The owner and publisher of the Orange County Register announced Tuesday mandatory and company-wide furloughs in June and July.
It is offering buyouts to its newsroom staffers, and will kill its standalone Long Beach Register and fold it into a section of the Los Angeles Register — some seven months after the launch of Long Beach Register and just seven weeks after the debut of the L.A. Register.
In a memo to the staff, Freedom Communications Inc. owners Aaron Kushner and Eric Spitz said the cuts are necessary for the long-term stability of the company.
"To continue to invest and grow over the long term, we have to align our cost structure with what we now know we can achieve in revenue growth. Doing so will not be easy and will impact all of us, but it is necessary to ensure a strong and healthy future for our newspapers."
Kushner bought the OC Register in 2012 and has significantly beefed up its staff and widened its focus. A year later, he bought the Press-Enterprise in Riverside and succeeded in expanding his print empire to Los Angeles County with the launch of the Long Beach paper. The Los Angeles Register launched in April.
What is the financial condition of Freedom Communications right now?
"We are growing and are continuing our significant investment in the Los Angeles Register, which launched about six weeks ago, and our expansion in quality investment in the Orange County Register, The Riverside Press-Enterprise as well. We have seen and experienced that growth already and are looking forward to a very long term and healthy future.
"The moves that we had to make in terms of our internal cost structure are about aligning our bold investments in community building and the future of newspapering with the results which we are seeing, which are growth, but at a more moderate rate than what we had invested in terms of our internal cost structure, so being able to, over the long term, continue to invest in building community with the Los Angeles Register, with the Orange County Register, that's the focus of our moves over the last few days."
So it sounds like you've hired more people than you could pay for, because the revenue projections weren't what you expected?
"Like any business that makes bold investments in its community and itself, not every investment turns out exactly the way you would like for it to, and you evolve and adapt based on the success that you're seeing."
How are you going to handle things with your entire editorial staff taking two week unpaid furloughs?
"Not at all, we have one of the hardest working and largest news organizations in the country, not just even in Southern California. We have dramatically expanded the depth and breadth of what we cover with our staff, and we will continue to significantly over-deliver in value for our subscribers in Los Angeles, our subscribers in Orange County and our subscribers in Riverside and San Bernardino as well."
What do you say to your employees who now are very worried about the future of the papers?
"We have over doubled the size of our newsroom and, yes, unfortunately some of that wonderful talent will have to find their success elsewhere. After our restructuring is concluded, we still will have significantly more great journalists than we had when my partner and I bought the Register and started expanding and growing the value we're providing almost two years ago now. We're highly confident that the team as it continues will be able to continue to deliver against our mission of community building. ...
"We have a very large, significant, talented team, not just of journalists, but across our entire organization. No one said it was going to be easy to get a great newspaper growing and to have a great newspaper that is building community and improving its quality. We've faced harder challenges, including launching a major newspaper in Los Angeles successfully, and I'm sure we'll face other challenges over the years to come. As a team we'll get through them, and as a community hopefully we will as well."
From the beginning there was tremendous skepticism in the launch of the L.A. Register:
"We invested in community building, not in print, not in digital; we invest in our communities. I don't believe our communities are going to need less news and all of our marketing and advertising services next year or 10 years from now. I believe they're going to need more, and we are committed. That's what our moves this week are about: a vibrant, healthy, growing, long-term future where we are serving our communities and delivering great value for them."
What leads you to believe the L.A. Register would be able to compete with the L.A. Times?
"You mischaracterized what we're doing with Long Beach. It's not that we weren't successful. We were and are being successful in Long Beach. The Long Beach Register has grown up and is now the fully developed Los Angeles Register. So we have bureaus in Long Beach, in the Valley, in Pasadena, along the coast, and it has now blossomed into a full Los Angeles Register covering in depth all that is in Long Beach as well as the balance of Los Angeles County. We're very excited about the growth in Los Angeles, and our staff in Long Beach continues to do great work and will continue to do great work. ..."
I apologize if I mischaracterized your success in Long Beach. What is your circulation versus the Press-Telegram?
"We don't evaluate our circulation relative to any other particular newspaper. We're building for the community, and we're building an institution measured over 10-plus years. I couldn't comment on what our circulation is relative to anyone else's circulation.
"I can only comment on the caliber of the content that we produce, how it is taken advantage of and used well by local advertisers, and how it's doing from in terms of building over a long period of time — home delivery and single-copy circulation, all three of which we're very pleased with and are on their path toward a long-term, vibrant future."
What is your staffing at the Press-Enterprise compared to when you started the paper?
"We have basically worked with the Press-Enterprise, which is a great institution and a really hard-working and talented team. We have worked to augment what we're able to provide in that market. The product has now completely upgraded into its new form and factor, and we've been able, I think, to do a great job of really focusing on local reporting, local opinion, and really delivering and upgrading how much value we can deliver for our subscribers and advertisers.
"We love the Press-Enterprise. It's a great franchise. It's growing actively both within Riverside County and also in terms of what we're able to provide in terms of community building for San Bernardino County, as we have a growing subscriber base. We're very optimistic. We think that the team we inherited is really committed and engaged with the community and producing great journalism and delivering a lot value for local advertisers. It's a market that really values and cares about and supports its newspaper, so we're very optimistic about the long term future of the Press-Enterprise."
How has the paywall affected the website?
"It's hard to say because there aren't a lot of templates where you can say, 'Here's exactly what's going to happen when you make bold news investments,' like we have been in a long-term future for the Register. In this particular case, we add a lot of value for our subscribers, digitally. We have a paywall because we believe the work that our journalists do is worth something and therefore we should be compensated for it. We also do have a lot that people can snack on and sample, if you will, and get a sense of what's the value that we provide that is outside of the paywall. It's a blend, and we're constantly evolving and evaluating it.
"We are still one of if not the largest digital hubs in Orange County and traffic is growing as are our visits and as are the results we're able to deliver for our advertisers, digitally. I think digital is a very important part of what we do and an important part of our long-term future. It's not the only thing that's growing; in fact, we're growing print even more than we're growing and working on digital. I think it's all part of the whole. It's about how we build community in Los Angeles and Orange County, in the Inland Empire over the long term."
I have to say, if I worked for you, hearing your description and the lack of specifics, I'd be very nervous about the future.
"Any other questions?"
Speak to that, please, what do you say to your employees? How do you convince people that things are going to go in a positive direction?
"Our employees who actually see our numbers and understand what we're doing as a private company see and feel every day the growth that we're experiencing."