Inside McClatchy’s plan to reinvent its newsrooms

If you are a reporter at one of McClatchy’s 31 papers, you will have this meeting sometime in the next year, or you may have already:

You will be asked to join one of your editors and a member of corporate’s roving “reinvention team.” There will be talk of digital best practices, but the heart of the exercise is a look at how well a collection of your recent stories performed online. Which ones were hits? Which ones bombed?

The team will advise you to spend more time on the kinds of stories digital audiences are looking for in local journalism, especially high-impact enterprise stories. And drop the dull stuff. Lots of boring stories don’t do much for the reader or the company’s bottom line.

So far it’s working, said Tim Grieve, vice president of news for McClatchy, who’s five months into a new program to pick up the pace of digital transformation.

“We run about 29,000 pieces of local digital content a month,” company-wide, Grieve said, “and 1,000 of those drive more than half the readership. That’s about one story per day per newsroom. If we could do two a day instead, we could double (that part of) the traffic.”

The first two newsrooms that completed the program and implemented it for a couple of months have shown improvement, Grieve said. Individual reporters there saw their pageviews rise, on average, by 26 percent at one and 58 percent at the other.

Four more newsrooms came aboard in May, and three immediately had a record month for traffic.

Parallel moves are in progress on the business side of McClatchy, said Craig Forman, president and CEO of the company. McClatchy is putting its foot on the gas to grow its digital marketing subsidiary, Excelerate, expanding the sales team from 40 to 100 over the course of the year.

In a shock within the close-knit news industry, longtime McClatchy CEO Pat Talamantes, was let go on Jan. 25. Forman, an experienced tech entrepreneur and former journalist, who had been on the company’s board for three years, was named in his place.

Little explanation was offered. Both Forman and board chairman Kevin McClatchy would say only that the company was on the right track but needed to pick up the pace.

Forman, who took office at about the same time as President Trump, agreed to my suggestion that his first 100 days would be a reasonable time to talk about progress (though it is now more like 140).

The new regime brought with it a fresh wave of cuts to McClatchy newsrooms and other parts of its operations. Grieve and Forman declined to say how many there have been so far or are projected for the balance of the year.

Staff cut decisions are made on a property-by-property basis rather than a company-wide mandated percentage. So, they are playing out sequentially as the reinvention team makes its way from newsroom to newsroom.

That process is going to take awhile. The team will bring the program to at least the largest 15 of the company’s 30 newsrooms this year, but the effort will spill over well into 2018, Grieve said.

Forman replied similarly when I asked how soon positive financial impact will result. He wrote in an email:

We are already seeing benefits in both top line and bottom line performance on these initiatives. But the world at large will not, as the overall level of the transformation stabilizes….We are operating this business like the long-term shareholders we are. And we expect a return on these investments.

So “picking up the pace,” at McClatchy, has a flavor of paradox. In practice, the initiatives will take a sustained period of time.

Forman provided a number of specific examples of steps he has taken already:

A news-business collaboration to jump start podcasts, which my colleagues Ben Mullin and Kristen Hare have written wrote about, has hatched several encouraging new shows from McClatchy’s Washington bureau, including “Beyond the Bubble” and “Majority Minority.” Local podcasts are beginning to roll out now. But the shows are so new, McClatchy is not yet trying to sell ads.

Borrowing a Silicon Valley format, Forman himself leads his product team in a weekly “agile scrum,” a stand up meeting to check progress on projects under development. “McClatchy has shipped more products in the past six months than in the prior 18 months,” Forman said. “This includes a new suite of iOS apps for our markets and a significant refactoring of our story pages as well as a new publishing/subscription platform. These are big releases.”

The executive ranks have been reorganized and pared. The company now has four regional publishers. Some individual properties retain a publisher; others are led by a general manager.

As the digital marketing capacity grows, McClatchy is expanding into markets where it doesn’t have a newspaper presence. In one such instance, Excelerate helped a family-owned local retailer with a big catalog business quickly strengthen its digital presence, Forman said.

Forman takes it as a marker of progress that only 25 percent of the company’s revenues now come from print advertising. Of course, that has lots to do with how far print has fallen over time and how fast those declines have been for the last year.

The newsroom makeovers appear to be the centerpiece of what the company means by picking up the pace. With reinvention’s heavy emphasis on traffic metrics, I have heard some grousing amid generally positive reactions in the trenches that this smacks of story quotas and a shift to a diet heavy on cat videos. Neither is the case, Grieve said.

Readers come to a local site for local content, he said, so generic celebrity fluff or cute videos are not much of an asset. A deep story with a strong personality element will be the biggest audience engagement winner, Grieve continued. There is some room for lighter fare that drives traffic and some for less popular but important stories. But reporters and editors are now being given permission to skip the dutiful but dull updates.

While story selection is key, stronger SEO, inviting headlines and the like are also driving growth in digital engagement, Grieve said.

The digital reinvention team numbers 10, a mix of senior editors and recent additions with specialties like social media, Grieve said. They typically meet with a group of top editors from three or four papers to outline the program, allow for two weeks of planning, then come into the individual newsrooms to work with reporters.

Most of his incremental changes are typically “under the hood” and not likely to excite investors for a while, Forman said. McClatchy shares have been on a long slide and are trading down about 5 percent since Forman took charge. The company has long been burdened by the high interest costs and paying down debt taken on when it bought Knight Ridder more than a decade ago.

That leaves little borrowing leverage for big acquisitions, and McClatchy continues the familiar drill of selling buildings and its interest in several digital joint ventures along with cutting costs by reducing the page count and news hole of the papers. So, my take is that the home-grown transformation Forman and Grieve describe is a sound strategy and also a necessity given the circumstances.

Both McClatchy’s own longtime properties like The Sacramento Bee and (Raleigh) News and Observer and its Knight Ridder acquisitions like the Miami Herald and Kansas City Star have strong journalism bloodlines. The combined Washington bureau of the merged companies remains a strength.

And if the signals are accurate, I find it heartening that a regional news company is placing its bet for the future on strong digital journalism rather than financial maneuvers.