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.