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'Star' and 'Citizen' Trim Expenses

The dog days of summer have brought a variety of cost-cutting measures to Tucson's daily newspapers.

The Arizona Daily Star has revamped its business section to deal with expense-trimming measures, according to information obtained by the Tucson Weekly.

The Star has implemented a variety of changes to its business section, including a consolidation of the stock listings and the elimination of daily listings of all but the most widely held mutual funds. The Star has also trimmed its market report from roughly 3 1/2 pages to two pages on Saturday.

The short version is this: The business section used to be six pages Tuesday through Friday; it's now four. It was eight pages on Saturday; it's now six. Sunday and Monday are unchanged.

"The reasons for the market-report changes are twofold," according to a memo distributed by Debbie Kornmiller. "We needed to cut some expenses, so reducing the size of the business section was one way to do so. The business section was vulnerable to reduction because fewer and fewer people are getting stock prices and mutual-fund prices from newspapers. Rather, people get that information from the Internet. Reducing the pages in business also allows us to reduce the amount of time spent choosing and editing news-service stories. That contributes to our goal of increasing the time spent on local coverage."

Lee Enterprises, the company that owns the Star, has to find ways to boost its advertising revenue, which dropped 1.7 percent company-wide when compared to the same period a year ago.

"Print-only retail advertising revenue decreased 4 percent, and print-only classified revenue decreased 5.6 percent, with employment down 12.4 percent, automotive down 10.5 percent, real estate down 9.9 percent, other daily newspaper classified categories up 5.1 percent, and classified in non-daily publications up 10.8 percent," according to a June 18 release published on Lee's corporate Web site (lee.net). "National advertising revenue decreased 7.4 percent. Circulation revenue decreased 4 percent.

"Total same property operating revenue in May declined 2 percent compared with a year ago. Including the effect of acquisitions and divestitures, total operating revenue declined 2.2 percent."

The news is worse for the Star.

"At Lee's 50 percent subsidiary in Madison, Wis., advertising revenue in May decreased 6.4 percent. In Lee's 50 percent partnership in Tucson, Ariz., advertising revenue for the May statistical period decreased 10.8 percent. Madison and Tucson are reported using the equity method of accounting and are not included in same property revenue."

Regardless of the accounting methods, an 11 percent decrease is something that gets noticed. It doesn't help that Lee stock has dropped about 40 percent (from a year high of 35 to its current level around 21) since February.

Meanwhile, in a recent staff meeting, Tucson Citizen management gave employees the option of taking as much unpaid time off as they wanted during the summer months, on top of the paid vacation or sick days they had accrued.


NEWSPAPER TRADE RUMORS RUN AMOK

When the bottom line isn't looking all that good, the tornado of rumors swirls. Among those rumors is one that the Citizen and Star have discussed a change to their joint operating agreement (that merged their business operations but kept their newsrooms separate).

The rumor: The Citizen would be allowed to hit newsstands in the morning, but in a different format. Citizen editor and publisher Michael Chihak curtly denied that rumor; Star publisher John Humenik said, "(There is) no truth, to my knowledge."

However, neither responded to another rumor coming from multiple unconnected sources--that Gannett and Lee are in talks to swap properties. In the rumored deal, Gannett would purchase the Star from Lee in an exchange that involves the Des Moines Register.

If that unconfirmed rumbling has legs, it would mean Gannett could get a stranglehold on Arizona: It already owns The Arizona Republic. The consequences of such a sale to the Citizen--with subscribers approaching 20,000, down from the mid-40,000s over the last decade--could be dire.


KVOA CRUSHED IN RATINGS DESPITE HD INVESTMENT

NBC affiliate KVOA Channel 4 put in a lot of extra hours to unveil its high-definition product before the May ratings book. The result: Ratings plummeted.

KVOA took major hits in the key demographics in its 5, 6 and 10 p.m. weekday newscasts, and found itself in the unfamiliar position of bringing up the rear.

"You hear all the HD hoopla, and KVOA, in all the key demos except for morning with the Today show leadout, was No. 3, and I don't know the last time KVOA was No. 3," said KOLD Channel 13 general manager Jim Arnold, whose station led the pack again. "If you look at the charts of the trends in the recent books, we are reasonably steady."

The real story is the resurgence of KGUN Channel 9, which has been third in the market for many years.

The ABC affiliate delivered significant improvement across the board.

"When you look at how hard we work compared to everyone else, we had a series or franchise piece in every newscast," said KGUN interim general manager Diane Frisch. "Hard work, lots of focus, good news product--hard work over time pays off. The job the team and news director Lena Sadiwskyj have done is showing."

KGUN spends a good portion of its newscasts with franchise (or regular segmented) features, such as "Who's Trashing Tucson," "Fraud Fighters" and "Speedbusters." The "Nine on Your Side" community-involvement approach appears to be delivering.

Or it could have just as much to do with network lead-ins: KVOA could be hurt by the struggles of NBC (although one wonders whether the HD studio upgrade has had problems transferring in the market). Meanwhile, ABC affiliate KGUN benefited from a strong network lead-in, just as it suffered from a weak lead-in during February's book; KOLD continues to reap the benefits of its CBS affiliation.

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