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Digital First Media previously invested heavily into digital expansion of its newspapers under former CEO John Paton – including the creation of Project Thunderdome, a high tech, national newsroom in Manhattan that could output digital content to the company's papers across 15 states, which was closed in 2014 as part of a cost-cutting initiative to save more than $100 million,
In May of 2015, Alden Global Capital ended talks with Apollo Global Management to purchase Digital First Media for a reported $400 million. Former Digital First CEO John Paton left the company after the deal floundered. Today, the company holds 67 daily newspapers and 180 non-daily publications. In Michigan, Digital First Media owns five daily newspapers, including The Detroit News, The Macomb Daily, The Morning Sun, The Oakland Press and The Royal Oak Daily Tribune. It also owns The Source in Clinton Township; The Press & Guide in Dearborn; The Voice News in New Baltimore; MI Prep Zone; Go & Do Michigan; The News Herald in Southgate; and Morning Star Publications in Traverse City.
"I haven't heard that they are actively shopping it as they were before, but there's no doubt for the right offer that Alden would sell in a heartbeat," Doctor said of Digital First Media's holdings. "It's a financial investment. What they are calculating, just as they did when they let the Apollo deal go, is that 'if we hold on for three years and cut as needed, how much can we take out of these papers for the next three years versus selling them.'"
Meanwhile, Doctor said Digital First Media is in "milking mode," or working to squeeze profits without making significant investment in its newspaper products.
"They are very much in milking mode, more so than others," he said. "On a curve, it's an affliction for the whole industry, but they have done it longer and deeper than others, and it doesn't show any sign of slowing up."
As Digital First Media and others in the industry continue to make cuts in an attempt to stay profitable, those in the industry say the quality of many newspapers, including The Oakland Press, have dwindled, which in turn hurts the value of the product.
Michigan State University journalism professor Stephen Lacy said that diminished quality at a paper also contributes to declines in circulation.
"Part of the problem is, and there's plenty of documentation on this, is that circulation is a function of the quality, and the investment in the newsroom," he said. "Over time, you cut your newsroom and your circulation. And as you reduce circulation, you're less of an advertising target. Now that print is declining as a percent of revenue, digital revenue goes up, but it's not at the pace to keep up with those losses....continued on page 5