Final paper: Market analysis for a local media organization

Amber Jackson, the managing editor of Web, multimedia, digital, and interactive sites and services for the Dallas-Fort Worth Gazette and associate managing editor for the print edition, sat in her closed office and thought, “You know, if someone had told me this sequence of events would have happened, I would have pronounced it fiction.” Amber pondered how to deal with the events and decisions she faced.

Amber had just returned from the office of the Gazette’s group owner and CEO, Arthur Granger, after a meeting with him and Gazette publisher William Stahl, and Jose Mendoza, editor and publisher of DFW Noticias, the Gazette’s Spanish-language edition. The primary group owner and CEO of the Granger Group, Arthur Granger, had asked to meet him in his office downtown. “I’m not satisfied with Granger’s profits or its editorial coverage. I take primary responsibility and am committed to changing the culture at the Gazette and my other properties. That means some major changes are going to happen at the Gazette,” Granger said.

Granger continued, “I know employees say that I don’t take bad news well. I’m rumored to be unapproachable and to hide in my office. I’ve been told that our circulation problems developed because we have a culture that discourages candor. Employees say they have a hard time telling the truth to management, including me, you, and others down the line. We all know this has been published by competing and industry publications, who’ve said our circulation fraud scandal resulted from my setting revenue goals that are too high. I’ve also been told that the scandal really blew up because our newspaper and reporters didn’t cover the story honestly and thoroughly enough.

“We haven’t yet cut our investigative reporting unit and I won’t. I’ve been holding Mother off on that for years. I think we need to improve our editorial even more but I don’t think our reporting is near as bad as our competitors and critics make it out to be” Granger added. “We haven’t been taking on the powerful and comfortable Dallas elites in business, society, and government. We have excellent political coverage and took the Catholic establishment head on after the corruption and priest sexual abuse scandal. My family is Catholic and my mother was very displeased with our coverage. But I convinced her that we must be honest and fair, especially when it’s our own church family. She finally turned over control of the group to me last month. Therefore, I want to begin my term as CEO and family owner as I see fit. But I want to do so in a way that is not disrespectful to my mother, the group, and our managers, and employees. I don’t want to make it look like a rejection of our past. I see it as building on our successes and failures and going forward into the future.

“As part of building our future, I want to develop additional digital and new media offerings. These can be associated with the Gazette, Noticias, or our TV and four radio stations, or an entirely new outlet or service that the Granger Group will own and operate. We must grow and try new things. Obviously, given our losses after the circulation fraud scandal, we must rebuild the journalistic reputation and generate significant new revenue. I don’t want to repeat the mistakes that employees think they have to do anything to raise revenue, however. I’m thinking we’ll need to reorganize the firm’s structure to make it more open and responsive to new media ideas and change the culture. I’ll want your recommendations on structural changes in your reports. We also need to see whether our personnel and legal documents need to be changed as well,” Granger said.

“I’ll also be meeting with management at our sister television station as well as our four radio stations in DFW. We’re going to improve things there too, building on our DuPont-Columbia, Peabody, and other awards for TV news and documentaries. We’ve gotten a reputation for not retaining our top news employees. Well that’s going to change starting immediately. We’re going to retain our older, core audience while finding new ways to attract a younger audience with new-media ventures,” Granger looked quite serious when he said this.

Granger paused and then took an even more serious tone. “Obviously this necessitates decisions that are personally and professionally challenging. I’ve already talked to William and he is stepping down as publisher of the Gazette. He’s agreed to retire and have his contract bought out. I’ve already spoken to Jose who has agreed to take over as the Gazette’s publisher. I’ve personally spoken to Bobby Joe Bryant and offered him a buyout. Amber, as you know, both Jose and William have recommended you to be the new managing editor of the Gazette, should Bobby Joe accept the buyout. I spoke to him this morning and he refused to give me an answer or stay for this meeting. I’ve given him a week from today as his deadline for giving me an answer.”

