While hedge fund counts profits, Pioneer Press cuts newsroom... again

The Pioneer Press isn't losing money -- far from it -- but it's not making enough for the investors who are wringing it dry.

The Pioneer Press isn't losing money -- far from it -- but it's not making enough for the investors who are wringing it dry. Glen Stubbe, Star Tribune

David Montgomery joined the St. Paul Pioneer Press in December 2014, taking what he saw as a positive step in his profession. 

"I was ready to move up in my career," Montgomery says now, "and move to a bigger city." 

Montgomery had spent two and a half years reporting on politics for the Sioux Falls Argus Leader in South Dakota. He'd be on the same beat in St. Paul, but unlike his work as "essentially a lone wolf" in Sioux Falls, here, he would be a member of a team. 

That meant more time for finding stories and angles, research, interviewing, revising drafts -- even learning brand new skills. Montgomery taught himself how to do basic coding, how to make maps and graphics, how to find and compile data of interest to Minnesota readers, and present it in the most interesting and digestible way.

Montgomery also covered breaking news and developing stories at the Capitol, and other issues related to state government. He has filed 34 bylined stories since the beginning of July, including one on Wednesday.  

All that work is coming to an end, at least as far as the Pioneer Press is concerned. Earlier this month, Montgomery accepted a buyout offered by the newspaper, and this will be his last week working there.

The opportunity to accept a buyout was announced to newsroom staff earlier this month; how many editorial staffers will be cut remains to be seen. In a statement, the Pioneer Press says it expects to complete "a handful" of buyouts during September. 

If not enough people step forward to volunteer --  Montgomery is the first and only so far -- the newspaper's guild expects to see layoffs, according to Dave Orrick, the newspaper's outdoors editor and a spokesman for its labor union. 

Orrick expressed the staff's frustration with yet another round of budget cuts under its current ownership. 

"It's the same story, different fiscal year," Orrick says. "We are a profitable company, but our hedge fund owners simply want additional profits, and they don't seem to care that they come at the expense of our product -- news -- and thus, the community." 

Orrick refers there to Alden Global Capital, the investment fund parent company for Digitial First Media (DFM), which owns dozens of newspapers across the country, including the Pioneer Press. Through DFM, Alden is squeezing its publications for as much profit as it can possibly deliver its investors, with little regard for the quality of the product.

Where possible, the chain is selling off its newspapers -- three were sold in the past year and a half -- which would, at this point, be a relief to Pioneer Press staff. (Orrick and other journalists have even struck out on their own, in the hopes of recruiting a local buyer themselves.) A recent write-up by Newsonomics blogger Ken Doctor paints a grim picture of DFM's strategy of "doubling the price of news products while halving the products," which he says is "literally killing the business."

Writes Doctor: "Yes, Alden continues to squeeze 25 percent-plus [profit] margins from its beleaguered properties, but knows the window on those profits is closing."

Doctor mentions Glen Taylor, owner of the Star Tribune (and City Pages), as the type of wealthy local buyer that could step in to rescue DFM's newspapers. Taylor has said he would buy the Pioneer Press if he could, but thinks the deal would be blocked by the Department of Justice.

Orrick can't speak specifically to that profit margin estimate, but is confident the paper is not struggling to make ends meet: "As best we can tell, these cuts are simply unnecessary."

In its statement, the Pioneer Press says the newsroom cuts "will be largely offset by staffing increases elsewhere," though it did not elaborate.

"We adjust the shape of our organization on an ongoing basis," the statement continued, "to meet the ever-changing media consumption habits and advertiser demand. Moving forward, we fully expect to sustain our dominant market position in serving East Metro readers and advertisers, just as we have for over 165 years."

Digital First Media did not return a request for comment.

Montgomery, for his part, says he thinks his experience in St. Paul was not unlike what's happening at newspapers across the country; at the time he left it, the Sioux Falls Argus Leader was doing a "reorganization," with reporters forced to reapply for their jobs.

Montgomery says he's most proud of the "explanatory" projects he worked on, including a recent multi-layered look at speeding tickets, and his reporting on the state's novel "reinsurance" approach to bolstering MNSure. He intends to use the "broad skill set" he honed at the Pioneer Press at his next gig, though he's not sure when or where that will be.

"I love the Twin Cities, and I would be happy to stay here if I get a good opportunity," he says. "I'll also be exploring opportunities elsewhere in the country."