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At the Ripping Point

Jim Moroney gives himself a failing grade as publisher during the paper's tumultuous past year.
Mark Graham

The maintenance workers were pulling down photographs from the wall when a Dallas Morning News staffer stopped to watch. Piled on the floor were several frames, each housing a picture of a DMN employee who'd worked there 25 years or more and had just been laid off.

"Tell you what," the staffer said. "Why don't you go stack those on [Publisher] Jim Moroney's desk?"

Such is the bitterness that still fills the hallways on Young Street in the wake of last month's layoffs. The sullen lifer mentality that dominated the newsroom for so long has given way to a barely contained seethe, an omnidirectional anger that disperses blame for the depressed state of the paper. Dozens of newsroom staff, editors and writers alike, say morale has never been so low.

With good reason. The Dallas Morning News has undergone a series of setbacks the past several years that have rocked the faithful and enlivened the cynical. Yes, Belo is still a strong overall media company. It owns, in addition to the Morning News, 19 television stations (including WFAA-Channel 8) and three other newspapers. The company brings in $1.4 billion in revenue, and analysts say that Belo, as a whole, is doing fine. But growth at the paper, the jewel of Belo, has been relatively small in recent years and is projected to be flat next year. At least some of its problems, editorially and financially, can be traced to its parade of follies.

It began in the late '90s with a declaration of war against the Fort Worth Star-Telegram when the DMN launched the now-defunct Arlington Morning News--a war Belo lost handily. It extended to the $37 million investment in the spectacular technological failure known as CueCat. (It's the screw-up that keeps on giving: Complaining staffers referred to CueCat in almost every conversation with the Dallas Observer.) The multimillion-dollar launch of the Texas version of CNN, TXCN, soon followed, a mistake that Belo says it will sell off or close down. These were followed by an expensive expansion into Collin County that has yielded almost no new readers, a push to cover suburbs that is being scaled back and a hurried launch of a blurb-filled free daily paper, Quick, to capture readers who don't read.

Wait, there's more: a debut of a Spanish-language paper, Al Dia, that is performing well below expectations, despite management's insistence that it is "on plan." (They do admit Quick revenue is down.) This was capped off earlier this year by a circulation scandal that has cost the paper nearly $30 million in settlements to advertisers. A scandal in which management places the blame on the drivers who delivered the paper. But, according to management, the scandal had nothing to do with this month's layoffs--250 people Belo-wide, about 150 at the News alone--a ridiculous statement that the paper's editors would never let someone get away with in one of their news stories.

The weight of these wrongheaded moves has all but crushed the spirit of the Morning News. In casual and on-background conversations with dozens of reporters and editors during the past five years, I've seen the staff depression build and wane. Occasionally the paper would produce something to be proud of--its series on how the Catholic Church protects many of its sex-shamed clergy, or its special section examining whether the city of Dallas was "at a tipping point," ready to fail--and the loyalists would shout down the staff naysayers. But the past two weeks have brought an onslaught of condemnations from all corners. A funk has filled the place. Like Democrats or Dallas Cowboys, the entire team seems ready to admit its fear for the institution's future.

"One of the reasons the DMN won its first newspaper war versus the [Dallas Times] Herald was a willingness to spend money on a good product," says a longtime manager, summarizing the feeling of many. "Its reversal on this very point is one of the reasons it will eventually lose its fight for its life. It's far too easy to go online and get most of the kind of coverage that the DMN will now offer. It has gutted what made it a unique reading destination and drastically drained its talent to boot. I've heard so many people say, 'Who would have thought the paper could fall so far, so fast?'"

Even Moroney, the wunderkind publisher who most recently was heard shouting that he was leading a revolution, admits he's depressed. In a companywide meeting held two weeks ago, he told the room as much. "Someone stopped me in the hallway and later e-mailed me and said I looked sad," he told the throng. "And I e-mailed back and said yes, but it's OK to be sad. Everyone has to go through this grieving together." And, if you need someone to be angry at, he said, "be angry at me. I won't get angry back at you."

 

This is good. Because despite his closing statements of optimism--"We're going to make this better," he said--the blame for the paper's decline is being placed squarely on Moroney. In fact, the staff is most upset because it feels duped by him and his talk of "revolution," which, in their eyes, means half-ass attempts to capture light readers and an increasing dumbing-down of the rest of the paper.