Granger noted, “I brought you all here today to charge you to identify and report on the cultural, organizational, and revenue problems we need to solve. I’d like you all to provide a report in a week outlining what you see as the major problems we need to solve and how to do so. William has kindly agreed to provide a report even though he will not participate in the actual implementation due to his retirement. Bobby Joe also has agreed to provide a report but says he doesn’t want to be a part of the process.”

Granger added, “Another major concern is how to handle the buyouts and possible layoffs. Please make recommendations to me as to which employees are to be offered buyouts, why, how those buyouts should be handled to avoid negative publicity or further harm to the Gazette’s reputation, and what to do if these employees refuse to be bought out. When I receive financial updates, I’ll be able to give you a clearer picture of whether and how many employees may have to be laid off. So you should be making contingency plans now to respond if I need recommendations from you soon. William, if you don’t mind, I’d like to talk to Amber and Jose alone now.”

William left the room and closed the door again. Granger sighed and then concluded. “Obviously, Bobby Joe Bryant is one of our buyout candidates. I asked William to leave because it appears to me he’s been protecting Bobby Joe and providing him inside information. As you know, they’re Mother’s favorites and I’ve been trying to explain to her why a change of leadership is needed for years. I can’t be sure if Bobby Joe or William has been the source for negative information to the media. Given the amount and type of information leaked, it could be several people in management and nonmanagement positions.”

Granger continued, “Bobby Joe’s case is not an easy one. He’s certainly been an institution in the Dallas-Fort Worth journalistic community, having won numerous awards earlier in his career. My mother loves him. But we all know his reputation has declined and he’s been a lightning rod for personnel problems and controversy. Others have accused him and William of leaking information about our predicaments to competitors. One theory as to why it is them is because nothing negative about mother has ever been published, nor has she even been mentioned in the criticism. It’s assumed that they wouldn’t say anything negative about Mother because they want to protect their power stemming from her favor of them. William has never been able to clearly explain to me why he protects Bobby Joe the way he does. So we all need to carefully think about how to handle his situation, whether or not he accepts a buyout. We have to assume he and William may leak anything we present or say to him. We also have to assume he and William may try to call Mother to rescind their buyouts. Mother will refuse so we must expect that there may now be negative coverage about her. Whatever happens, I want to be sure we treat William and Bobby Joe honorably and fairly.”

Granger concluded by saying, “Obviously, I’ve shared personal information with you about my family in this meeting that I’ve never discussed with you before. As my leadership team, I want us to be completely comfortable in discussing anything with each other in a professional way. I expect that you will always keep these discussions of personal family issues that affect the company private and will not leak them to the media. I mean no offense, but because we are a family corporation I have to say that. I want to be sure I’ve clearly stated that to you so my expectations are clear. I also want to be sure we all have a working relationship where we can trust each other completely and discuss whatever we have to.”

Jose replied, “I’ve worked for large, small, public, and private media group owners. I fully understand why you are saying this and will keep your trust. If I ever felt I had to provide information that you felt I shouldn’t, I would talk to you first. Then I would accept the consequences of my decision. I fully understand, respect, and agree with what you’re saying. But I’m also telling you, Arthur, that if I ever felt my journalistic integrity was compromised, you’ll hear about it.”

Amber concurred, adding, “Arthur, you know I feel exactly as Jose does. I am loyal to you and the Granger Group, but I cannot compromise my journalistic integrity. There is concern about the direction the Gazette had been taking. I think it would improve morale and help us to retain our best employees if we could share what you’re telling us with our employees. Certainly, I understand there will be an appropriate time, way, and place for doing so. But I think if we really want to change the culture and improve morale at the paper we need to improve communication between you and our employees. We need to deal with issues like the circulation scandal in the same way we’d investigate any other paper or organizations. I think outlining how to deal with things like the circulation scandal in the employee manual, as well as improving communication, would go a long way toward reducing or eliminating leaks as well.”

Arthur said, “That’s why you’re my new publisher and will be my managing editor, sooner, or later. Even if Bobby Joe remains in his position for the time being, Amber, you’ll be included in upper-management decisions. I have no doubt you both have the kind of journalistic integrity and personal candor I admire and seek in my top managers. I respect and trust you both and want you to stay with us over the long term. I hope you will always give me the chance to retain you.”

