Author: jeffpelline

A downturn like this — the worst in decades — is the best time to shake up a business, including in a small-town media market such as ours. 

Earlier I suggested The Union strike a deal with the Auburn Journal to milk the business along the 49 corridor, where a Home Depot, Trader Joe’s and others are springing up or going to. The venture could include cross-selling some advertising in both counties, a potential “win-win.”

The Union operates in a business “cul de sac,” and The Journal could get some incremental ad dollars. Highway 49 is more of a profitable business corridor than the scenic but isolated Hwy. 20, the path to where The Union’s sister paper, the Sierra Sun, operates.

The Journal is run by a family-owned newspaper chain called Brehm Communications of San Diego. (It prides itself on a hand-carved wooden BCI logo in corporate headquarters, among other things). Weird.

Here’s a less ambitious plan, though: The Union also could strike a cost-cutting deal with KNCO, its neighbor in the “cul de sac” we call home.

For both the newspaper and the radio station, the biggest money-maker is ads from the “mom and pops” that operate here. In the past it was a good business for both. But we’re not growing anymore, so there are fewer “spoils” to split.

An alliance between the two could be structured on either the ad or the edit side, for that matter. (Merging edit between The Union and The Journal would be more difficult because of different markets).

Here’s the background on both businesses, which dominate our media landscape:

•KNCO is suffering from its expansion into neighboring Yuba County, where the market has since tanked. Its timing was bad. KNCO’s holdings also include KUBA and STAR FM.

More than a dozen local people, including some well-heeled retirees, are investors in the station. Some of them are newsmakers too — creating a potential conflict in the news reporting.

The group includes Chairman Ed Sylvester, President Scott Robertson, chief executive Bob Breck and Secretary Gordon Beatie, all from Nevada City or Grass Valley, as the regulatory filings state. (Jim Keil used to be an investor before his Grass Valley Chevy dealership folded and he left for Mexico.)

The recent performance of Nevada County Broadcasters has been disappointing to its investors, to be sure. They are supposed to receive dividends.

•For its part, The Union is suffering from the downturn here but also the woes of family-owned chain ownership.

Swift, the Reno-based chain that owns The Union, has been cutting jobs, reducing frequencies of its papers and closing some papers throughout its chain. At the Nevada Appeal, its flagship paper, the publisher also is the editor — an inherent conflict of interest.

At the Vail Daily, once a solid monopoly market, Swift now faces competition from a new paper, The Mountaineer. It was started by the former owner of the Vail Daily, Jim Pavlich, a millionaire.

The Vail Daily’s editor just disclosed that staffing there is down to 2002 levels. The Vail area’s real estate sales plunged 67 percent in January alone.

Management changes are underway at Swift as well. Swift’s CEO was promoted to chairman, creating a new opening for a CEO, as was reported in Entrepreneur.com. Who fills that slot will help determine Swift’s future, here and at its other papers.

KNCO also is turning up the heat on The Union with a new Web site created by Spiral Studios in Nevada City. KNCO.com is selling ads too.

In addition, both The Union and KNCO are facing competition on the Web from a startup called nevadacountymall.com. So it would make sense for the newspaper and radio station to strike some sort of deal, nipping the startup competition in the bud.

The Union’s and KNCO’s control of the local media market would best be described as an “oligopoly,” but I doubt if any deal would face regulatory scrutiny in this downturn.

It also could be informal: The Union’s previous publisher, Jack Moorhead, seemed to have no problem letting KNCO in the door in the first place. He’s friends with many of the investors. For years, both companies prospered on the business side as the area’s two dominant media players.

In Silicon Valley and elsewhere, cooperative competition between companies is called “coopetition.” “Coopetition occurs when companies work together for parts of their business where they do not believe they have competitive advantage, and where they believe they can share common costs,” as Wikipedia states.

Media concentration can have a downside, however, as Ben Bagdikian (a journalism professor of mine) wrote in the “Media Monopoly.”

The biggest ongoing concern is ensuring “tough reporting on the community’s powerful — as important to its overall success as helping the community recover from very difficult times,” as the Sacremento Bee’s publisher explained in a letter on Sunday. She’s right.

In the meantime, the ranks of local bloggers is growing here, offering independent voices. This is a hobby for me, but I’ve been surprised at the traffic growth in just one month and positive feedback.

People here are voracious consumers of honest information. What bloggers need is an independent aggregation site. I like “NC Voices,” an original effort. A new site is starting, however, called nevadacountyunites.com. 

The media landscape is changing, including in our small market. It’s my belief that the more independent voices we have, the more the reader benefits.

The best Web sites around provide unique databases, and some let you do a little snooping.

The Sacramento Bee caused a furor when it launched a database that lets you find out state salaries of high-ranking officials — but also your next door neighbor.

We have some good online databases in our own backyard too. MyNevadaCounty.com, our  award-winning county government’s Web site, provides a wealth of information.

