1. How much is The Providence Journal worth? To many in Rhode Island it’s a priceless civic asset, but to a potential buyer it’s a business enterprise with an uncertain future. How do you estimate the valuation of an individual newspaper when the whole industry’s future is in doubt? Remember that A.H. Belo has kept The Journal quite profitable – cutting the staff in half will do that. While the paper’s annual revenue has dropped by 38% since 2007, its revenue per employee has stayed at more than $200,000; Ken Doctor estimates its current EBITDA at roughly $12 million a year. The concern for any buyer, then, won’t be huge losses but rather huge uncertainty. How much more room is there to cut expenses if sales keep declining? At what point have you done irreparable harm to the enterprise? And even if you invest in great journalism, as the Providence Newspaper Guild’s John Hill suggests, how confident can you be that a viable business model will be found? The Boston Globe and its Worcester sister paper went for $70 million a few months ago, but that deal included The Globe’s valuable property on Morrissey Boulevard; A.H. Belo is selling the Projo newspaper separately from its Fountain Street headquarters. Another key factor is how desperate CEO Jim Moroney is to sell The Journal. It’s possible some prestige-minded local group will cough up $40 million for the paper, but don’t be surprised if Moroney accepts far less than that.
2. Want to learn more about The Providence Journal’s situation? Nesi’s Notes has you covered. If you’re looking for a video, watch my appearance on Dan Yorke State of Mind from Thursday night or our Newsmakers roundtable with John Hill and Ian Donnis. For the written word, start with my WPRI.com story on the news and second-day update. On the business side, we have the latest circulation statistics (76,000 on weekdays) and the latest revenue numbers ($23 million in Q3). From the archive, there’s an overview of 2012 Projo revenue, a 2010 story on how much the paper might sell for, a post comparing the Projo and The Globe, and 2011 posts on the outlook for the paywall and the paper’s underfunded pension plan.
3. Providence mayoral hopeful Brett Smiley doesn’t sound too sanguine about the city’s financial health despite three years of work by Angel Taveras and his team to right the ship. “I think the mayor has bought us some time, a window of opportunity for us to grow our economy, to meet the challenges,” Smiley said on this week’s Newsmakers. “If we muddle along or accept the status quo, I do think it’s possible that five years from now we could be back talking about bankruptcy. But that’s why I’m running, because I don’t accept that. I think that we need to hit the ground running. I think we need a period of sustained execution.” (Note the subtle critique of Taveras’s decision to seek higher office after one term, a point that Smiley rival Lorne Adrain is also making.) This week’s federal court ruling allowing Detroit to pursue bankruptcy – and to cut pension benefits – is a reminder of the road not taken so far by Providence. There was only $284 million in Providence’s pension fund on Oct. 22 to cover a long-term liability that stood at almost $1.2 billion – after the landmark settlement Taveras reached with unions and retirees. The next mayor won’t be able to seek further concessions on pensions “anytime soon,” Smiley warned. “I think the solution has got to come from economic growth first, to see what resources we can bring to the table to help fulfill the obligations that we have made to those who have worked on behalf of the city.”
4. I reported last week that Bill Fischer was assisting Cumberland Mayor Dan McKee with his bid for the Democratic lieutenant-governor nomination, but it turns out that’s not the case. Fischer tells me that he agreed to help McKee roll out his campaign but he’s not going to be a part of it down the stretch. McKee vs. Ralph Mollis could be an unpredictable contest, especially with uncertainty on the GOP side.
5. Slate’s Matt Yglesias thinks it’s time Brown University and its fellow Ivies expanded their enrollment to keep up with population growth – perhaps by building new campuses in neighboring cities. College Hill is pretty packed already after all, and, he writes, “I bet Bridgeport and Fall River would love to host Yale II and Brown II.” Like Yglesias, I doubt this will happen anytime soon (just listen to Brown President Christina Paxson’s recent Executive Suite interview). But he makes a good point.
6. A special Saturday Morning Post dispatch from my colleague Tim White:
I’d never seen so many people in my life.
Hundreds of thousands of men, women and children jammed in and around the Boston Esplanade on June 23, 1990, hoping to get a glimpse of Nelson Mandela speaking at the Hatch Shell.
