IN
THEIR OWN WORDS
The Harris Resignation
Steve
Rossi
Rossi
is the recently named president of the Knight Ridder newspaper
division and a fifteen-year business executive at the company.
Following a budget meeting earlier that Friday, March 16, Rossi
sent an e-mail memorandum to the Mercury News's publisher,
Jay Harris, raising a number of issues and asking him to respond
by Monday noon. Here are some excerpts:
CONTENTS:
I would recommend taking a hard look at the recent reader research.
If the Mercury News's market is similar to our other markets,
the research will indicate that readers want more local news.
The Mercury News front pages are consistently local and
compelling, while the inside of the A section is very heavily
weighted toward foreign news. This may be something to reconsider.
Readers want tighter editing, and they want relevance. They want
to know why the story is important to them, and they want to see
clear utility.
PROFITABILITY:
The key thoughts to keep in mind here are that the margins of
the Mercury News have ranged between 22 percent and 29
percent over the past 10 years, largely dependent upon the strength
of employment advertising. We need to move that range up in order
to be in step with the goal to move KR's overall margins up. The
Mercury News' controllable margins (revenue less operating
expenses excluding newsprint) have slipped down over the past
few years.
Jay
Harris
Here
are excerpts from Harris's March 19 reply to Rossi and to Tony
Ridder, Knight Ridder's c.e.o.
Steve
asked to review my thoughts on how to proceed at the Mercury
News in light of the current economic downturn. I will share
them in this memo.
I
also use this letter to submit my resignation as chairman and
publisher of the Mercury News.
I
do so with deep regret.
But
I resign in the hope that doing so will cause you to closely examine
the wisdom of the parameters for 2001 profit Steve gave the Mercury
News senior executive team in our meeting Friday. Meeting
the goal will necessitate deep and ill-advised staff and expense
reductions at the Mercury News.
*
The profit target Steve laid out on Friday cannot be achieved
short of layoffs. I recommend, therefore, that a lower target
be established given the mutual desire to avoid layoffs.
*
Given the substantial number of our readers, and residents of
our community, who were born in other nations, the equally significant
number employed by global businesses, and the many readers for
whom such news is a priority, I would recommend that the weighting
is proper and should not be changed.
*
Steve told me that Tony has approved a change in the long-standing
guideline that Knight Ridder newspapers return to their communities
one percent of their annual operating profit. I recommend against
this.
*
More important than anything else, I recommend that you take greater
time and the appropriate care with the appropriate decisions ahead.
Particularly important are those decisions that will affect the
quality and reputation of the newspaper.
Tony
Ridder
Late
Monday, March 19, a memorandum to the staff was issued by Tony
Ridder (and three other Knight Ridder executives).
This
is a sad and difficult time for all of us. We are deeply sorry
about Jay's resignation. It came as a surprise. We asked him to
reconsider, but he would not.
We
want to tell you about our meeting with Jay and his top managers
on Friday. The meeting was attended by Steve Rossi, president
of the newspaper division, Jerry Ceppos, vice president for news,
Mary Jean Connors, senior vice president for human resources,
and Garry Effren, vice president and controller of Knight Ridder.
While the meeting was tough and candid, Steve made clear that
he wanted no layoffs of full-time newsroom employees and hoped
to avoid layoffs of full-time employees elsewhere in the building.
He conceded that this might mean restructuring in some business-side
departments but stressed that he, like Jay, did not want to damage
the long-term future of the Mercury News. We think it is
important that you know that.
Jay
Harris
Harris
was the closing speaker on Friday, April 8, at the American Society
of Newspaper Editors convention in Washington. Excerpts:
It
was the conviction that newspapers are a public trust that brought
me to Knight Ridder in 1985.nnnnnnnnnnnnnn
I understood then and understand even better today that a good
newspaper and a good business go hand in hand. Indeed, without
a good business it would be impossible for a newspaper to do good
journalism over the long haul.
But
at some point one comes to ask what is meant by a good business?
What is good enough in terms of profitability and sustained year-to-year
profit improvement? And how do you balance maintaining a strong
business with your responsibilities as the steward of a public
trust? Maybe that is the most important question because our business
-- if you approach it as a public trust as well as a business
-- is different from most businesses.
Most
businesses can reduce expenses more or less proportionately with
demand and revenue without doing irreparable damage to their core
capabilities, their market position or their mission. Manufacturing
businesses are a good example. When fewer items are bought fewer
items need to be made and layoffs in various areas are possible.
But news and readers' interests do not contract with declining
advertising. Nor does our responsibility to the public get smaller
as revenue declines or newsprint becomes more expensive. That
is where the balancing act comes in. That is where the character
of leaders comes in and the priorities they set.
A
publisher wrote me this week to say he respected my decision to
resign and hoped I would respect his decision to stay in the job
and put out the best paper he could for his community. And that
newspaper is still quite good.
Not
only do I respect his decision, I know it is the right one if
we are to set the balance right again.
We
need people like that publisher working on the inside to support
good journalism and build healthy businesses. Great institutions
fail when they are overcome by a corrupting ideal or when the
good people who sustain them lose faith and leave.
I
made the choice to work from the outside. As Nancy Woodhull, a
friend and talented editor who died too soon used to say, "It
is much easier to rock the boat when you're not in it."
Tony
Ridder
Excerpt
from April 6 column in Mercury News:
I
was as surprised by Jay Harris's resignation as anyone reading
this column. I learned of it a few minutes after he announced
it to the Mercury News staff via e-mail. He came to the
Knight Ridder office, stayed only a few minutes and made clear
that he did not wish to discuss the issue with anyone on the corporate
staff -- including me. That, too, was surprising; I was in my
office at the time. To this day I still haven't heard from him.
I
have known Jay well, and worked closely with him, for more than
twelve years. In late 1988 he came to Miami from the Philadelphia
Daily News, where he had been executive editor. I had picked
him to be my assistant. In early 1994, when the Mercury News'
publisher's spot opened up, I was more than pleased to be able
to appoint someone of Jay's caliber.
Now
here we are seven years later. It has ended badly, and I probably
will never know everything that went wrong. But this I do know:
Times are a lot harder in 2001 in the newspaper industry (actually,
in all media supported by advertising), than they have been for
a long time. And they are especially hard in the nation's high-tech
heartland.
Nobody
knows how long a downturn will last. Nor, in the early stages,
how severe it will be. So you trim the sails to be ready for whatever
rough weather may come your way.
While
I find all of this distressing on many levels, the worst of it
-- by far -- is the hurt I perceive to two of the entities I love
most in this world: the San Jose Mercury News and the community
it serves.
I
was privileged to participate in some of the important events
that helped to shape the San Jose we have today. That I might
participate in permitting a cyclical downturn in the economy to
damage them is unthinkable.
