You've Got Tribune. Now Do Something

How new owner Sam Zell can breathe life into newspapers amid widespread malaise

by Jon Fine

Happy 2008 and big congratulations, Sam Zell! You got your deal done for Tribune. Just in the nick of time, judging from all the moaning I'm hearing about how hard it is to borrow money these days. Thanks for bringing idiosyncrasy back to a medium that once, long before an initial public offering ever dirtied the desk of a press lord, was peopled by publishers with mud on their boots and rifles in their offices, if I may paraphrase the late David Halberstam. Now for the hard part: coming up with solutions in an industry long run by executives who've been stewing in its old assumptions their entire working lives.

The bad news is everyone thinks you're nuts. Yes, they always did, but now they've got reason to. While 2007 was notably ugly for newspapers, 2008 is looking worse. Paper prices are skyrocketing, and ad revenues, as you've noticed, continue to slide. On the Simpsons, a character just taunted a Washington Post (WPO) reporter: "Ha-ha! Your medium is dying!" That the coastal intelligentsia's current HBO fave, The Wire, will focus on the corporate ownership of your Baltimore Sun won't make you look great, either. But, whatever. Your constituents are bankers, not NPR listeners.

Be happy that this is an election year, and candidates are spending like shoppers in heat. Your local TV stations need only hold a bag open while the sky rains gold, at least until Nov. 4. So much for the easy part. Aside from what you've already talked about—coming up with new, half-decent Web sites for your nine newspapers—here are updates for the to-do list:

SAY HELLO TO YOUR NEW BEST FRIENDS, MediaNews Group's CEO Dean Singleton and Philadelphia Newspapers' CEO Brian Tierney. They're two new-school press barons, open to fresh approaches, whose private companies are not yoked to Wall Street. They own key papers near yours: Tierney's Philadelphia Inquirer and Philadelphia Daily News and your Allentown Morning Call; Singleton's Los Angeles Daily News and other local properties, and your Los Angeles Times. Tribune already partnered with Singleton on some ad-insert deals. You should do as much partnering with each—printing, distribution, you name it—as is legally possible. Hop into as many of Singleton's far-reaching, cross-company deals with Yahoo! (YHOO) as you can. You need to cut a deal with a portal—if it works, it will bring in pretty painless revenue. And treat Singleton nicely. He'd likely love the Morning Call if you ever want to sell it.

OUTSOURCE ALL PRINTING in as many markets as soon as possible. Ditto distribution. I know, I know, there are union complications in some of your markets. But this is the least attractive part of what you've bought. You've got better, money-making things to think about these days.

DON'T FALL FOR THE MIRAGE OF SYNERGY. TV and newspapers have never played well together. It's silly to think they might now. Oh, sure, throw some TV video up on a newspaper's Web site, and some newspaper stories up on a station's site. But that's kid stuff, and about all that will work. Print and TV are different products. Treat them as such.

Except in one way. In Chicago or Los Angeles—pick one, or even both—create a massive internal ad agency that can create and place ads, and even help with strategy, for local advertisers. No one local entity should know more about a market than Tribune in those cities. You're the only player who's got TV, newspapers, and—most important—Web sites, which for years have sucked up data on local consumer behavior. Tribune's never taken advantage of that. You should.

DON'T FEAR PRICE HIKES. For some of your newspapers—Newsday and the Orlando Sentinel, to name two—there's no serious competition. Make readers pay more for the physical product. Paper and distribution costs are brutal, and the days when you could make it up with ads are long gone. Don't worry if your circulation volume drops so long as the circulation revenue, and profits, are rising.

Lastly, your new paper in Newport News, Va.? It's not far from some nice beaches. If your deal goes to hell, remember this: you can always hide out there.

For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia

Fine is BusinessWeek's MediaCentric columnist and Fine On Media blogger .