Worse, they worry that the quality of their journalism is secondary to the financial health of the company, because Moroney constantly ties together the financial and editorial aspects of the DMN's performance. Ties it together in a backassward way. To the staff, he seems to be saying that only a robust, growing, highly profitable DMN can produce a great newspaper and everyone must work hard to see that this happens. Left unsaid is that the old way of thinking--we're profitable only because we're a great paper--is gone.

But even if you buy that management has its priorities screwed up--and Moroney and Editor Bob Mong say vehemently this is not true, that everything begins and ends with putting out a great paper--you're missing the point. The DMN will never be what it used to be. Everything the paper is today is designed to make it something else, something altogether new and exciting, something to fit into Belo's plan for convergence, the buzz word that has been floating around the place for years. That means that all Belo employees--WFAA-Channel 8, Belo Interactive, Quick, Al Dia, the DMN--are working for one media company that gathers information and disseminates it a hundred different ways. That is the company's vision, and everything that the employees bitch about is integral to that vision. Under this plan, they don't write great stories. They gather information to be processed and fed into the Belo conveyer belt, and all the media properties can use it when it's spit out the other end.

Why would they want to do this? Because Moroney believes it is the only way the paper will survive.

Why does he believe that?

The answer to that question gets to the heart of who is really running the Southwest's largest paper.

Moroney believes this because that's what the consultants tell him.


"I feel like a failing student," Moroney told his employees at the companywide meeting. A meeting that was more sparsely attended than in years past; not a good sign.

Moroney told the staff that he took full responsibility for the poor performance in every area--circulation, readership, customer focus, financial performance, profit from the zoned editions of the paper. "When you review down the line, we were not successful" in 2004, he told the crowd.

It was a less than inspiring speech.

"Look, it's on me," Moroney says from his car phone the following week. He is, as always, polite and forthright, willing to take tough questions and answer them without rancor. It's what makes so many staffers like and respect him when they deal with the publisher face-to-face. It's also why so many of them are upset at him personally as well as professionally.

"If you're the CEO of a company," he continues, "you are responsible for its results. There may be very good reasons things are where they are, why you're struggling. But at the end of the day, I feel responsible for the operating results of The Dallas Morning News."

Taking responsibility is not enough for some. "I like the guy," one manager says. "But let's look at this dispassionately. Name one thing--one thing--he's done right. One thing that has worked. I can't."

"What I wanted to hear at that meeting," says a longtime newsroom employee, "was very simple. I wanted my leader--who I thought was [Editor] Bob Mong, but I guess it's the publisher--to tell me all you have to worry about is putting out a fucking great paper. Just do that. We'll do our job. We'll make enough money so we don't have to fire anyone else. I won't even tell you how, because you don't need to know. Just write great stories. End of meeting.

"Instead I was asked to help think about distribution and utilizing new technologies. And I don't even know what that means."

Moroney laid out his vision for the paper's future thus: He said the paper would have to restructure and re-examine what it has to offer, with more "customization" in mind.

Why?

Because the era of mass customization is what lies ahead for all newspapers.

Huh?

Well, that means that there will be one core product--presumably The Dallas Morning News--but that the paper must customize itself beyond that for people's individual needs and interests.

 

What?

There will be maybe six or seven or eight or 10 versions of the newspaper, he said.

Why?

Because readers are different now. Presumably because they're readers who don't read. They demand that the paper "shift content" to what they want to know.

Inspired yet?

"What this tells me," says a news reporter, "is that we're giving up on telling stories. We're moving toward TV--headlines and summaries. Like our new back page thing."

The reporter is correct. The "back page thing"--the summaries found on the "At a Glance" page on the back of the Metro section--is one step in the paper's movement toward capturing what management calls "the light reader." They're not the only paper doing this, of course, but again, many people came to the Morning News because of its long-standing commitment to in-depth reporting and storytelling. Not to engage in an experiment in capturing new eyeballs with a summary page.

In fairness, the paper did manage to wall off its best hard-news and investigative reporters from the layoff wave that landed a few weeks ago. In searching for good news, several reporters I talked to said they were somewhat heartened that none of the paper's "best and brightest" were let go. One staffer even rejoiced to me that the people laid off were dead weight and claimed the only thing making her happy was that at least management knew to get rid of hangers-on.

