Compiled by the Daily Herald, Arlington Heights, IL

Questions or Suggestions…Contact John Kelly (847) 427-4630 or jkelly@dailyherald.com
April 2, 2007

TOPICS TOPICS TOPICS

Zell wins bidding for Tribune

Budget Cuts Are Likely As Developer Takes Helm; Debt, ESOP Sew Up Deal

Nearly a year ago, William Stinehart, a Tribune Co. director and the lawyer for its largest shareholder, stormed out of the company'sboardroom and slammed the door, according  to two people who were there.


The company's share price was sluggish, the newspaper industry's prospects were dim, and the Chandler family, his client, wanted
action. But the company's management and its board rebuffed the family's recommendations. Mr. Stinehart began to agitate for
change, writing a public letter demanding something more than the stock buyback that had been proposed.
What he got was one of the most wrenching auctions in the history of newspapers -- a seemingly endless process that featured
tepid buyers, unhappy employees and angry investors. As the process dragged on, the landscape shifted constantly, and the entire
industry lurched into decline as fears of Internet pressure on advertising and circulation mounted. In the end, the Chandlers had to
settle for less than they had hoped to receive.
Yesterday, the Chicago Tribune, Los Angeles Times, several other newspapers and 23 television stations fell into the hands of an
unlikely newspaper baron, iconoclastic real-estate magnate Sam Zell, whose bid had come at the eleventh hour. Mr. Zell's plan
suggests that he has some degree of confidence in the beleaguered newspaper business. He has told people he sees promise in
the company's Internet assets. But the deal leaves many unanswered questions about the future of Tribune.
"It's generally not wise to sell your house when the market is going to hell in a handbasket," says Barry L. Lucas, an analyst with
Gabelli & Co., whose parent company, Gamco Investors Inc., owns shares in Tribune Co. "I certainly hope no one else is thinking of
doing what Tribune has done. It's a mess."
Complex Deal
Early yesterday, following a weekend of negotiations, the company's board accepted a revised $34-dollar-a-share proposal from Mr.
Zell to take the company private. The complex deal is structured around an employee stock-ownership plan, or ESOP. When it is
completed, most of the company's shares will be held by Tribune employees. Although he has no background in journalism, Mr. Zell
will become chairman of a media company that will be carrying a heavy debt load, which will force its new owners to face tough
questions.
The company said yesterday morning that Mr. Zell will invest $315 million in the deal in a two-step process. In the first step, Tribune
will stage a tender offer, at $34 a share, for a bit more than half of the company's shares. To fund the offer, the company will use
$250 million of the $315 million pledged by Mr. Zell, plus additional borrowed money. It will return $4.2 billion to shareholders.
If the deal is approved by regulators, a second step will follow: the ESOP will buy the rest of the shares at $34 a share and Zell will
put in $65 million, the rest of his pledge. The ESOP then will hold all of Tribune's remaining stock outstanding, and Mr. Zell will hold
a subordinated note and a warrant entitling him to acquire 40% of the common stock for a price initially set at $500 million. The deal
values the company at roughly $8.2 billion.
Mr. Zell will get a seat on the company's board and will be able to appoint one other member. If the deal is approved, he will become
chairman. The board will have five independent directors, a majority. Dennis FitzSimons, the company's current chairman and chief
executive, will remain on the board and continue as CEO. Although Mr. Zell will not control a majority of the stock, he is expected to
exert considerable influence over decision-making.
The deal will spell the end to the Chandler family's involvement in Tribune, ending a period of open warfare between the family and
the company. Yesterday, Mr. FitzSimons referred to the letter in which the Chandlers originally attacked the company's board, which
was filed with the Securities and Exchange Commission, as "the most bogus filing of all time."
Daily Clips
April 2, 2007 Page 2
A spokesman for the Chandler family trust said: "We are pleased with the outcome" of the auction process.
Tribune kept open the possibility that a rival bidder might jump in with a higher bid. The company set a relatively low "breakup fee"
of $25 million, which it would have to pay Mr. Zell if it abandoned yesterday's deal. Among those who could try to extend the auction
are Los Angeles billionaires Ron Burkle and Eli Broad, who tried to outbid Mr. Zell late in the auction.
How Mr. Zell will be received remains to be seen. He has said he doesn't intend to break up the company, but Tribune said
yesterday it will sell off the Chicago Cubs after the completion of the current baseball season. One person who has spoken to Mr.
Zell about his plans says he is likely to seek further budget cuts, a move that will likely be unpopular with staff, particularly at the Los
Angeles Times, where the editor and publisher both stepped down last year to protest budget cuts ordered by Tribune's
headquarters. (See related articles on the Cubs6 and the ESOP7.)
Billionaire entertainment executive David Geffen, who had earlier made an offer for the L.A. Times, said yesterday he was still
interested in the paper. "I hope to meet with Sam Zell sometime in the future," he said.
