram.
Spitz said some of his and Kushner’s concepts are being emulated, for example, a paper offering a 99 cent day rate on-line and the Boston Globe launching a philanthropic “gift cheque” program.
“Had we spread out some of the concepts, some of the ideas, we might have been more successful because we wouldn’t be chasing our tails quite as much,” he said.
Spitz said he thinks in order to survive newspapers will have to figure out how to squeeze more subscription revenue from a “much smaller audience.” “I believe there is a future for newspapers. I’m not sure it is as a mass advertising vehicle,” he said.
Spitz said he, Kushner and their backers lost all of the “tens of millions” of equity they put into Freedom: “It’s never fun, that’s for sure. I will work for the rest of my career to try to pay people back, the folks that I brought into the deal.”
That career may continue in Orange County. While Kushner has already gone back to the East Coast, Spitz said he’s taken to the California sunshine and doesn’t want to uproot two kids who are in high school here:
“My goal is to stick around. I’ve learned a lot and met a lot of people and enjoyed my experiences, so who knows?”
But whatever he does next, “I don’t expect it will be very closely linked to newspapers.”
The show, which also includes a discussion with OC Metro founder Steve Churm and OC Weekly founding editor Will Swaim, begins airing Tuesday (April 12) on PBS SoCal and Cox3.
A further discussion among Reiff, Spitz, Churm and Swaim will air the week after that.
All show times are listed at www.rickreiff.com.