The layoffs, however, showed an incredible lack of understanding for what readers grow attached to--trust me, Larry Powell's pet column or a Doug Bedell video game review is more thoroughly read than any investigation the paper has ever or will ever produce. And it's true that the biggest stars remain. There are many top-notch reporters at the paper who can produce top-tier journalism. Pete Slover, Lee Hancock, Holly Becka, Brooks Egerton, Reese Dunklin: These people will not let the paper slide into mediocrity without a fight.

But their battle is a losing one. Because the forces they can't control--the forces Moroney continues to marshal--are more powerful than any person who types for a living can battle.

Heading the fight is the Harvard MBA army known as McKinsey & Company.


Scan the Web site of McKinsey & Company, one of the oldest and largest consulting firms in the world, and you find this headline: "Example of Our Work: Newspaper Gets a Rightful Share of the Marketplace."

"One of the oldest and largest general circulation newspapers in the United States needed help reorganizing its advertising sales effort in a recession," the explanation reads. "The McKinsey team stressed the need to make big changes."

It's impossible to know for sure if they're talking about the Morning News, because McKinsey has a no-comment policy to the media. Which is just one reason someone should be wary of paying the firm, which commands millions of dollars for its consultations from clients as diverse as United Airlines, TXU and the city of Dallas (see "Surrender Now!" by Jim Schutze, November 11). If they're so distrustful of the media, why were they hired to help remake a media company?

But hired they were. Internal memos show that Moroney asked McKinsey & Company to evaluate his entire business operations--advertising, marketing, circulation. He says, quite reasonably, that any company going through changes must take both internal and external advice if it's going to realize what needs to be done. It makes sense in just about every business. Except, say many disgruntled staffers, in the unique world of journalism.

According to people who've worked with and for the company, here's the standard McKinsey game plan. They march in a bunch of young Harvard MBAs or similar clones. They interview managers and staff and observe same. They conduct efficiency studies--what they'd say about a reporter waking up at 4 a.m. to finish a story due at 10 a.m. is anyone's guess, but let's just suppose they would call this "inefficient"--and report back to management. Then they take their findings and put them in context with that industry. How is this done? Why, by looking at the latest reports on the state of that industry--done by McKinsey industry researchers, naturally--and determining if the client is following the path these reports suggest. The reports they wrote. In other words, they come in and tell you if you're doing what they've said you should be doing, and if they find you're not, they tell you to get off your big arse and start doing it.

On the biz side, this was fairly innocuous. They revamped the way salespeople get paid, made it easier for folks to suggest changes, yada yada. Fine.

 

After that, McKinsey's people did something that is also standard operating procedure. They got themselves hired by the client in hugely influential positions. In February 2003, 30-year-old Jason Kays, a management consultant with McKinsey, was named vice president of advertising marketing with the DMN. Moroney said at the time that "Jason's experience with McKinsey makes him an ideal person to lead this organizational change process." The one suggested by McKinsey.

Last month, in the wake of the circulation scandal--the one that somehow evaded the watchful eye of the McKinsey MBAs--Kays, 32, was again promoted. His new title: vice president, circulation. This was announced the same day that Editor Bob Mong was stripped of his title of president in the company. The symbolism couldn't be clearer.

Or maybe it could: Four days later, Moroney named Cynthia Carr, 32, to replace Kays as vice president of advertising marketing. She had been director of business development for a short time before that. From 2000 to 2004, she was a consultant for McKinsey.

Granted, there's nothing inherently sinister about working for McKinsey. It's where Chelsea Clinton works. It's where consultant Jeffrey Skilling was employed before he became Enron CEO, before he was indicted for fraud and insider trading. But I digress. The point is that if you think these consultants and their cousins, the people who run focus groups, aren't also determining the direction of the paper's editorial product, you're not paying attention. Remember when Moroney talks about circulation and building readership and better financial performance making the paper stronger? Where do you think that comes from? The sports section? Texas Living? Page 1 stories on how mean Dallas is to the homeless? Steve Blow columns on how we should, post-election, hold hands and sing "Kumbaya"? The former editor and president who is now just an editor?

No. It's the advertising staff. The sales staff. That's who's buggering this cat.

If you're not clear on this yet, consider a recent example.

Weeks ago, Walt Stallings, the senior deputy managing editor, told the Metro desk that they were reducing the number of zone sections (news from the 'burbs, where those new eyeballs are) they produce each week from 20 to 11. (One per week per zone, except Collin County, which produces 48 or somesuch.) This was announced to the staff.