One of my favorites allows you to search for deeds, liens, fictitious business names and other recorded documents in our county from the comfort of your home PC — informative in a recession. It’s here.

For example, type “Thomas J. Hastert” under “search recorded documents,” and you can research some of the same information that investigators did when they were looking into Hastert’s business dealings.

When it comes to fictious business names, you can type “Holbrooke LLC” to order information on the limited partnership that owns the Holbrooke, now major news with a threatened closure.

If you want more information, you can order any of the documents from the clerk-recorder’s office.

This is a valuable free online database for all citizens.

The closure of some big restaurants with banquet rooms — due to the deepening recession — is making it harder for our service clubs and professional groups to find a place to hold lunch meetings.

Take the Nevada County Bar Association, for example.

The group used to hold its bi-monthly meetings at the Stonehouse Restaurant in Nevada City — until it abruptly closed.

A meeting planned for September, with a much-anticipated presentation on legal ethics, was postponed until January so another venue could be found.

The new venue: The Holbrooke Hotel in Grass Valley, which now is threatened with closure itself. Meetings also are planned in March, May, July and September.

As reported, the Grass Valley Rotary Club also meets weekly at the Holbrooke.

Let’s hope the Holbrooke can somehow remain open: The service and professional groups sure would appreciate it.

A plan “C” for the bar association could be Kane’s, where the Grass Valley Kiwanis Club now meets. This is no doubt a logistics headache for some poor souls.

(photo from holbrooke.com)

People are talking much more openly about whether Stockton will declare bankruptcy.

The state’s 13th largest city, whose theme song is “someplace special,” is the poster child for the collapse of the sub-prime lending market, with one of the nation’s highest foreclosure rates.

“Is bankruptcy the best way out for Stockton?” the Stockton Record asked in an editorial on Monday. “That is the question officials are starting to ask as the city continues to choke on a $30 million deficit caused in large part by plummeting property and sales tax revenues.”

Vallejo is the most recent city to file for bankruptcy, last summer, but other California municipalities are expected to follow suit later this year.

Orange County declared bankruptcy in 1994 after risky investments went sour, a financial debacle I wrote about for the San Francisco Chronicle. Here’s a good book on the topic: “Big Bets Gone Bad.”

This time around, the “b” word risk among municipalities is more widespread — and the result of public policy gone amuck, not high-risk investments.

“The hoped-for benefit of bankruptcy, certainly a goal for Vallejo, was to be unchained from union contracts and pension plans that were eating an ever-increasing amount of the city’s budget,” the Record said. “Stockton faces the same problem, especially with its Police and Fire departments, which account for about 70 percent of the general fund budget.”

So do a lot of other municipalities. Watch out.

(photo from stocktongov.com)

It’s fashionable to rip the Wall Street fat cats, and often justified.

But here’s a “fun fact”: “The reduction in Wall Street bonuses alone will cost New York nearly $1 billion in personal income tax revenues,” as the Associated Press reports.

In “State’s budget woes will outlast the recession,” it adds: “Fewer jobs mean less income tax. . . . Losses for high earners add up fast due to progressive tax rates — a loss of $1 million in capital gains can hurt a state treasury more than dozens of workers losing $40,000-a-year jobs.”

As I blogged earlier, “big government” in California depends on tax receipts from stock options in Silicon Valley, which are deep underwater nowadays.

All this suggests it’s going to be bad for government coffers starting in April — but also at least until next April. No doubt about it.

At the same time, as reported Friday, we’re making more demands for “shovel projects.” I guess money does grow on trees.

You might not hear this from the myriad local chambers, but Truckee and Downieville made Sunset’s list for “The West’s top 20 small towns.” Neither Grass Valley nor Nevada City made the list, however.

We can learn much from this (if we care to): Both Downieville and Truckee were cited for their focus on the *outdoors*.

I’ve said this before: We don’t focus enough on the outdoors when it comes to promoting the benefits of our two historic Gold Rush-era cities.

Truckee also was cited for being “eco-friendly.” Around here, we’re still shouting at each other about whether global warming exists or the merits/attendance of the annual bike race in Nevada City. 

I hope this gets mentioned on Tuesday, when government and civic leaders and the public meets at 9 a.m. at the Board of Realtors to discuss whether to restructure the chambers.

Is a shakeup in order? Instead of the proverbial western Nevada County “whisper campaign,” let’s speak up. “Bawk! Bawk!”

Downtown Nevada City was like a ghost town Saturday morning, but never mind that: We always shop locally, because it’s our hometown.

After eating breakfast at Pine Street Cafe ($30), my family and I walked around and visited some of the stores, including a favorite wine shop.

Instead of a big hello, I mostly got lectured on how all the news was “so negative.” While more “happy news” is needed for balance, it won’t change the reality of the worst recession in decades  — and the fallout.

More hand wringing showed up Sunday from the Sacramento Bee’s publisher Cheryl Dell: “What is our role in helping our region to be successful? We are a local business and, like all local businesses we need to help our community recover from these very difficult times.