After the meeting, Amber and Jose met in Jose’s office with the door closed to discuss things further. Amber asked Jose, “Why was I called into this meeting even though Bobby Joe has not yet accepted his buyout? That’s a bit uncomfortable for me and him. And it seems likely to anger him, knowing his past behavior.”

Jose replied, “Well you’re the associate managing editor and Granger, William, and I wanted to include the entire top management team in these discussions. Everyone, including Bobby Joe, knows you’re being groomed for his job after he retires. But, between you and me, I think Granger is trying to find out who has been the source of the leaks. And we all know William and Bobby Joe are among those who are suspected of leaking negative information. I think he wants to find out quickly whether his mother has truly given up control. And I think he was very upset about the way coverage of our scandals was covered in the Gazette.”

Jose continued, “Obviously, our jobs are unusual in that, for better or worse, in this company top managers have to consider the family politics of the principal group owners. You and I wouldn’t be in these positions if we hadn’t walked the fine line well between maintaining our journalistic integrity and understanding how to keep clear of family politics. I don’t think William and Bobby Joe ever truly understood how being Mrs. Granger’s favorites and playing that angle is a double-edged sword.”

Jose concluded, “Now, there’s another important factor we need to consider. How we handle what’s coming is going to define our reputations. I am committed to rebuilding the paper to its previous role as the journalistic leader in Texas and the region. I was crystal-clear about that to Granger when he offered me the publisher’s job. I also told him I would be forthright and honest with him and would not hesitate to go to him with things he may not want to hear. Obviously, I’ll be diplomatic, but I won’t hesitate to approach him. You heard what he said, so I’ll take him at his word.”

“That’s what I told him too,” Amber said, adding, “Between you and me, do you really think his mother will take a background role? She’s a smart, strong woman and has deep ties with most community leaders.”

Jose replied, “I know Granger has been working toward taking over from his mother for several years. He’s been courting the community leaders. And the coverage of the Catholic Church scandal made it pretty clear he’d take on the community establishment. I think most felt the coverage was fair and appropriate. Yes, I do believe he has finally taken over. Mrs. Granger is a pistol, but she’s 84 years old. Even though she and Arthur have different philosophies and approaches, I know she’s always respected him for taking stands even when he knew she wouldn’t approve. I think Arthur’s taking the right steps, and he’ll find out pretty quickly whether his mother is truly ceding control. While I do believe it’s final, we’ll all have to keep our eyes open and be prepared to deal with any eventuality. And you and I must remember not to discuss private Granger family matters with anyone else. Nor do I want either of us to try to court favors like William and Bobby Joe have.

“I think you and I need to reconsider our style of working together. I know in the past we’ve each written separate drafts, and then gotten together, combined our reports, and worked out a final draft together. But if you become the managing editor, there will be times you’ll need to take stands. I know you’ll be an independent and strong managing editor. I think some employees buy into the female stereotype that you follow my lead. I suspect many employees don’t know we disagree but work out our differences and compromise. I’m not sure of the best approach, but we need to consider this carefully and establish our own independent styles and authority at the outset, while maintaining our strong professional partnership.”

Amber was a bit taken aback. She’d never heard that rumor. She thought a moment, and then replied, “I appreciate your thoughtfulness on my behalf. I’m not sure if many employees buy into that stereotype. And I think most employees understand our professional working relationship and recognize we are each independent and quite willing to stand up to each other. I also want to keep our partnership strong, agree that we need to consider this carefully, and establish our own independent styles and authority at the outset. I’ll think carefully about this and get back to you informally with suggestions. And I assume that you and I, like Arthur, want to be completely candid and be able to trust each other.”

“Of course, that goes without saying,” replied Jose.