Mr. FitzSimons told Tribune employees yesterday in a town hall meeting at the company's headquarters that Mr. Zell "has
identified...assets that he views as undervalued, and that's his track record as a contrarian investor. He sees things, he's been
successful in identifying assets that others think are out of favor..."
The newspaper industry certainly fits into that category. Last summer, a dramatic decline in newspaper advertising revenue forced
many newspaper executives to re-evaluate their businesses. A drop-off in print ad revenue has plagued Tribune's biggest markets --
Chicago, Los Angeles and New York -- undermining the rationale for its 2000 merger with Times Mirror Co. That merger was
designed to bring newspapers and TV stations together in large markets to amplify ad revenue. The strategy has proved disastrous
for Tribune, and the merger has turned into a huge disappointment for the company and its investors.
A Quiet Offer
Mr. Zell, 65 years old, made a quiet offer for Tribune last October, when the company was having trouble scaring up bids. Privateequity
firms had been looking and walking away. Potential buyers, including Los Angeles billionaires intrigued by the L.A. Times,
only expressed interest in parts of the company, or were making lowball offers. The company was cobbling together a "self-help"
deal to recapitalize the company and to spin off its TV stations, which would have paid a dividend to the Chandlers and other
shareholders.
Mr. Zell got sidetracked on another deal. In November, he announced he would sell Equity Office Properties Trust, a public realestate
investment trust he headed. A bidding war broke out, and Blackstone Group eventually agreed to pay about $23 billion,
excluding debt. By some measures, it was the largest leveraged buyout in U.S. history. Mr. Zell, chairman of Equity Office
Properties and its largest individual shareholder, walked away with $900 million.
On Feb. 7, the day shareholders approved that deal, he discussed his interest in the Tribune. He provided no details, saying only
that he felt the business was undervalued and had prospects for recovery. Civic pride may have played a part. Mr. Zell is a longtime
Chicagoan whose office features a bronze cast of Michael Jordan's hands. He is a part owner of the Chicago White Sox, one reason
why Tribune is selling the crosstown Cubs. (Mr. Zell wouldn't be permitted to have stakes in both).
In some ways, Mr. Zell is cut from different cloth than the buttoned-down culture of Tribune, which is closely aligned with the
Chicago establishment. He prefers blue jeans to suits and is a longtime motorcycle rider. The son of a Jewish grain trader who
escaped Poland as the Nazis were preparing to invade, Mr. Zell broke into the real-estate business investing in apartments with his
fraternity brother from the University of Michigan. He has called himself the Grave Dancer, in reference to his affinity for buying
distressed properties on the cheap. Over the years, he has also invested in a railroad-car company, a cruise line, a bicycle
manufacturer and a fertilizer company, among others.
Many of his deals have been successful, but he has had his share of missteps. He was unable to turn around the Schwinn Bicycle
Co. in the mid-1990s, and in 2001, American Classic Voyages Co. sought Chapter 11 bankruptcy protection in the wake of a deep
dip in tourism after the Sept. 11 terrorist attacks.
Equity Office Properties, the enormous real-estate company he assembled and ran, suffered from some operational problems.
Although it dwarfed other publicly traded office companies in scale, it often lagged behind them in performance, with one analyst
calling it a "perennial disappointment."
Deteriorating Conditions
After the Equity Office sale was complete, Mr. Zell turned back to Tribune. Conditions in the newspaper industry were deteriorating
fast, and the auction wasn't going well. The company's revenue numbers came in lower than anticipated, forcing management to
downgrade its internal estimates for the full year.
Daily Clips
April 2, 2007 Page 3
Messrs. Broad and Burkle already had submitted a bid valued at $34 a share. After the company's internal revenue estimates were
lowered, an adviser to the two investors informed a representative of the Tribune's board that they were dropping the value of their
proposal to $27 a share. If the company was interested in that new offer, the adviser said, the Broad-Burkle team would put it in
writing. That never happened, this person said.
Mr. Zell came in with his own offer.
At that time, the Tribune's board was working on a restructuring it could do on its own: It would borrow money and pay shareholders
a big dividend. Then a company-related charity, the McCormick Tribune Foundation, which owns roughly 14% of Tribune, would buy
out roughly half of the Chandler family's stake, and the three Chandler board members -- Mr. Stinehart, Jeffrey Chandler and Roger
Goodan -- would step down, according to a person familiar with the matter. "The idea was to have peace in the valley," says one
person familiar with the negotiations.
But the economics of that idea were problematic. In early March, the company began re-evaluating that plan. The declining
performance of some of Tribune's properties made the special committee overseeing the auction uncomfortable with the proposed
debt load, according to people familiar with the matter. The plan's proposed dividend had been shaved from more than $20 a share
to roughly $18, these people say.
