The Scripps Center evicts its flagship paper

Midnight on December 31, a story that is more than a century old will end when E.W. Scripps closes the Cincinnati Post, the newspaper currently housed in it headquarters pictured above. If you want poignancy, read the sweet obit that Joe Strupp wrote for Editor & Publisher, but I find that moist eyes contribute to muddle-headed (not muggle!) thinking so let me put this long-expected closure into context.

The Cincy Post, and its sister paper, the Kentucky Post, are afternoon dailies. For the past 30 years the shrinkage in newspaper circulation has generally affected afternoon papers more than morning papers. Over the recent decades newspaper owners were able to persuade lawmakers to legalize the collusion between morning and afternoon newspapers. They were allowed to form Joint Operating Agreements or JOAs that allowed them to share one printing plant, ad sales staff and other production expenses. In return the deal was that the two papers kept separate editorial staffs and therefore more points of view on local issues, at least in theory. And the two papers split revenues according to whatever formula they made. In general, the morning papers became stronger as lifestyles changed, and the factory jobs that got people home in the early afternoon to read the late daily started to evaporate and, with that change, the morning papers became the stronger part of the JOAs

Over time these JOAs (list and details) have been unraveling as the strong papers cuts the weaker papers off from this artificial revenue-sharing lifeline. Three years ago Gannet told Scripps it was cutting off the Cincy Post. Scripps decided to close the paper when the agreement ends at midnight on December 31.

Sad though that might be, shutting the money-losing paper was a smart business play for Scripps, which has been a leader among newspaper chains in reinventing. In October, E-Commerce Times reported that:

“EW Scripps announced a plan to split into two separate public companies: one for national media efforts and the other for local and community brands . . . Scripps Networks Interactive, with 2,100 employees and annual combined revenue of about US$1.4 billion . . .  including HGTV, Food Network, DIY Network, the Fine Living Television Network and Great American Country . . .  Shopzilla and uSwitch . . . (and) . . .  EW Scripps, with 7,100 people and combined annual revenues of about $1.1 billion, would encompass Scripps’ 17 daily and community newspapers; 10 TV stations, the United Media character licensing and feature syndication businesses and Scripps Media Center in Washington, which includes the Scripps Howard News Service.”

It takes 7,100 people to make $1.1 billion at the old media E.W. Scripps. It takes just 2,100 people to book $1.4 billion in sales at the new media sites at Scripps Interactive. Sobering, isn’t it.

An unhappy note for a Friday, perhaps, but I thought it a necessary follow to yesterday’s blog post about the analyst who thinks newspaper stocks are undervalued.