Amber knew she and Jose thought removing William and Bobby Joe was a big step toward solving problems and improving the paper. On numerous occasions, they had tried to talk to Bobby Joe about offering new digital, video, or mobile services or outlets for the paper. And Bobby Joe always refused to consider their ideas. Amber and Jose often had to weigh the pros and cons of going over Bobby Joe’s head and meeting with William about their ideas and Bobby Joe’s lack of cooperation. Yet both dreaded this option as Bobby Joe was known to retaliate or simply stop speaking when he was unhappy with someone.

Even Jack Hancock, the sports reporter who was universally liked and admired for his award-winning reporting, had had run-ins with Bobby Joe. Bobby Joe held Jack’s story on a doping scandal involving a prominent Texas Rangers baseball player because he wasn’t satisfied with the supporting sources. A competing paper ran the story first, depriving Jack, the Gazette, and Noticias of the scoop. While both continued to work together well, it was common knowledge among the staff that it was only because Jack knew Bobby Joe’s stubborn nature and decided not to press the issue to the publisher. Both Amber and Jose had smoothed things over, ensuring Jack got a well-deserved raise after his next performance evaluation. Newsroom employees felt the sources were solid and the story held simply due to Bobby Joe’s excessive caution. Other staffers wondered who and what Bobby Joe might be trying to protect or if someone behind the scenes was intervening. Most of the staff tried to avoid conflicts with Bobby Joe because they felt he was a friend of the publisher and the elderly Mrs. Granger.

The Gazette’s and Noticias’ management and staff were also on edge because of newsroom buyout rumors. Bobby Joe told staffers he’d heard “from a reliable source” that about 50 positions would have to be cut from the print, online, and digital/new media newsrooms. Word quickly spread among the employees. However, given the papers’ new goals for emphasizing multimedia and Internet strategies in the future to generate new revenue streams, the print edition news staff was especially concerned. Only a year and a half earlier about 60 newsroom and circulation department employees had been laid off after the circulation fraud scandal, leaving the company with about 3,000 employees.

William had outlined his goals in a paper-wide assembly and letter to employees several months earlier. William and his senior management had finalized the goals after department and edition managers held focus groups and meetings with employees to develop goals. Amber agreed with William’s insistence in including all employees in the goal-setting process and genuinely considering their input. This same process was used for goal-setting at the other outlets as well. William said he wanted to emphasize breaking news and information on the Gazette and Noticias print and Web editions, add more streaming video feeds and podcasts, and launch demographic or psychographic segment-tailored community, digital or mobile services or sites. Yet, after the goals were formally adopted, every time Amber or Jose tried to talk to Bobby Joe about ideas to meet these goals, he blew them off.

The print and online newsrooms had come close to exploding over Bobby Joe’s antics several times. Only loyalty to Amber and Jose, as well as fear over losing their jobs due to layoffs or buyouts, had kept the staff from taking more drastic action. But Amber knew it was only a matter of time. Either someone would file a complaint against Bobby Joe or they’d lose a valued employee who could find a better job. She hoped Bobby Joe would accept a buyout.

Amber knew Bobby Joe would be 65 soon although he’d often said he wanted to work as long as he could, at least until he was 70. He’d won numerous local and state awards earlier in his career as a reporter. He’d been promoted several times and had worked at the paper for more than 35 years. As an entrenched member of the local news media, his buyout would have to be handled carefully. But Amber, Jose and many other news staff felt Bobby Joe was a good ol’ boy who didn’t change with the times. Many editorial management and staff also felt that Bobby Joe, and to a lesser extent William, tended to protect the community’s “sacred cows,” such as major corporations and prominent citizens. The Gazette had lost several respected reporters over the years and many employees blamed Bobby Joe.

For example, a number of years earlier when Amber and Jose recommended developing blogs for the online edition, they finally had to write a memo to William outlining their ideas that also included Bobby Joe’s objections and that the ideas were being submitted despite his failure to recommend them. The blogs they recommended were likely to be successful such as sports-interest blogs for Ranger, Mavericks, and Cowboys fans. The DFW area breaking news, weather and sports opt-in e-mail alerts also were a success. Yet every time they had a new media recommendation, they had to write a memo presenting their ideas and outlining Bobby Joe’s objections. Amber and Jose were sick of having to do things this way. It seemed counterproductive and made it harder to maintain good working relationships. All were constantly reminded of their philosophical and editorial differences.