The company's management and the special committee's advisers were uncomfortable with the level of debt in Mr. Zell's proposal
as well. By March 9, negotiations with Mr. Zell were at a standstill, according to one person familiar with the talks.
Mr. Zell met Mr. FitzSimons for breakfast on March 13 to discuss his proposal, according to people familiar with the matter. Days
earlier, Mr. FitzSimons had met with publishers from some of Tribune's newspapers, who expressed concerns about the trajectory of
the business.
After the breakfast, Mr. FitzSimons and the special committee's advisers continued pushing hard for a self-help deal. But later that
week, on March 15, William Osborne, Tribune's lead independent director, called Mr. Zell to tell him that he wanted to get a deal
with him back on track, according to a person familiar with the call.
Mr. Zell called him back the following day and said: "We aren't going to do anything until you tell us it is worth our time," according to
a person familiar with his thinking. Mr. Osborne assured him the company was seriously considering his offer.
The two sides continued talking. The team of advisers included Merrill Lynch & Co. and Citigroup Inc. for Tribune; Morgan Stanley
for the special committee; Duff & Phelps for the ESOP trustee, and J.P. Morgan Chase & Co. for Mr. Zell.
By March 21, Tribune presented the outlines of Mr. Zell's proposal to ratings agencies, which eventually said they would grant a
double-B-minus rating to the company. That gave the company the push it needed to move forward with Mr. Zell, who had by this
point raised the value of his offer to above $33 a share.
At the last minute, Messrs. Burkle and Broad resurfaced, complaining that they hadn't been given adequate information to make a
sufficient bid. They said they would be happy to make an offer for Tribune at $34 a share, but needed more information.
A weekend of fevered negotiations followed. Mr. Zell, working from his weekend home in Malibu, agreed to raise the equity in his
offer to $315 million, from $225 million, which allowed him to match the Broad-Burkle offer.
The full board of directors, including three representatives from the Chandler family and Mr. FitzSimons, convened via conference
call on Sunday night, at 10:30 Chicago time, to discuss the deal. The board approved it shortly before 11 p.m.
Tribune buyout leaves LA Times wondering what's next
LOS ANGELES (AP) - The fate of the Los Angeles Times remained uncertain after Tribune Co ., its corporate parent, announced an
$8.2 billion (euro6.13 billion) deal with Chicago real estate mogul Sam Zell to take the company private.
The deal scuttled a competing bid by Los Angeles moguls Eli Broad and Ron Burkle designed in part to return the acclaimed paper
to local control.
Tribune's ownership of the Times has been rocky. Disputes between the Chicago-based corporation and leaders at the Times have
led to the dismissal of two publishers and two editors.
Times staff members have been bracing for the possibility of further cuts as Tribune seeks to improve profits.
Employees were somewhat relieved that the six-month bidding process had ended but remained unsure about what to expect in the
months ahead.
Daily Clips
April 2, 2007 Page 4
"There is a sense of relief. Finally there is some resolution," Times reporter Mark Z. Barabak said. "Whether it proves to be good or
bad we will not know for some time."
The complicated deal would give Zell 40 percent ownership of Tribune Co., with the rest owned under an employee stock plan.
If the deal wins regulatory approval and is completed, Tribune would be saddled with $13.4 billion (euro10.03 billion) in debt,
according to Bear Stearns analyst Alexia Quadrani. The company has about $5 billion (euro3.74 billion) now.
Tribune Chief Executive Dennis FitzSimons pointed out that taking the company private will remove pressure to satisfy Wall Street
expectations.
"As a private company, operating outside the glare of the public markets, we will be better able to focus on long-term growth as we
transform our publishing and broadcasting businesses," FitzSimons wrote in a message to Times employees.
Current Times publisher David Hiller tried to reassure employees that journalistic quality would remain a priority.
"Our mission is the same today as it was yesterday - continue to aggressively reinvent our organization as the indispensable,
dynamic and round-the-clock destination for differentiated news and information for Southern Californians, wherever, however, and
whenever they need it," he told Times employees in a separate message.
The bidders expressed different reasons for pursuing the media giant.
Zell has said he views Tribune as an investment and has not discussed its journalistic endeavors.
"There's no track record as far as I can see as what to think of the new owner in terms of this outpost of the empire," said Marty
Kaplan, associate dean of the Annenberg School for Communication at the University of Southern California.
A former Times worker said more layoffs could take a significant toll.
"If they unleash a big layoff or buyout package, they will trigger a talent exodus beyond their control and that's something to worry
about," said former Times investigative editor Vernon Loeb, who is now metro editor at the Philadelphia Inquirer.
"Wouldn't it be great if Sam Zell says, 'I didn't buy these newspapers to shred them?"' Loeb said.
Broad has said he views newspapers as a civic trust, and Burkle has tried twice before to buy newspaper chains.
Neither Broad nor Burkle offered any comments on the deal or whether they might increase their bid or make a play only for the
Times.
