Thursday, April 03, 2008

Taking stock

Fifty cents won’t buy much these days. Two quarters is one short of a soda can at most vending machines, a dollar short of a large coffee and a nickel less than the toll to ride the Thruway from downtown Albany to Schenectady. A half-dollar coin won’t buy you a pack of gum at the supermarket, a load of laundry at the Laundromat or pump much more than a couple of pints of gasoline in your vehicle. Two quarters won’t take you very far in today’s economy.

Fifty cents will, however, buy you a Monday through Saturday edition of the Saratogian. And it’s a sum ample enough to purchase a sliver of the company that owns this plummeting publication.

As if the Spa City’s alleged hometown paper needed any more bad news, the Journal Register Company stock sank to 43 cents a share last week, bringing its value to an all-time low. To put this in perspective, JRC was trading at $12.18 per share exactly two years ago and $6.16 just last year. The decline was precipitous enough that the New York Stock Exchange stopped floor trading of JRC stock last month and warned the Pennsylvania-based penny pincher that it would delist its stock if the company doesn’t bring its price-per-share up to a dollar by October. Some are even speculating the rapid decline will force JRC into liquidating its remaining assets.

Taking a quick gander at JRC’s profile, there’s really no mystery why its stock is doing so miserably. Numbers across the board wandered into negative integers between 2006 and 2007. Total revenue dropped by more than $43 million; operating income dropped $119 million, just a year after it increased $51 million; and the company posted a fourth-quarter net loss totaling more than $148.4 million.

The drastic decline of JRC marks a year of wanton mismanagement, starting with the sale of 18 percent of its daily newspaper holdings in February 2007 and culminating in the hapless promotion of two upper-level executives in September as the company’s stock plummeted. Most business aficionados would attest that these moves –having an asset fire sale and promoting a pair of boot kissers to high paying jobs –aren’t the type to make when a company’s stock is in free fall.

Up until recently, Robert Jelenic was the corporate conductor of this off this runaway train; JRC’s Nero tuning his fiddle while playing with matches. He was known in the industry as the type of guy who would come in, gut a newsroom, slash news content and rely almost solely on advertising sales to boost revenues. Marcel Dufresne, a University of Connecticut journalism professor, once opined the company formulaically reshaped its acquisitions by promoting content around personalities and galas, rather than issues.

“It’s pillow-soft local news, kind of like the 1950s boilerplate when every Little League team had its picture in the paper—not the kind of hard focus on issues and events which affect people's lives,” he told the Philidelphia City Paper in 1998, just a few months after JRC bought the Saratogian.

And it’s the type of journalism easily produced by college interns and recent graduates; those content to see their byline in print, even if their boss is a moron and their paycheck isn’t much better than the one earned by fast food fry cooks. Meanwhile, Jelenic and his cronies quite literally made millions. Between 2003 and 2007, the chief executive officer made off with $7.1 million primarily from selling JRC stock, according to federal Security and Exchange Commission filings

All the while, the company was sending out directives to its news outlets to sell more advertising and cut expenditures to somehow right the sinking ship. Jelenic has since been stricken with cancer and was replaced by John H. Hall, a rube who promptly surrounded himself with the same shills his predecessor had relied upon for so many years. Still, the company managed to rope in $419 million in gross profits in 2007. But it didn’t make much of a difference in the end, when the company shelled out $521 million between interest payments, overhead, taxation and most of all, payroll.

Much like the Saratoga Springs newspaper it owns, JRC is top-heavy with top-tier salaried executives. The result is less money for the grunt workers operating in the trenches and doing the hard work to make the company its money. Rather than shedding a few boot kissers or adopting a more fiscally reasonable policy, the company continues to slash away in the areas that actually earn it money. This brand of mismanagement is something that seems to transcend JRC papers, as one vitriolic blogger has painstakingly chronicled.