“In our view, tough reporting on the powerful in the community is important to any community’s overall success, but should we be doing more? Do most readers understand that we can celebrate the success in the community and call people on bad behavior at the same time?” 

Yes, Cheryl, we understand. What we don’t like is messing with reality in the news pages of our newspaper — to satisfy advertisers or whomever. Just get more creative and help your ad staff sell some more ads.

Show them how they can grow market share in a downturn — Business 101.

We spent $160 at the Nevada City wine shop to replenish our wine rack for special occasions — putting some money where our mouth is and a smile on the owner’s face — at least I think so.

As we left, I told him I rely on newspapers to find out what is going on — the good, the bad and the ugly.

For pure entertainment, I told him I got a subscription to People magazine. It’s just $89 a year, less than most newspapers charge. I laughed at this one: “Jennifer Aniston chows on dog treats.”

(illustration from jworld.wordpress.com)

I blogged earlier that Dorado Chocolates in downtown Grass Valley had opened a store in Reno,  a “scrumdiliumptious” economic bright spot.

Turns out Ken Kossoudi’s store is generating attention in the Reno media and doing well despite the deep recession. The Reno store also will sell chocolate gelato, and the original Grass Valley store will follow suit. Yum.

But that’s not all. Dorado also has an online store. 

Here’s a great example of a 6-year-old homegrown business that “gets” the Web and brick-and-mortar outlets and has learned to integrate the two. (You know, Apple Computer but for chocolates!)

I wish more of our local merchants would see the benefits of  this strategy. In most cases, it compliments, not cannibalizes, a retail store.

Here’s the Linked In profile for Dorado Chocolates President  Kossoudji, a former tech salesperson. He worked at KLA-Tencor in Silicon Valley, a firm I’m familiar with from working as an editor at CNET.

Go Ken!

(photo from Ken’s Linked In link)

Just as traditional newspapers are struggling, a high-ranking Google executive is funding a venture called Patch, publishing “hyperlocal” online newspapers.

Tomorrow, the New York Times will strike back, announcing its own news sites called The Local in some of the same communities, setting the stage for fierce competition on the “chicken dinner” circuit.

The funding for Patch comes from Google’s SVP and sales chief Tim Armstrong and not Google itself, but it looks like “six degrees of separation” to me.

“We’re a community-specific news and information platform dedicated to providing comprehensive and trusted local coverage for individual towns and communities,” according to the Web site.

Some experienced journalists, as well as techies, are behind the effort. The first virtual papers are rolling out in suburban New Jersey neighborhoods, across the Hudson from Manhattan — as are The Times. But that’s just the start.

Here’s an example of the Maplewood, N.J., site from Patch. (My friend and former colleague at The Chronicle Herb Greenberg used to reside in Maplewood and commute to his job at thestreet.com, so I’m familiar with the market. It’s a good choice — more affluent demographics and weak local news).

The sleepy News-Record of Maplewood & South Orange is a 6,500 paid circ. paper that publishes on Thursdays and is owned by Worrall Community Newspapers.

The Maplewood paper has a free Web site, but it costs $6 per month to read the print version of the weekly online.

Patch is not the first such effort to create a free small-town online paper, using user-generated content. Most have failed. “Backfence” comes to mind.

But the timing is better and Patch depends on Google’s know-how, which offers cache. It also comes just as traditional newspapers are struggling and is a stark reminder of the major shakeup that lies ahead.

Here’s a writeup from a blog that I bookmark, “Silicon Alley” insider.

At least some newspapers, such as the Times, are being proactive. But challenges remain, such as how to monetize the small-town sites. Deep pockets will help too.

Nonprofits are feeling the pinch of the deepening recession.

I routinely hear stories about it here, where we have one of the largest concentrations of nonprofits among rural counties — and much duplication.

Consolidation already is underway, among the area’s nonprofit senior centers, for example.

Sierra Christian, a nonprofit school in Nevada City that was deep in the red, has closed — a reminder that boards need to step up . Foothill Theatre has cut back its schedule of plays. The Lutz Center for seniors has closed.

This will continue later this year and next.

My biggest concern: the dearth of nonprofits dedicated to helping *people*  around here, compared with ones dedicated to the environment, animals or “things.” It’s disproportional.

At a time like this, we need to help our fellow humans first and foremost.

We’re not alone in facing this problem. This morning’s Chronicle has a sobering front-page article on the situation there, titled “Bay Area Nonprofits brace for 2010 Armageddon.”  The Bay Area has the largest concentration of nonprofits in the nation.

“Unlike recessions past, this one could permanently alter the nonprofit landscape, say nonprofit CEOs, forcing possible closures and mergers as the sector restructures to survive,” according to The Chronicle. “Funding is drying up on all fronts.”

The Web is all about databases, and a good one for nonprofits is www.taxexemptworld.com. Check it out.