But FitzSimons said the company was not looking at selling any assets beyond the announced sale of the Chicago Cubs baseball
team and Tribune's 25 percent interest in Comcast SportsNetChicago.
"We don't anticipate any other newspaper sales," FitzSimons told The Associated Press. "This is a whole company transaction."
Goodby Scoops Up Sprint's $1.2 Billion Business
Mobile Giant Turns to San Francisco Shop to 'Power Up' Sales, Stock
SAN FRANCISCO (AdAge.com) -- Sprint Nextel has named Goodby, Silverstein & Partners, San Francisco, as its new advertising
agency as the mobile giant looks to reinvigorate subscriber sales and its slumbering stock.
The nation's third-largest mobile provider spent $1.2 billion in measured media in 2006, according to TNS Media Intelligence.
However, in January when the review was announced, a Sprint spokeswoman indicated the amount was likely to drop.
The nation's third-largest mobile provider spent $1.2 billion in measured media in 2006, according to TNS Media Intelligence.
However, in January when the review was announced, a Sprint spokeswoman indicated the amount was likely to drop
"Goodby's sterling reputation and creative talents are second to none and together we will deliver a more integrated and strategic
brand execution," Mark Schweitzer, Sprint's chief marketing officer, said in a statement. Sprint also liked Goodby's "combination of
strategic strength, breakthrough creative execution and outstanding new media integration."
A big spender
The nation's third-largest mobile provider spent $1.2 billion in measured media in 2006, according to TNS Media Intelligence.
However, in January when the review was announced, a Sprint spokeswoman indicated the amount was likely to drop.
Daily Clips
April 2, 2007 Page 5
Sprint has been putting a fair amount of its marketing dollars behind sports sponsorships and currently is in the midst of two highprofile,
long-term deals, one for five years and $600 million with the National Football League sponsorship and a 10-year, $700
million Nascar pact.
In December, Sprint shuffled its marketing department, naming Bill Morgan as senior VP-brand advertising, overseeing brand
management, advertising and media strategy and reporting to Mr. Schweitzer. Mr. Morgan, who was one of the leaders of the
review, worked with Goodby when he was at SBC. Also hired to fortify marketing was Matt Carter, senior VP-customer retention.
Powered out
Sprint, at the time of its merger with Nextel, retained the agencies on the separate accounts, Publicis & Hal Riney, San Francisco,
which handled sprint, and TBWA/Chiat/Day, New York. However, it re-ordered the two agencies' duties, giving Riney the businessto-
business assignment, and placing consumer advertising with TBWA. The merged brand launched with the tagline "Yes, you can."
Last fall, TBWA devised the current Sprint tagline, "Power up," and introduced "Sex in the City" actor Ron Livingston as spokesman.
Riney and TBWA dropped out of the review before it narrowed to three finalists. TBWA is the agency for Apple, which is launching a
mobile device with AT&T. The third agency finalist in the review, Young & Rubicam, New York, was eliminated earlier this week.
Goodby pips Ogilvy
In the end, both Goodby and Ogilvy had extensive telecom experience with previous incarnations of AT&T Wireless. In the
convoluted history of telecom, AT&T Wireless was folded into Cingular Wireless. SBC the bought AT&T and took the AT&T name,
then AT&T acquired BellSouth, which shared ownership of Cingular Wireless with AT&T. Cingular Wireless was then rebranded
AT&T Mobility.
Ogilvy, AT&T's longtime agency, was in part responsible for the "raising the bar" concept that BBDO melded into Cingular
advertising. Some of that branding has been used to rebrand Cingular to the AT&T name. Goodby, meanwhile, at one point stole
some of the AT&T work away from Ogivly and developed a series of emotional ads around the iconic "Reach out and touch
someone" line.
The agency hire comes at a time when the long period of growth for carriers is coming to an end. The U.S. cellphone market is
reaching a saturation point, according to several studies. With some 230 million subscribers nationwide, about two thirds of
Americans likely to acquire a phone have one.
Lack of differentiation
The carriers also are struggling to differentiate their offerings. Verizon Wireless led the charge with its reliability claim as illustrated
by its "test man" advertising. Cingular, now AT&T, joined in with its claim of "fewest dropped calls." Even T-Mobile is making a
similar claim in certain markets where its record is strong.
As a brand, too, Sprint has been taking a hit. Not only has its subscriber growth stalled and its share price been stuck in the
doldrums, but Millward Brown Optimor has branded Sprint a "fading star," that is a brand lacking forward momentum. "They
swallowed Nextel. Not well. They never had a plan," said one executive who worked on the brand. Ironically, the executive said, the
brand never really got powered up.
Wet Seal to Expand Store Count
Foothill, Calif. - April 2 - Wet Seal said on its fourth-quarter conference call that it plans to open 68 to 72 stores this year, with five
under the Arden B banner and the rest in its namesake format.
