October 20, 2011

Local news lessons from former Bay Area News Group revenue chief Jeff DeBalko

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Just four months after he got there, Jeff DeBalko is departing the Bay Area News Group, where he has been chief revenue officer. In a post to his personal blog he offers practical and pointed strategic advice for running a local news business…

By Amy Gahran

“I resigned from BANG. I was asked to stay but I had made my decision,” he said in an e-mail interview. “Everyone brings certain style, skills and experience to a role. Mine were simply not a good fit for where BANG’s management is today.”

Prior to his brief newspaper stint, DeBalko spent 20 years in business-to-business media. At Reed Business Information he was in charge of approximately 40 trade publications in 10 markets, as well as internet operations.

DeBalko denies that his decision to leave BANG is related to the recent non-merger merger through which a new division of the Journal Register Company (Digital First Media) is assuming management responsibilities for all papers in the MediaNews Group chain—which includes BANG. In fact, DeBalko supports this management change.

“I have been talking about many of the key elements of ‘digital first’ for many years from a revenue, content and community perspective,” said DeBalko. “[JRC CEO] John Paton and his team are on the right track.”

In an Oct. 18 post to his personal blog, 7 things I have learned about local media, DeBalko offers some tough love on the business side of local media. It’s mostly not about the numbers. Rather, his advice focuses on community connections and strategy.

Some highlights from DeBalko’s post:

On opportunity: “While many view local media through the lens of the newspaper business and its multi-year decline into revenue oblivion, I view local media through the lens of the incredible opportunity presented by the interaction of social-local-mobile media, the strong revenue growth of a $150 billion a year business, and the non-stop innovation of companies like Google, Facebook, Groupon, Foursquare and others.”

Hope is not a strategy: “You can’t hope that the print revenue decline is cyclical, not structural.  You can’t hope, that the economy will rescue you.  You can’t hope that your customers will buy digital products from you just because you have been a long time ‘trusted partner’ in print. ...In my 100 days in local media, I have yet to have someone convey what they believe this business will look like in 12, 24 or 36 months.”

On resistance to change: “The greatest strategy in the world will be crushed by a crappy culture. As a legacy media company you can talk about your new, digital focus all you want, but if you don’t transform your corporate culture first to mirror that of successful, truly digital companies, you have no chance to succeed.”

This is as much a problem in the executive suites as in the newsroom. DeBalkow specifically warns against the dangers of corporate news managers who insulate themselves too much:

“You can’t transform a company if you don’t leave your office. You shouldn’t have to introduce yourself at all-employee meetings ...How much time do you spend talking to yourselves instead of customers?”

On community ties: “Nothing speaks louder to the failure of local media than a long, slow disconnect from the communities they serve. In trying to become more efficient, they have become irrelevant to many.”

And: “This is not just an editorial issue. The business side of the house has lost touch as well. Every week there are local events in most towns, farmers markets, fairs, Oktoberfests, etc. We should be taking the opportunity to get out in the community, sponsor these events, introduce ourselves to local merchants. We do some of this but not in a strategic, comprehensive way. We need to reconnect with community nonprofits, government agencies, business groups, etc. Truly become a vital part of the community again.”

On diversity: “If in 2011, your management team is primarily made up of old white guys (and I say this as someone rapidly approaching old white guy status), I’m pretty sure you do not have the diversity that you need to compete effectively.”

A sustainable media business is not about sales. Too often, says DeBalkow, news org revenue departments “focus too much on ‘the sale’ and hitting random revenue targets and not enough focus on the quality of the products and the performance and unique value they deliver.

“You can’t build a credible, sustainable digital media business on the cheap.  You can’t do it through a series of generic, ‘me too’ white label products and ‘partnerships.’ Someone said to me the other day that one of our ‘partnerships’ where we sell another company’s advertising product was ‘a strategic objective of the company.’ If it’s a strategic objective to give away 50% of your revenue, you’re in deep trouble.”

On embracing technology. “You can’t be a great media company without being a great technology company. Period.”

Executives: Get to know your people. “Whenever I have taken over a new business, I have made it a priority to get out and meet the people who work for me at every level of the organization. I prefer to do it in a casual setting, lunch, coffee, whatever. ...After doing this for a few months [at BANG], I am blown away by the employees, many of whom have spent their entire careers and adult lives working in this business and in many cases their company. I have not met one person who didn’t understand the challenge or was paralyzed by fear of change.”

BANG soldiers on

A leaked internal memo from BANG management says the company is immediately resuming a search for a new advertising leader.

Meanwhile, on Nov. 2, BANG plans to implement a controversial “rebranding” that involves consolidating several existing brands into two new regional papers—effectively killing several longstanding newspapers, including the Oakland Tribune. (Update: On Oct. 21: the San Francisco Chronicle reported that the Oakland Tribune may not be folded into a new regional paper after all, following strong public outcry against the paper’s planned demise. No details were offered, but today a leaked memo from BANG management, distributed to staff after the Chronicle story was published, noted: “The Oakland Tribune will return to downtown.”)

It’s unknown yet how many layoff this will involve, but many BANG employees have already received legally mandated “warn” notices. Layoffs are slated to happen Nov. 1.

No official word yet on whether Digital First intends to alter this plan as it takes over management. But BANG President Mac Tully told the Chronicle that JRC/Digital First CEO John Paton “did ask us to take another look at the plan.”

Regarding this consolidation, DeBalko observed: “I’d say that any move that gets you farther from the communities you serve is a bad idea. This business will be about becoming more local and more engaged with the individual communities on the business and content side, not less so.”

What’s next for DeBalko, and thoughts on the hyperlocal news biz

So far, he has not taken another position, although he will be looking at opportunities. “I am passionate about media, technology and leading great people to do great things. That’s what I’ll be focused on. What excited me about local media is still there and I love the passion of the people and the communities. I will stay involved in some way.”

He also offered some tips for the many independent hyperlocal news startups that have been springing up around the country—which are facing challenges to establish a sustainable business model just as the newspaper business is trying to regain one.

“Local media has to be about more than just digital. There is a role for local events and in many cases print,” he said.

“I also think you need to look beyond just community centric and look at verticals by interest group and demographic. You need to look at the individual needs and interests of neighborhoods. You need to develop close ties with government and community organizations who can no longer afford many community services and may be good partners for innovative solutions.

“I believe there is a viable play for ad/content networks in local. That’s something I may take a look at.”

The News Leadership 3.0 blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

By Amy Gahran, 10/20/11 at 2:03 pm