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John Paton by Anthony Jenkins. (Anthony Jenkins/The Globe and Mail)
John Paton by Anthony Jenkins. (Anthony Jenkins/The Globe and Mail)

THE LUNCH

Charting print through choppy waters Add to ...

For John Paton, the future of journalism looks nothing like it used to.

But you can’t let the struggles of a beloved industry ruin your lunch, even if lunch is little more than a salad and a few small pieces of raw salmon washed down with a glass of water. Mr. Paton’s waist is contracting alongside the newspaper advertising market in the United States, but that’s the type of loss you can brag about whenever anyone notices that you’ve been eating less and taking longer walks.

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The topic of print advertising is awkward for many in the industry to talk about openly. Lately, it has been declining at a double-digit pace; the venerable New York Times Co., for instance, recorded a 13.3 per cent decline in newspaper advertising in the first quarter.

Mr. Paton, who got his start as a copy boy at the Toronto Sun, is now in charge of one of America’s largest newspaper groups, one with more than 75 daily newspapers in the United States and their affiliated digital properties through Digital First Media. He has also fashioned himself as something of a guru on the new world of selling news in the digital age -- a reputation he carries despite the apparent lack of financial success of some of the entities he manages, such as Journal Register Co., which last year filed for Chapter 11 bankruptcy protection for the second time in three years.

Mr. Paton is undeterred. He sees a fleeting opportunity to build a new industry on the back of the old.

“The business of newspapering has to become the business of maximizing free cash flow to feed the new, growing businesses,” he says, swatting away a steady stream of waiters who keep trying to take his salad before he’s finished. “Is anyone arguing print isn’t challenged forever and a day? Of course it is. Is anyone arguing there’s a bottom? Of course there’s not. The idea is to recognize that and start building new businesses while you have the opportunity to do so.”

Mr. Paton has become one of the most outspoken advocates of the digitization of news since being named Publisher of the Year by Editor & Publisher in 2009, insisting the old models should only continue to exist to fund the creation of new ones. He still loves newspapers, he says, but it’s an increasingly one-sided relationship.

“Look,” he says. “There’s a realization that if the largest part of your business is legacy, it needs to become something else. The question is – what does it become? And the answer to that is, ‘Not what it is today.’ And that’s why you need to build the revenue streams and cost structures to build whatever that is going to be, fully realizing you’ll need to fund all of that from the profits of your printed products.”

It’s a strategy that not everyone buys into, including, Mr. Paton says, some of his own employees. He gets the criticism, but tries to bat it down by saying the Journal Register bankruptcy filings are about getting rid of legacy costs.

“The bankruptcy has everything to do with pension issues, debt and real estate and has nothing to do with performance,” he says. “But it becomes about a bankruptcy of ideas, so you need a thick skin. They come at me because I’ve been so loud about having all the answers. I used to be really comfortable saying that. These days it’s pretty uncomfortable.”

Mr. Paton spends most of his time planning for a newspaper-free future from a downtown Manhattan newsroom he has named the Thunderdome. It bears little resemblance to the gladiatorial arena from Mad Max Beyond Thunderdome, but there is a battle being waged within its walls as he squeezes whatever money he can out of his newspapers in order to finance their eventual digital replacements.

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