“There is potential for 600-plus stores in Wet Seal and at least 250 stores in the Arden B Brand,” said John Luttrell, EVP and CFO.
“We’re not married to a number, but plan to grow the store count 15% annually.”
For the 14-week fourth quarter, net sales were $166.4 million, compared with net sales of $141.4 million for the 13-week fourth
quarter of the previous year. Comp-store sales rose 3.1%. The net loss for the fourth quarter was $5.7 million, compared with a net
loss of $2.9 million in the prior-year fourth quarter.
For the 53-week fiscal year, Wet Seal posted net sales of $564.3 million, compared with net sales of $500.8 million for the 52-week
previous year. Comp-store sales rose 6.1%. For the year, the chain reported a net loss of $12.8 million, compared with a net loss of
$52.7 million the previous year.
As of Feb. 3, Wet Seal operated 430 stores, consisting of 338 Wet Seal stores and 92 Arden B stores.
LensCrafters To Break National Branding, Marketing Effort
Daily Clips
April 2, 2007 Page 6
LENSCRAFTERS, A DIVISION OF LUXOTTICA, Milan, will break a new national branding and marketing effort this week via DDB,
Chicago that hopes to awaken consumers to the possibility of optical glasses as fashion accessories, like shoes, lipstick, handbags
and even cell phones.
The effort, using the tag-line "Open Your Eyes," includes two TV spots running in rotation and a series of print ads running in stores
and 30 premium fashion, lifestyle, cultural and entertainment magazines for both men and women. It will also involve direct-mail
catalogs and postcards, newspaper inserts, in-store graphics, public relations, online search ads and content on Lenscrafters.com.
Print ads show people wearing their favorite clothes, juxtaposed with the glasses they could be wearing, and a question that
suggests they aren't quite finished donning "the look." One shows a guy stylin' in his favorite shirt. Below that is a photo of a pair of
glasses he could be wearing. "Your lucky shirt turns you into the guy who just can't lose ... do your glasses?" Another shows a
woman in a black dress heading to a party, also with an appropriate pair of glasses in a separate photo, with the text, "That dress
makes you feel ten years younger ... do your glasses?"
The TV ads show different positive moments, and suggest there's a right style of glasses for each.
The Mason, Ohio-based company began a store redesign in 2005 to move LensCrafters up-market and toward an image of the
brand as a fashion purveyor, not just an eyeglass retailer. The company has also moved away from messages touting deals and
has been running salesperson training programs to focus consumers on finding the right style rather than the right price.
As part of its effort, the company has also redesigned its Web site this year, adding customizing tools for consumers, per the
company. One of the features on the new site, for instance, is a face-shape selector where one can upload one's photo then get
recommendations for frames.
Seth McLaughlin, senior vice president/marketing for Luxottica's North American division, says the effort is part of a move to
reposition not only the LensCrafter brand but eyeglasses--which, by and large, are still seen as a necessary evil among many
wearers.
"The key insight we learned and we are bringing to ads is that consumers are clearly underestimating the power of the right pair of
glasses," he says. "When we talk to eyeglass wearers, they accept the need for eyeglasses, but they haven't realized they can have
fun with eyewear, as they do with other accessories--from cell phones to shoes--things that make you feel great when you have the
right one. It's the first thing people notice about you; so this is about helping people think differently."
He says the goal is to get consumers to think of optical glasses as they do about sunglasses. "If you think about the sunglasses
category, they are well-known for designer brands; we are evolving to that in the optical category, where people are excited about
their optical glasses, and where they have multiple pairs of each."
McLaughlin says that while LensCrafter is the largest retailer in the segment--with 900 stores in the U.S. and Canada--the market is
highly competitive, because about half of all eyeglasses are purchased at independents, of which there are about 25,000. "But most
eyeglass advertising tends to be focused on a price message, so this really has a chance to stand out," he says.
Agency Predicts Internet Will Overtake Radio Ad Spending In '08, A Year Earlier Than Expected
IN A MAJOR REVISION TO its global ad spending outlook, ZenithOptimedia Group now predicts the Internet will overtake radio as
the world's fourth biggest ad medium in 2008, a year earlier than originally forecasted. The report, which was released early this
morning, is part of the agency's regular quarterly tracking studies on the advertising economy, and its latest iteration predicts the
Internet will grow six times faster than traditional media through 2009 and will increase its share of the global advertising
marketplace from 5.8% in 2006 to 8.7% in 2009. "ZenithOptimedia predicts that Internet ad spend will grow 28.2% in 2007, while the
rest of the market grows 3.7%," reads the agency's report. "We now expect the Internet to overtake radio in 2008, a year earlier than
in our last forecast. We forecast the internet to account for nearly 9% of global ad spend by 2009, and its share should reach double
digits early next decade."
