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Paton appointed CEO of MediaNews Group

Associated Press

Published: Wednesday, Sept. 7 2011 8:49 p.m. MDT

DENVER — John Paton has been appointed CEO of MediaNews Group Inc., replacing William Dean Singleton, who announced in January he would step down as chief executive.

The appointment of Paton, a digitally focused media executive with his own blog, underscores MediaNews' shift toward delivering news across all platforms, not just print, as more readers get their news online from traditional media and social media sites such as Twitter and Facebook.

Paton said his digital-first strategy doesn't ignore print but allocates resources to transform traditional media into multimedia, multiplatform companies focused on local news that readers will seek out.

"The goal is to pursue quality journalism," Paton told The Associated Press. "There's room for crowdsourcing, but we need to have professional journalists, and that means we need healthy news organizations. If we're going to be healthy, we have to be digitally focused."

Singleton, also chairman of The Associated Press, will remain chairman of MediaNews and publisher of The Post and The Salt Lake Tribune, two of more than 50 newspapers owned by Denver-based MediaNews.

Paton also is chief executive officer for The Journal Register Co., another newspaper publisher now owned by lenders after a trip through bankruptcy court. The Alden Global Capital hedge fund acquired JRC earlier this year, and two Alden managing directors are on the MediaNews board.

The newly created Digital First Media, headed by Paton, will manage both MediaNews and The Journal Register Co., which has 18 newspapers in Pennsylvania, Michigan, Connecticut, Ohio, New Jersey and New York, and other publications and websites.

"Alden Global Capital is in the driver's seat here," media analyst Ken Doctor said. "Potentially, with a big line under potentially, this could result in the first truly national newspaper company of local properties."

The newspaper industry traditionally has been splintered, but there has been consolidation more recently as publishers look for efficiencies in printing, advertising sales and other costs. "The new economy favors scale and efficiency. That's the reason this deal came together," Doctor said.

Paton said it's too early to say what changes to expect at MediaNews, but Doctor predicted layoffs of some management and corporate staff.

MediaNews said in a news release the arrangement with Digital First provides immediate cost benefits and the ability to leverage the combined scale and expertise of MediaNews and Journal Register to benefit both companies.

"We said in January that MediaNews was intent on continuing its transformation from a print-oriented newspaper company to a locally focused provider of news and information across multiple platforms to profitably address the rapidly changing industry landscape," Singleton said in the release.

"At the forefront of our efforts was developing a successful digital strategy. I have known and respected John Paton for more than 20 years. With 'digital first', John has successfully implemented just such a digital strategy for Journal Register. We are delighted to tap John's experience as we accelerate further our successful transition to a digital world."

Gordon Paris, who has been MediaNews' interim president since the beginning of the year, and Michael Sileck, interim chief revenue officer, will continue in those roles throughout a transition period.

Paris will remain a director of the company and after the transition period will serve as an adviser to the company focusing on strategic transactions.

Paton insists digital revenues can pay for newspaper newsrooms. Since implementing a digital strategy in mid-2010 at JRC, where 1,000 video cameras were distributed to reporters, the digital audience has grown from 14.9 million monthly customers on all platforms to nearly 21 million customers, Paton said.

If JRC's daily newspapers continue on the trend they're on now, all 18 newsrooms will have been paid for with digital revenues by the end of the year, he said.

"They say newspaper people can't change. We're proving we can," Paton said. "We're a long way from being done, but it's a start."

MediaNews Group's parent, Affiliated Media Inc., filed for Chapter 11 bankruptcy protection in January 2010. Like other newspaper publishers, Affiliated had borrowed heavily before Internet competition and the recession ate away at advertising revenue, making it difficult to repay loans.

Affiliated emerged from bankruptcy protection two months later with its $930 million debt reduced to about $165 million. In exchange, its lenders acquired 89 percent of Affliated's common stock.

Singleton, who co-founded and became CEO of MediaNews in 1983, emerged from the reorganization with an 11 percent stake in the company.

In January, MediaNews Group said it planned to replace Singleton as its CEO so he could focus on exploring possible combinations with other publishers while his successor tries to make more money on the Internet.

MediaNews Group in August announced it was combining most of its daily newspapers in the San Francisco Bay area to save money on print editions so the company can invest in ways to bring in more revenue from the Internet and mobile devices.

Beginning Nov. 2, those dozen or so newspapers will shed their distinct identities and adopt one of two new brands, the East Bay Tribune and The Times. The Bay Area News Group, a division that operates the affected newspapers, expects to reduce a staff of 1,500 by about 8 percent, or 120. An office in Walnut Creek, Calif., will close.

Most of the cuts are expected to occur within the newsrooms and operations that print the newspapers.

The largest newspapers affected are The Oakland Tribune and the Contra Costa Times in Walnut Creek. The Oakland, Calif., newspaper will be folded into the East Bay Tribune brand along with the Alameda Times-Star, The Daily Review, The Argus in Fremont and West County Times in Richmond, Calif. The Contra Costa Times will be blended with The Valley Times, San Ramon Valley Times, Tri-Valley Herald, San Joaquin Herald and East County Times.

Most of those newspapers already had been re-classified as editions of MediaNews' largest Bay-area newspaper, the San Jose Mercury News. But the newspapers retained their own names, making that switch less noticeable to readers.

In another change announced last month, the Mercury News' brand will be stamped on the San Mateo County Times, another nearby daily owned by MediaNews.

MediaNews has been experimenting with pay walls that require readers to buy subscriptions to see some online content. Paton, not known as a fan of that structure, said he would assess how it's working before deciding next steps.

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