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The Herald, like other Knight Ridder holdings, is under intense pressure to lift sagging profits. And the Herald has its particular challenges. From 1990 to 1997 average daily circulation plunged 17.9 percent -- from 427,536 to 350,992. The percentage of households receiving the paper in Miami Dade County fell from 37.9 percent to 31.7 percent; in the more suburban and Anglo Broward County, penetration dropped from 18.1 percent to 15.1 percent, even though considerable resources were thrown into that front. The Fort Lauderdale Sun-Sentinel, a tough competitor, also lost ground in fast-growing Broward in that same period, with penetration slipping from 36 to 31 percent.
Central to Ibarguen's vision for the Herald are five new Goss presses being installed in Miami at a cost of $110 million. Three went on line before the end of the year; the remaining two are expected to do so by mid-1999. The presses will allow the paper to add more color, produce additional sections, and roll out a variety of new products. For example, the new publisher says the Herald is exploring the free weekly and community newspaper markets.
The rest of Ibarguen's plan echoes some of the old themes -- staff cuts, aggressive expansion in Broward County -- and adds a new one, what the staff has termed "extremely local news." The Herald's three principal products -- the Miami edition, the Broward edition, and El Nuevo Herald -- all will expand local coverage. Each will further develop its own personality, unlike the Lawrence years, when the Herald was seen as a unifying voice for a diverse and complex community.
New twice-weekly subsections in South Broward will target communities as small as 30,000 people on PTA meetings, zoning disputes, church fairs, etc. The Herald's international edition -- long the paper of choice for business travelers in Latin America -- will offer less Latin American and more U.S. and Miami news.
The paper has enlarged its investigative team as well as its sports and business coverage. Expanding coverage while reducing staff has required some creative newsroom shuffling, including the merger of editing desks. In December, the paper killed the Sunday Tropic Magazine, once one of the most respected of its kind.
Michael Beebe, a newspaper analyst with Goldman Sachs in New York, likes the strategy. He says readers are asking dailies to cover the local stories that other media are not equipped to do, while advertisers are demanding the kind of narrow geographic and demographic market access that community sub-sectioning allows. John Morton of Morton Research, Inc., in Silver Spring, Maryland, notes that for years the Herald has been adept at squeezing out profit amidst falling circulation and disappointing ad sales. The challenge now, he says, is to increase profits through growth in circulation and ads rather than cost containment.
Compounding the challenge is the Herald's somewhat diminished status within Knight Ridder, which abandoned Miami earlier last year for a new corporate home in San Jose. Not long ago the Herald's publisher was widely regarded as the second most powerful figure within Knight Ridder, just after the c.e.o. No more. Today many analysts rank the paper third in importance to Knight Ridder, behind The Philadelphia Inquirer and The San Jose Mercury News. The flagship distinction, Morton says, is gone.
Ibarguen, disarmingly candid, shrugs away such talk: "Is The Miami Herald Knight Ridder's flagship newspaper? Probably not. Does Knight Ridder even have a flagship newspaper? Probably not. What it has is thirty newspapers which all must carry their own weight. My job is make that happen at this one."
By Rita Beamish
Ad sales and circulation figures interrupted Mark Willes's California dreaming in 1998. Willes set high goals in his first year as publisher of the Los Angeles Times. And some numbers, in fact, were up -- just not as much as he had hoped.
When he took over as publisher in October 1997, Willes said he aimed to sell 50,000 more daily copies in 1998, en route to a 500,000 increase in daily circulation -- this at a newspaper that was hovering just above a million. When it instead posted lower but still respectable circulation gains -- in a period when most dailies are struggling to hold circulation -- the Times settled for crowing about surpassing The New York Times as the nation's largest metropolitan daily.
The Los Angeles Times's average daily circulation rose from 1,050,176 in the six months ending in September 1997, to 1,067,540 a year later, a gain of 17,000. The New York Times slid some 8,000 to 1,066,658. (The L.A. daily sells for 25 cents, it should be noted, while the New York paper goes for 60 cents. On Sundays, New York still reigns, at 1.6 million, though it lost nearly 32,000. L.A. was essentially flat at 1.36 million.)
But operating profits slid, with Los Angeles Times officials projecting that 1998 would end with an 11 percent drop from the previous year. Ad revenues, which have been creeping up on an annual $900 million, grew a disappointing 2.3 percent in the first ten months of the year. The Times did pull in new ads, notably in the jazzed-up business section and in new sections on health and the "car culture" of California. But this wasn't enough to lift revenues to anticipated levels. Classifieds, accounting for 30 percent of the paper's ad revenue, also carried some blame, with Help Wanted sections shrinking as a result of the Asian economic crisis and contraction in the aerospace industry.
"Let me start with the headline: 1998 was a tough -- and disappointing -- year for the L.A. Times," Kathryn Downing, the paper's president and c.e.o., told analysts at the annual PaineWebber Media Conference in December in New York.
Still, in Willes's first year, the Times has launched a national edition, neighborhood sections, and campaigns to attract female and Latino readers. Boosting its community profile, the paper sponsored its first televised gubernatorial campaign debate, lured 6,500 people to a small business conference, and announced it would spearhead an ambitious childhood literacy program.
Staff cuts were announced in November, with the 1,100-strong editorial staff tapped for a thirty-person reduction. Overall, the paper trimmed its workforce by 250, the first of three planned "cost-reduction phases," and more staff cuts were anticipated by the end of 1998.
"We were hoping for more of an uplift than we've been able to achieve in several sections," says editor Michael Parks, citing sports and the life-style feature section, which got a facelift on November 1. "We don't know to what extent that's a result of our difficulty in getting the new model up and functioning."
The "new model" in part includes Willes's approach of putting editorial and advertising heads together on ways to attract readers and advertisers. So far, at least, the idea seems to be more controversial outside the paper than within it, according to several hard news reporters.
Parks said the newspaper is realigning staff to match reader interests in education, health, and finance. Reporters have been added on those beats, and on the national staff and Southern California Living, the renovated daily feature section. Management pared the suburban Ventura and San Fernando Valley staffs, and sprinkled a dozen Spanish-speaking reporters throughout the paper to focus on coverage of Southern California's Hispanics.