The report notes that the Internet already garners more than a 10% share of ad spending in three markets - Norway, Sweden and
the U.K. - and by 2009 that margin is expected to expand to 11 major markets, including the U.S., Australia, Canada, Denmark,
Israel, Japan, Norway, South Korea, Sweden, Taiwan, the U.K.
After online, cinema and outdoor media are the fastest growing advertising media, and are projected to outpace the overall
advertising economy through 2009.
In its last report issued early this year, ZenithOptimedia signaled concerns that TV was poised to enter its first ever period of
protracted ad market share loss, but in today's report, the agency notes that "demand has picked up" for TV advertising inventory
worldwide, and now expects "television's share of global ad expenditure to be just 0.2 percentage points lower in 2009 than it was in
2005."
Daily Clips
April 2, 2007 Page 7
The agency meanwhile downgraded its outlook for newspapers and magazine publishers due to advertisers shifting budgets from
print to online media. That trend is expected to be most pronounced in the U.S., where ZenithOptimedia now predicts "no growth" in
U.S. newspaper ad spending, and "less growth from magazines than we forecast in December."
Online Advertised Job Vacancies Up Over the Year, The Conference Board Reports Today
- Online advertised vacancies up a healthy 18 percent (March '06 - March '07)
- Over 394,800 ads posted for management occupations in March
NEW YORK, April 2 /PRNewswire/ -- Total online job ads were 3,754,400 in March, a dip of 69,800 or 2 percent from February,
according to The Conference Board Help-Wanted OnLine Data Series(TM) released today, reflecting the shorter reference period of
mid-February to mid-March, when there were three fewer days than in the previous month. There were 2.5 advertised vacancies
online for every 100 persons in the labor force in March. Over the year March '06 - March '07, online advertised vacancies increased
18 percent for the nation as a whole.
"All in all, the labor market is holding remarkably steady," said Gad Levanon, Economist at The Conference Board. "The March dip
in advertised vacancies is entirely due to fewer days in the February-March reference period." Growth in the number of online job
ads over the year continues to be in the double digits. "I would expect that the federal employment numbers scheduled for release
later this week will show the same reasonable, but not spectacular, gains we've seen over the last few months," Levanon indicated.
THE NATIONAL PICTURE
The 3,754,400 unduplicated online advertised vacancies in March include 2,492,300 new ads that did not appear in February, as
well as reposted ads from the previous months. During March, total ads decreased 2 percent and new ads were down 3 percent
from the previous month. Over the year (March'06 - March'07) total ads and new ads rose 18 percent and 24 percent, respectively.
Monthly percent change declines were reflective of a shorter reference period with three fewer days than the previous month. The
March figures reported in the Help-Wanted OnLine Data Series(TM) reflect the sum of the number of unduplicated online job ads for
each day from mid-February to mid- March. This new series, which includes data from April 2005, does not have sufficient history to
allow for seasonally adjusted monthly data.
The fastest year-over-year growth was in the mid-section of the country with the West South Central and West North Central regions
up 33 percent and 31 percent, respectively. Across the nation, states with the largest over- the-year gains in advertised vacancies
were Maine (+66 percent), Arkansas (+57 percent), North Dakota (+49 percent), and Missouri (+39 percent).
Metropolitan areas with the fastest over-the-year growth were heavily concentrated in areas where labor markets were disrupted by
the 2005 Gulf Coast hurricanes - Austin (+63 percent) and Houston (+54 percent).
Offliners Not Interested in Subscribing
According to Parks Associates' National Technology Scan, twenty-nine percent of all U.S. households (31 million homes) do not
have Internet access and do not intend to subscribe to an Internet service over the next 12 months,. This project found the main
professed cause for non-subscribers is not economic but a low perceived value of the Internet. Forty-four percent of these
households say they are not interested in anything on the Internet, and just 22% say they cannot afford a computer or the cost of
Internet service.
Reason For Not Subscribing to Internet Service (Q1/07 US Households without Web access and no intention of subscribing)
Not interested in anything on the Internet 44%
Not sure how to use the Internet 17
Have Internet access at work 14
Can't afford computer 14
Can't afford service 8
Not available for my home 3
Source: National Technology Scan, 2007
The report says that in 2006, broadband penetration increased from 42% to 52%, with roughly one-half of new subscribers being
converted dial-up users and the other half households that previously had no access.
Internet Access in the US (Q1, 2007)
Daily Clips
April 2, 2007 Page 8
Broadband 52%
Dial-Up (intend to upgrade) 4
Dial-Up 17
No access (intend to subscribe) 2
No access (do not intend to subscribe) 29
Source: National Technology Scan, 2007
Omni Hotels and Starbucks Deliver Exclusive Berry-Scented USA TODAY; Unique Stickers
Stimulate the Senses of the Luxury Hotel Company's Guests
IRVING, Texas, April 2 /PRNewswire/ -- Beginning today, Omni Hotels' guests will wake up to the aroma of fresh berries along with
their daily issue of USA TODAY for the next six months. As part of Omni's innovative sensory activation mission, the luxury hotel
brand has forged partnerships with Starbucks and the nation's top-selling newspaper to stimulate the sniffer by attaching a special
berry-scented sticker to each issue.