What does all this mean for the Spa City? Regrettably, not very much. JRC will probably continue its death spiral, as all of its assets are pretty much worthless unless a buyer comes along with a boatload of working capital. Fixing the Saratogian would be akin to renovating the pair of rotting Victorians on Phila Street. Sure it can be done, but the amount of money and effort needed is enough to scare away even the most intrepid of venture capitalists.

Meanwhile, recalcitrant “managing editor” Barbara Lombardo continues to cash a paycheck, despite clearly taking no interest in her job whatsoever. Her failed blog is riddled with glaring grammatical errors and she clearly doesn’t care enough to make corrections. Even her column contains the sort of careless mistakes one would expect of a freshman reporter, but not a so-called managing editor of more than three decades.

Only time will tell what the paper’s ultimate fate. Most likely, the suckfish and yesmen at JRC will continue to load their lifeboats with the booty they’ve plundered from the sinking company, while honest employees frantically try to bail out the rising water. In the end, its assets will probably get swallowed up by a larger shark in the ocean, allowing the failed policies of corporate journalism to continue.

Editor’s note: a belated thanks to those who sent tips about JRC’s waning stock numbers. We all knew it would happen at some point; thanks for pointing it out at such a poignant time.

22 Comments:

Anonymous Anonymous said...

At least their parking lots worth something

5:14 PM  
Anonymous Anonymous said...

This was a very thoughtful and concise opinion. However you are wrong.

The decline of the Saratogian newspaper can be traced directly to the desk of one Thomas McTygue when he was commissioner of Public Works. Who else could cause such a decline of a beloved institution.

Now that McTygue is gone, the continued free-fall of our most noble and courageous newspaper has been encouraged by, and indeed facillitated by, none other than one of McTygue's sworn political enemies, John Frank.

These men I can assure you are the responsible parties!

5:15 PM  
Anonymous Anonymous said...

JRC is the ultimate example of what's wrong with journalism companies today. You don't have to work there to know it, either. Even penny-pinchers like Gannett or Lee find JRC's tactics heavy-handed, which ought to tell you something.

If you ever read the finance page at Yahoo for JRC you can get a taste of undiluted bile from employees and former employees. It's really a hilarious read, especially if you've worked with anyone you suspect posts there. Give it a shot; I can't recommend it enough: JRC on Yahoo.

7:25 PM  
Anonymous Anonymous said...

Anonymous 5:15pm,

We get it... John McTygue's name has been unfairly used on this blog many times. Point taken. Now please, stop making the same stupid joke over and over because we're bored to death. Get some new material, or take on a hobby.

Even John McTygue wants you to stop.

PS- Quote from Wikipedia:

"In September of 2006, JRC was named one of the Ten Worst Managed Companies in America by 24/7 Wall Street."

3:13 AM  
Blogger Faulkner said...

Shakespeare's Macbeth:

"Life's but a walking shadow, a poor player, that struts and frets his hour upon the stage and then is heard no more. It is a tale told by an idiot, full of sound and fury, signifying nothing."

Yet... some idiots are more well-spoken than others.

3:40 AM  
Anonymous Anonymous said...

John McTygue ?

6:21 AM  
Anonymous Faulkner Wannabee said...

3:13 Obviously you don't get the point! John McTighe is not a cross between John Franck and Tom McTygue. John McTighe is a reference to a follower. John Franck is an alright guy. The two others are mooks. As far as your Shakesphere, you can keep it. How pathetic are you thinking quotes from this fag make you intelligent.
If you are so bright why won't you tell us all what great deeds you've done that make you anymore special than I?

1:57 PM  
Anonymous Anonymous said...

Sometime soon, the Saratogian will be on the market.

If it's not already, sotto voce.

JRC would be wise to try to sell it, before it's auctioned off in JRC's inevitable bankruptcy.

Whatever, the Saratogian will soon have a new owner, and a real managing editor to replace its current "managing editor."

6:56 PM  
Anonymous local loco said...