To make matters worse, the best employee in Amber’s division, Senior Editor Umberto Martinez who excelled in his strategic development role, had just come to her with a job offer from the Austin American-Statesman. Umberto was essentially offered Amber’s job at the Austin paper. And the paper offered an investigative reporting position for Umberto’s wife, Sheila Kelley.

Umberto told her, “I’d love to stay, but I’m sick of dealing with Bobby Joe. My wife and I would prefer not to work at the same paper, but I want to be in a position where I don’t have to argue with Bobby Joe over every idea. And we all know that I’ve been blamed for leaking to Sheila, but honestly, I’m not the source of the leaks.”

Sheila was the investigative reporter on a local alternative newspaper. There she had the luxury of writing long, detailed investigative reports. She was one of the reporters who broke the story on the district attorney’s investigation of the Gazette’s circulation scandal. The district attorney investigated Granger and the other owners of the Gazette for claiming to distribute more newspapers than are actually distributed and charging advertisers a higher rate based on the inflated circulation figures. The case had gone to a grand jury but no indictments resulted.

Rumor had it Bobby Joe had quashed the Gazette’s top reporter’s story about the district attorney’s investigation, allowing Sheila and reporters at other local and regional papers the scoop and embarrassing the Gazette’s publisher. That top reporter, Amanda Marshall, left to take a reporting position at The New York Times about 2 months after the incident. The group owner had included the investigation in its online quarterly report on the Web and a story appeared on the Gazette’s front page the day after Kelley’s scoop.

Ultimately, the district attorney did not file charges. But the way the investigation story was handled when it broke embarrassed and humiliated many Gazette newsroom employees. Whether it was true, it made it appear the Gazette did not adhere to journalistic standards of integrity. It also affected the perceived integrity of the paper’s sister television and radio stations in town. Critics claimed it was because the Granger Group did not have a commitment to presenting quality, forthright news, especially when it involved the family company.

Ironically, a few months earlier, the Gazette ran a front-page story reporting that Sunday circulation was inflated by about 10% and daily about 5%. A whistle blower had privately informed Arthur Granger of the scandal. Granger kept the whistle-blower’s identity a secret. He immediately called a meeting with his mother, the other owners, and the Gazette’s top managers, who were all appalled by the scandal.

Arthur got the owners and managers to agree to hire a prominent and respected law firm to conduct an internal investigation. It was rumored that the law firm had documentation that certain employees were responsible. Yet, many in the circulation department were fired and the vice president of circulation resigned. The group charged about $20 million against earnings to compensate advertisers and other related expenses. Arthur Granger sent a letter to all employees explaining the results of the law firm’s investigation and the subsequent actions. Granger had been deeply offended and angered that the Gazette had not reported about the district attorney’s investigation first.

Apparently, the circulation fraud was the result of an incentive program that awarded trips and cash to employees who met goals to increase circulation. Unfortunately, the circulation employees who appeared to be involved in the fraud had been fired about 2 months before other employees were laid off who had no part in the scandal. This unfairly placed under a cloud of suspicion many innocent, good employees who had simply lost their jobs because revenues declined after the scandal.

This was another reason employees were so concerned about the buyouts and possible layoffs. What would happen now? They did not know that Bobby Joe had been offered a buyout. They didn’t know about Granger’s dealings with his mother behind the scenes. Amber and Jose knew they’d wonder whether employees like Bobby Joe would be retained based on seniority while excellent employees with shorter tenures be let go.

Amber knew she had a lot on her plate. She sat down at her desk and began formulating her thoughts. She knew major changes were coming, and there would be events she could not anticipate, but others she could. She wanted to develop an excellent report and prepare herself as best she could for all that was to come.

She thought, My organization’s, employees’, owner’s, and personal and professional reputation are at stake. She knew Arthur and Jose felt the same way.