Starbucks, a member of Omni's industry-first Sensory Advisory Board, joined with the luxury hotel brand to develop the sticker as a
nod to the scratch-and-sniff stickers that many of its guests remember from childhood. The sticker is exclusive to Omni Hotels and is
the first and only scented sticker to accompany an issue of USA TODAY. The top layer of the two-ply sticker reads "Start your day
with a freshly brewed cup of Starbucks coffee and..." Guests can pull back the first layer to activate the berry scent and reveal the
end of the message "...pair it with a fresh muffin. Available at Omni Hotels." The sticker distribution will run from April 2 to
September 28, 2007.
"This fun, unique sticker is a great way to greet our guests each morning," said Caryn Kboudi, vice president of corporate
communications for Omni Hotels. "We are literally adding to a memorable experience for our guests along with USA TODAY and
Starbucks."
Starbucks is part of Omni Hotels' 10-member Sensory Advisory Board that provides non-hospitality expertise from brands whose
success is closely linked to the senses. Omni created the board to help shape and create sensory initiatives developed to enhance
the hotel experience for guests. Careful consideration was given to ensure representation for each of the five senses. The board
convenes several times a year to weigh in on everything from guestroom and bath enhancements to lighting, music and food.
Omni Hotels' continues to expand its Morsel's cafes, which offer fresh- brewed Starbucks coffee and specialty drinks, delicious
pastries, cookies and other snacks. The coffee shops are located in approximately 15 hotels and resorts across North America and
provide guests the opportunity to purchase coffee and snacks while on-the-go or to enjoy in a casual setting
Sun-Times rolls out new look
Troubled tabloid hopes redesign will boost single sales, slow financial slide
The Chicago Sun-Times hopes a new look and some long-deferred market research can help revive its flagging finances.
The struggling tabloid Wednesday will introduce major changes that include two-page spreads covering reader-friendly topics like
local transportation, shopping and neighborhoods and an e-mailed, printable afternoon edition aimed at commuters.
Sun-Times Media Group Inc., the paper's owner, plans to support the new look with a citywide multimedia marketing campaign.
The painful contraction affecting newspapers across the country has hit the Sun-Times, Chicago's No. 2 newspaper, especially
hard. While the Chicago Tribune revenue fell 1.3% to $862.7 million last year, Sun-Times Media's revenue dropped 8.6% to $418.7
million. (The company, which also owns about 100 suburban newspapers, does not break out Sun-Times revenue.) Officials at
Tribune Co. have said they're gaining share in the Chicago ad marketplace.
To halt its slide, Sun-Times Media hopes to shore up newsstand sales by convincing non-subscribers who now pick up a couple of
copies a week to purchase three or four.
Single-copy sales are the Sun-Times' sweet spot, accounting for 58% of paid circulation, its latest newspaper audit shows. Compare
that with the Tribune, where 84% of buyers are subscribers. But the Sun-Times' single-copy dominance has been waning since
Tribune Co. began giving away its RedEye tabloid. (Because it's under censure for a past scandal, the Sun-Times' circulation
statements are two years out of date.)
Still, the Sun-Times' connection to the urban core became clear during recent focus group meetings in which its executives listened
behind two-way mirrors as hundreds of readers and non-readers talked about the paper. It was the company's first use of such
groups in recent memory.
Daily Clips
April 2, 2007 Page 9
"Advertisers and consumers were telling us they wanted more local news and information," says Willie Wilkov, Sun-Times Media's
director of promotions and branding.
As a result, the paper's future offerings will include "Chicagopedia," a twice-a-week feature explaining the Chicago dialect; "24/7," a
kind of citywide police blotter, and more features about high school sports teams and players, Mr. Wilkov says. Also, "The Fixer," a
column that helps consumers resolve complaints, will get longer.
For a fee, readers also will be able to download an exact replica of the paper from the Sun-Times' Web site each morning, Mr.
Wilkov says.
Whether the new features will help the Sun-Times win back advertising remains to be seen.
"The Tribune has in the past offered a more diversified editorial mix" than the Sun-Times, says Maggie Knoll, senior partner and
print director at MindShare Chicago, a media planning firm.
Op-ed page ads signal another change for The Sacramento Bee
It's a small thing, really, and not all that successful yet, either.
But carving out space for an ad each Monday on the op-ed page is another sign of ongoing change and reassessment as The Bee
looks for new footholds amid shifting economic terrain.
The paper certainly has lots of company as it attempts to navigate a fragmented landscape that is shaking the foundation of
newspapers and mainstream media companies everywhere in America.