Hey Faulkner! Forget Shakesphere! Here's some Jethro Tull

"You may make me feel but you can't make me think. Your sperm's in the gutter, your love's in the sink."

7:30 AM  
Anonymous Anonymous said...

"How pathetic are you thinking quotes from this fag make you intelligent."

This fag?

First it was jews now homosexuals.You really are one sick puppy.

1:12 PM  
Anonymous Anonymous said...

Talk about assinine comments. Who gives a shit about the saratogian? All newspapers are bullshit! Especially the post star!

1:37 PM  
Anonymous Anonymous said...

The New York Times reports today that Journal Register is on the brink of bankruptcy.

Which is good news for the people of Saratoga Springs.

Once the dust settles, maybe they'll get a real newspaper.

6:51 PM  
Blogger Faulkner said...

Faulkner wannabee,

Well done. Your post just proved my point.

Shakespeare wasn't gay. And I agree... you are a lot more "special" than myself.

"Edward was at the stage of drunkenness in which the ego glows like a coal, and brilliant people become more inspired, but in which dull people, fired by the same inspiration, become only more dull."

William Styron, Lie Down in Darkness

1:32 AM  
Anonymous Faulkner Wannabee said...

Faulkner:

You are so right! I am more Special than you! As a matter of fact I went to special classes my whole life! That still doesn't make you smart because you quote
Shakesphere.

"Some of the most significant moments of our lives go by as fast as you walk down a street and brush up against a stranger in a crowd. At the time you don't realize it, thinking there will be other times, but knowing later that was the only time."

Carmine Ragusa

9:16 AM  
Blogger Faulkner said...

Faulkner wannabee,

Dude, you are making it too easy. Who is "Shakesphere?" Is he a round cousin?

And I had a feeling about the special ed classes. Now get back in your cage.

10:22 AM  
Anonymous Marley said...

Who's that leatherneck in your picture? Is that your poppa?

Dude? Are you forever lonely in your eccentrifical force? Sick puppy indeed! First, you bash jews! Then you bash Gays! Now, you are bashing the mentally handicapped. Get back in your cage? What a man!

12:57 PM  
Anonymous Anonymous said...

“Now, you are bashing the mentally handicapped.”

HELL NO we love the mentally handicapped. Without them who would write these asinine comments like yours that I find so amusing.

2:39 PM  
Anonymous Marley said...

What a man! This is your way of making yourself feel superior. Typical male behavior! Pick on the the unexpected and defenseless. Pad that male ego.

4:02 AM  
Anonymous Anonymous said...

JRC lost 0.33 / -63.46% now at 0.19-2:55pm ET

The end is near

The only sad thing about this is if there was any justice in this world Barbara Lombardo’s entire retirement package would be in JRC stock.

But who said life is fair.

Man the life boats boys the end is near.

12:22 PM  
Anonymous Ned Flanders said...

I heard that a local group made an offer to buy the Saratogian from JRC late last year, but their offer was rejected as too low. Ive heard invididual names mentioned, but without verification, I don't think it would be proper to list them here.

We all know what will happen--another chain paper will come in and buy it.

"Meet the new boss, same as the old boss..."

Nothing changes.

7:16 AM  
Anonymous Anonymous said...

Ned -- there is no chain worse than Journal Register, so the new boss will be better than the old boss.

And, if local types put in the same offer today, it might be accepted.

Two things about Journal Register papers -- all of them are substantially worse, economically and editorially, than they were when JR acquired them; and they are worth a lot less than JR imagines them to be.

And getting cheaper by the day.

3:27 PM  
Anonymous agphoto said...

a message just now on the great saratogian website (no comment needed):

Dear user, Thank you for using our Web site. We are currently experiencing technical problems with the site you are trying to view. We expect to have these issues resolved shortly. Please check back in a few minutes to access the site. We apologize for any inconvenience this causes. -- Journal Register Company

10:36 AM  

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