Before we go on, understand that this is not something that Stallings, a well-respected editor, thought up at Starbucks that morning. This decision was not determined by shipping in an idiot savant to read the sports agate and determine the best course of action for the paper. This was a Big Decision. It involved circulation, marketing, advertising and editorial. There is one person at the DMN who oversees all these departments: Moroney.

The Metro staff, by the way, was quite relieved. It had been begging for zoned-edition cutbacks for months, because it didn't have enough reporters to keep publishing 20 sections. Then, after the layoffs, which took out another half-dozen or so zone reporters, it seemed impossible. So they welcomed this new strategy for that reason, but also because of what it said symbolically: The emphasis needs to be on the grown-up paper, what we like to call the core product, doing great downtown stories about the city's important issues.

On Monday last week, in what was described as "an emergency meeting," Moroney said, uh, actually, that isn't going to happen. He said the cutback would be only to 16 sections produced a week. According to accounts of the meeting, he told those assembled that the advertising department had raised hell after the change was announced because they hadn't been consulted. Even though the sections are losing "in the ballpark of $2 million a year," says one manager, the ad department says they'll lose even more if they're cut back. Then Moroney said he'd never signed off on the plan. The Metro staff felt like they'd taken a swift kick to the 'nads.

The idea that the publisher hadn't already OK'd that decision--and then retreated in the face of the ad department's pressure--is prevalent. "Can't be true [that he didn't sign off on the deal]," says a manager. "Either that, or Mong signed off and now he loses face. Doesn't matter in the long run. Metro is fucked over in a big way. Work schedules changed, now changed back. It's more grist for those in the newsroom who wonder, with some justification, if anyone knows what the hell we're doing."


Of course, there is someone who knows. Some thing, actually. McKinsey & Company.

Maybe that's overstating it. A bunch of consultants from McKinsey aren't sitting in a big conference room on the fifth floor telling people how to run the paper. At least, I can't prove they are.

 

But if you listen to Moroney talk about being "consumer-driven" and changing the paper's marketing strategy and bringing in consultants who, like himself, were not brought up in a newsroom--the heart of the core product--then the seemingly desperate, willy-nilly attempts by the paper to capture new readers make sense. It's what the people who aren't newspaper people say a newspaper has to do to survive.

It's not just Moroney. Mong, who was raised in newsrooms, says that a strength of the paper is that it is strategic- and goal-oriented, two things he says consultants like McKinsey help bring to the paper. "Whatever consulting they've done has been value-added," he says. "They have not determined how to run the company."

Still, given McKinsey's (debatable) influence, the paper's wrenching changes shouldn't surprise anyone. Ten years ago McKinsey put out a paper called "Navigating the Multimedia Landscape" in which it said, in typical Harvard MBA-nese:

"Businesses that assemble content into products for specific markets and that provide marketing support and access relevant distribution channels...will undergo significant change as new formats compete for consumer and business customers...As these technologies provoke technological, market and competitive discontinuities, they will inevitably alter the set of skills needed to compete successfully."

Translated: As people start getting their news on the Internet and through wireless phones and mobile devices, other products like your ol' newspaper may experience a "discontinuity." So what is a media company publisher to do?

"Senior managers of many companies need to make choices--often 'bet the company' choices--about opportunities for value creation and, even more frequently, about the threat of large-scale value destruction."

That's what Jim Moroney is doing. He's making a "bet the company" choice. A choice that by hell or by high water, he is not going to oversee the financial decline of his newspaper. And he's convinced that the way to do this is to "shift content." Do market research. Get the hausfraus to tell you what they want to read. Get the consultants to tell you how to package, seal and deliver it.

And if all those people tell you they want little blurbs and funny cutlines and pretty color pictures and community news and stuff that isn't so mean and more funny pages and a bigger TV guide and not so many big words all wrapped up in a nice little high-energy eye-pleasing kiss-my-sweet-butt-that's-pretty design, then dammit that's what they're going to get.


The problem with a bet-the-company choice is that you may lose the bet.

Maybe it's a gamble worth taking. Moroney certainly thinks so. He told the staff, "We won't be the same paper." When someone criticized the "At a Glance" sideways monstrosity and the paper's out-of-control quest for light readers, he countered that it was the right thing to do. "This was researched heavily," he said. Of course it was.

This gets to the core problem with the core product.