Pushed by drops in advertising revenue and declines in circulation, The Bee is cutting costs on the print side while at the same time
expanding its presence on the Web, where readers and advertisers are increasingly headed.
The overall situation takes on a schizophrenic quality at times, sometimes on the same day.
Last week, for example, the paper in a cost-cutting move announced it was dropping a long-running syndicated auto section feature
called Auto Album that focused on short stories and illustrations of old cars and trucks. Nearly 80 readers called to complain.
The same day, the paper's corporate parent — The McClatchy Co. — announced a potentially far-reaching agreement with Internet
giant Yahoo Inc. to showcase foreign news covered by McClatchy reporters, thereby adding a new audience of several million
readers and new revenue. The specifics about the deal's dollars and cents, though, were kept secret.
This is where the decision to create advertising space on the op-ed page comes into play, viewed as a small part of the larger
picture of changes described above.
David Holwerk, editor of the editorial pages, says he's been an advocate of selling advertising on the page, as long as it's public
affairs advertising.
The thinking goes that the Sacramento market is ripe for such advertising as the seat of the state capital and the focus of legions of
lobbyists and special-interest groups vying for favor and getting their message out to the public.
He says the New York Times and the Wall Street Journal sell similar advertising on their op-ed pages.
"It's a natural for this paper in this market," Holwerk says. Yet it wasn't until the paper was approached by a buyer several weeks
ago that The Bee made the change.
The paper designated the bottom quarter of the page, eliminating several letters to the editor.
The parameters are that the buyer has to be an advocacy group; Holwerk knows what the ad is about and reviews it prior to
publication. The advertisement also must be approved by the paper's head of advertising, Steve Bernard, and the publisher, Janis
Heaphy.
Holwerk says he will be vigilant for potential pitfalls such as conflicts of interest with the newspaper.
So far, interest from buyers has been weak. Only one ad has been sold, to a group advocating better access to public higher
education. All the others have been house ads to promote the paper's new Capitol Alert, a paid Web site of California politics and
state government.
Daily Clips
April 2, 2007 Page 10
"If there's not any real interest in it," says Holwerk, "there's no point in maintaining the (advertising) space."
The pressure on papers to generate revenue by selling advertising on pages that were previously off-limits continues industrywide.
The Washington Post announced last week that it was selling advertising across the bottom of its Sports section.
The first ads were sold to Comcast SportsNet. Several other large papers are also selling ads on the covers of their daily news
sections, including in some cases the front page.
Philly Papers to Sell Page One Ads
The Philadelphia Inquirer is the latest daily paper to offer advertising space on the front page, the paper said in a statement today.
"The advertisements will run on the bottom of the front page in the right-hand corner Monday through Sunday beginning on April
15th and will reach almost one million daily readers and 1.8 million Sunday readers," the release stated. "The Inquirer is providing
an opportunity for its advertisers to make a strong impression and reach a broader audience than ever before."
The first Page One advertiser will be the University of Pennsylvania Health System, with ads scheduled to run every Sunday for a
year, the release said.
"Our front page ads are the most sought-after positions in the newspaper," Philadelphia Inquirer Publisher Brian Tierney said in a
statement. "We expect the front page to immediately become the most coveted spot in all local advertising."
"Front-page advertising is just one of several advertising 'firsts' since the new ownership group took over the newspapers in June
2006," the statement said. "Additional innovations have included the first newspaper to partner with Monster.com to offer recruitment
advertising, the launch of MediaLab, a consulting service for advertisers to learn how to better utilize the newspaper medium and
the quick-read news summaries Inquirer Express and Daily News at a Glance."
WHO OWNS WHAT
The 20 largest daily newspapers, ranked by daily circulation, for the six-month period ending Sept. 30, 2006.
Newspaper Owner
1. USA Today Gannett Co.
2. The Wall Street Journal Dow Jones & Co.
3. The New York Times New York Times Co.
4. Los Angeles Times Tribune Co.
5. New York Post News Corp.
6. New York Daily News Daily News LP
7. The Washington Post Washington Post Co.
8. Chicago Tribune Tribune Co.
9. Houston Chronicle Hearst Corp.
10. Newsday (Long Island, N.Y.) Tribune Co.
11. Arizona Republic (Phoenix) Gannett Co.
12. The Boston Globe New York Times Co.
13. Newark Star-Ledger Advance Publications
14. San Francisco Chronicle Hearst Corp.
15. Minneapolis Star Tribune Avista Capital Partners
16. Atlanta Journal-Constitution Cox Enterprises
17. Plain Dealer (Cleveland) Advance Publications
18. Philadelphia Inquirer Philadelphia Media Holdings
19. Detroit News/Free Press Gannett Co.
20. Portland Oregonian Advance Publications
Source: Audit Bureau of Circulations