AP: Newspapers May Turn to Outsourcing to Save

October 20, 2008

MediaNews CEO: Outsourcing could help save money

MATT SEDENSKY Associated Press Writer

Consolidating and outsourcing news operations -- even overseas -- could help newspapers survive as their revenues continue to shrink, the head of a major U.S. newspaper company said Monday. MediaNews Group Inc. CEO Dean Singleton, who also serves as chairman of the board of The Associated Press, told the Southern Newspaper Publishers Association that his company was exploring outsourcing in nearly every aspect of their operations. "In today's world, whether your desk is down the hall or around the world, from a computer standpoint, it doesn't matter," Singleton said after his speech.

MediaNews publishes The Denver Post, The Detroit News and 52 other daily newspapers and is well known for cost-cutting efforts, including combining many operations of its papers near San Francisco. Singleton said sending copyediting and design jobs overseas may even be called for. "One thing we're exploring is having one news desk for all of our newspapers in MediaNews ... maybe even offshore," he said during the speech. Other publishers also have consolidated newsroom functions this year. Two Florida papers owned by The New York Times Co. said in August they were merging news and copy desk functions, design, layout and pagination. The McClatchy Co. papers in Raleigh and Charlotte, N.C., are sharing sports and political reporting staff. But few have sent newsroom functions overseas, limiting off-shoring mostly to ad production and other non-editorial functions, said Ken Doctor, a media analyst with Outsell Inc. Notable exceptions are Thomson Reuters, which has been using journalists in Bangalore, India, to handle some basic news such as corporate earnings reports, and a Web site called pasadenanow.com, which has five regular contributors overseas who write about Pasadena, Calif., using webcasts of council meetings and information provided by citizen volunteers. "We used to have on-the-ground reporters, but the expense was prohibitive," said James Macpherson, editor and publisher of the site. "Regretfully, we had to lay them all off." Macpherson said he saw no reason a larger publication couldn't adopt similar techniques to save costs. "You might miss the nuance of a sneer on a councilman's face but you know how he voted and what he said," he said. "That's factual and can be reported on from anywhere." In a statement, Thomson Reuters spokesman Joe Christinat said that "by reporting some of the more commoditized news from Bangalore, our reporters are freed up to add greater value to the file with more insight, analysis, interviews, exclusives and market-moving, in-depth stories." Despite this year's dismal drumbeat of layoffs and revenue drops, Singleton said newspapers still have incredible reach in the country, calling them cornerstones of democracy. But he said they must change in order to survive. "Fond memories of dead newspapers will do nothing for our communities," he said. Singleton praised electronic versions of newspapers because they eliminate printing and delivery expenses. He also said newspapers could heal their bottom lines by building up their ad sales forces and producing more niche publications like wedding magazines to attract more advertising. Singleton said no decision has been made to outsource editorial functions overseas at any MediaNews publications, though it was recommended by consultants. He said publishers were trying to consolidate editing and design domestically, whether in one place or several, and see if they could match the savings they would see by going overseas. Editors and reporters have intensely questioned newsroom outsourcing. Long-distance editors might miss locally relevant nuances or fail to fill in context based on a knowledge of the region, said Bernard Lunzer, president of The Newspaper Guild-CWA. "It may in the short run save costs. In the long run, what does it do to the quality of the product?" he said. But Singleton said Monday that local editors would always maintain final control and that no page would go to press without their approval. Singleton talked about outsourcing delivery of newspapers, relying more intensely on syndicates for non-local news, and moving circulation call centers offshore. He mentioned outsourcing printing to competitors and centralizing ad production and said that may be as cheap as going overseas. But he said most of the preproduction work for MediaNews' papers in California is being done in India, a move he said cut costs by 65 percent. "If you need to offshore it, offshore it," he said. ------ AP Business Writer Anick Jesdanun contributed to this report from New York.