The atmosphere was like a party: musicians played (Bobby McFerrin stands out for some reason), people danced, all celebrating Mandela’s recent release after more than two decades in a South African prison. It was electric.
I was 16. This was before 9/11 or the Marathon bombings, so the threat of terrorism didn’t loom large the way it does now. But still, Boston had a spotty history (to put it mildly) on race relations. I called my mother the other day to ask if my parents were apprehensive about letting me take a clown-car-like journey to the city with my friends.
“Oh no,” she said. “We wanted you to go.”
In my house you watched the news, so I certainly knew who Nelson Mandela was. Admittedly, the initial draw was to spend a day in Boston with my friends – Stephanie, Chris, Melanie – but even my addled 16-year-old psyche understood that I was set to get a front-row seat to history.
Mandela was there to thank Massachusetts – and Boston in particular – for being an international voice against apartheid: Senator Ted Kennedy had famously (and dangerously) stood on South African soil to denounce discrimination there five years earlier.
My friends and I found a spot at the edge of the Esplanade and waited with thousands of our closest friends for the ambassador of peace to arrive.
I’m slightly ashamed to say I don’t remember what Mandela said – to be honest, I had trouble understanding him through his accent. But I recall that everything seemed to stop when he took the stage. My friend scaled a tree to try and get a better photo of him, and all around us people craned their necks looking to capture a mental picture of their own.
When I learned that Mandela had passed away on Thursday, I thought a lot about our trip to see him. I wondered what I took from it as a teenager, beyond the thrilling event itself.
For sure, Mandela’s visit was far more meaningful to many of those in that diverse crowd that day than it was to a white kid from a Massachusetts suburb. But the moment still resonates with me. Seeing and listening to a man who spent much of his life imprisoned because he fought for a free society, it was the first time I truly understood what freedom meant.
7. There was never much doubt Lincoln Chafee was on the wrong side of popular opinion when he pushed to call the State House spruce a “holiday tree” rather than a “Christmas tree.” As I wrote last year at this time, there was a noble impulse behind Chafee’s thinking, but he never seemed to grasp that a period of huge economic uncertainty is an especially bad time to challenge beloved traditions. Yet prominent liberal blogger Ed Kilgore thinks the governor has also been the victim of journalism that “not only entirely misses the historical context but adds a little conservative agitprop.” Reacting to Lucy McCalmont’s Politico story about this week’s episode in the saga, Kilgore wrote: “So originally, ol’ Linc wasn’t honoring his state’s ancient traditions (civil and religious), but was waging a ‘war on Christmas,’ which he’s calling off now that he knows it’s a mistake to be ‘politically correct.’ [Bill] O’Reilly couldn’t have said it better, or more ignorantly.”
8. What’s next for RISD? John Maeda is stepping down as the school’s president after just six years to join the prominent VC firm Kleiner Perkins Caufield & Byers as a design partner. Maeda’s sometimes controversial tenure pushed RISD in a new direction as the school focused on industrial design as much as art – illustrated by his decision to have Twitter co-founder Jack Dorsey speak at RISD last winter. “I’m proud of what I’ve accomplished,” Maeda told Fast Company, “to raise the spirits of the school, to be known as the No. 1 design school in the world, to at the same time lower costs, so we’re no longer the No. 1 most expensive art school.” The question now is whether the board of trustees will decide to continue on that path or instead return to the more traditional arts orientation of Maeda’s predecessor, Roger Mandle – a decision that could have big implications for economic development in Rhode Island.
9. If you missed them the first time around, now’s your chance to check out some of the items Dan McGowan and I published this week: HealthSource RI’s Christie Ferguson says the botched Obamacare rollout has been “somewhat devastating” for her agency … Providence has to find $1.3 million to repay bad PEDP loans … a new study finds Rhode Island has the highest percentage of real private-sector jobs in the nation … and why it may be time for Rhode Island to take a deep breath about those Tax Foundation rankings.
10. Set your DVRs: This week on Newsmakers – Brett Smiley, candidate for Providence mayor; John Hill of the Providence Newspaper Guild and RIPR’s Ian Donnis on The Providence Journal going up for sale. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – Christine Ferguson, HealthSource RI’s executive director. Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). See you back here next Saturday morning.