Nearly two years ago, Bob Mong was ready to lead the DMN to new journalistic heights. He was invigorated and aggressive. He confidently declared that he had a challenge for the staff. It wasn't something that he'd "researched heavily." It was a challenge based on a lifetime in newspapers. He wanted to know the answer to the following:

"Do we really have enough people who believe that we can get better? A lot better? We're a very good paper. Can we become great? What I'm betting on here is that's what most of them want. Most people come in here wanting to make a difference and be the best at what they do...So I'm betting. I'm betting that the energy level is there and the aggressiveness is there, the collaboration is there, the willingness to do more is there. That's the big bet."

Turns out, that wasn't the bet. As a reporter told me last week when I recalled this quote, this is now the challenge:

"Can we be a kick-ass newspaper if we're trimming staff, scaring good people from coming here, making the good people who are here send out résumés, and generally demoralizing the staff? That's what we're gambling with here. We're bluffing at a pot with all the talent we have. And if we're more worried about putting out Quick and picking up readers in Plano than covering City Hall, we lose that bet. We're called on that bet. Whatever. I don't play poker. But you get my point. George [Rodrigue, Mong's No. 2] and Bob say that's not the case, and maybe it's not for them. But I think it is for the publisher and [CEO Robert] Decherd."

 

Moroney says that analysis is silly.

"It's ridiculous to say that we can't be a great paper because we've only got 500-something people in our newsroom," Moroney says. "How were we great 20 years ago or 30 years ago? Look, our number-one challenge is to get the morale of the employees where it needs to be...And the second is to restart the circulation growth of the newspaper." Again, whether one feeds two or two feeds one is the question for the staff. A vital one.

Moroney also points out that even though Belo's many different content providers reuse information in many different ways, each of these entities has its own staff. It's not as though a DMN reporter is being asked to be an anchor and write HTML. He or she still must produce great journalism, he says, and there are enough people in place at other organizations to take his or her content and repackage it as needed.

While the many staffers I talked to acknowledge this, they say he doesn't understand the mental drain that takes place when you feel your managers see your work that way. Management's lack of focus stifles creativity and dampens morale, they say.

Moroney, the staff says, in his fevered efforts to find something, anything to fix the paper, is indeed making a big bet while holding few cards. For one simple reason: Convergence doesn't work in a newsroom. Not without turning a newspaper into something that isn't a newspaper.

This isn't just the staff's opinion. The Online Publishers Association earlier this year published a telling article by New York Times technology contributor Mark Glaser that looked in depth at the real and overblown effects of convergence for media companies, the grand idea that says you can do more immediate journalism dispersed through TV, print, the Internet and cell phones with fewer people, so long as you combine your media forces.

"Instead," Glaser writes, "the early convergence experiments combining print, broadcast and online operations are finding that they need more people to do more work." He goes on to debunk several myths now held dear at Belo, including that convergence will save you money or jobs and that you can increase circulation without adding more staff. (It does help you, he says, in terms of PR and "branding," hardly a reason to bet the company.)

Why won't these principles of convergence work in a newsroom when they work at a cereal company or a tire manufacturer?

Any journalist can tell you. You just have to ask them instead of the suits.

Because newspaper reporters and editors are stupid people who got into this business for silly, romantic notions. They wanted to help people. They wanted to tell great stories. They wanted to call themselves " a writer." They wanted to use their ego for good instead of evil.

True, along the way, they usually forget that. They spawn and they acquire a mortgage and they start to become bitter about the fact they know people who are dumber than they are making sweet money as a lawyer or a real estate agent or, heaven forbid, a consultant. They start to ask why they're still trudging to work, buttonholing city officials who hate them, asking mean questions, struggling to make enough sense out of a shooting or a drug bust to write 18 inches of copy that tries desperately to put it in perspective.

Then, one day, surprisingly, they remember why they got into the business. Because, a few days a year, it is noble. Once in a while, you help someone. You write something nice about a family member. You put life in perspective for those who grieve. You shine a light on scandal and corruption. You make someone laugh. You discover a story untold.

That's the reason the best people in a newsroom stay. Not because circulation is growing. Not because new eyeballs are reached. As soon as you take away their belief that the small, occasional joy will some day come from their work, they will leave. Most other crap jobs pay better. Those who take their place will be younger, will not drink or smoke, will talk of brand identity and repackaging content, will wear nice shoes. And the good paper will die.


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