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September 22, 2009

Host: Ted Simons

Newspaper Bailout

  |   Video
  • ASU Journalism professor, Tim McGuire shares his thoughts on proposed legislation to bail-out newspapers that are struggling in the current economy.
  • Tim McGuire - Professor,Walter Cronkite School of Journalism and Mass Communication, Arizona State University
Category: Business/Economy

View Transcript
Ted Simons: A bill’s been introduced in the Senate aimed at helping newspapers survive. The bill would allow newspapers to reorganize as educational nonprofit. They would get tax breaks, but be prohibited from making political endorsements. Here now to share his views on this type of bailout is professor Tim McGuire, from ASU’s Cronkite school of Mass Communication and Journalism. Before we get to that particular idea, the President even showing concern on the help of newspapers. A good thing?

Tim McGuire: Yeah, I think it is. What he was really talking about is the quality of the debate. He's worried that the current Web environment is making the debate a lot harder than it has to be.

Ted Simons: He mentioned concerns that if papers close and leave journalism in the hands of amateur bloggers, he worries about journalism ethics and these sorts of things. A valid concern?

Tim McGuire: Absolutely. I know there are a lot of people who think that much evil is rooted in newspapers. But the fact is, newspapers have been where we have relied for the last 50 years on all the important news breaks, the important investigative stories, the perspective. Newspapers have been a terrifically important part of the country for a long time.

Ted Simons: When you mentioned the debate, it sounds to me if it's all blogs and opinions, if the fact-checking takes a backseat to the columnist type of writing, then you've lost a major part of what these bloggers are writing about.

Tim McGuire: Absolutely. They won't have anything to talk about. So many people are rubbing their hands in glee at the demise of newspapers. The fact is most news is still produced in this country is produced by newspapers. TV isn't producing it, blogs are doing very little journalism reporting. Without newspapers, the news ecosystem explodes.

Ted Simons: A quote from what the president said a few days ago was, papers are critical to the health of democracy. Do you think most Americans feel that way?

Tim McGuire: No, they don't. And one hopes that we won't have to see the demise of newspapers before people realize it. But he's absolutely correct, it's what I teach practically every class that I'm in. What we're trying to do in my business and future of journalism class, is figure out how we find a business model to preserve that service to democracy.

Ted Simons: I want to ask you what you've found out and have been hearing about some of the newer and more interesting ideas. But back to the president's idea of at least paying attention to legislation that would perhaps move newspapers into the nonprofit category, educational nonprofit category. Does that make sense to you?

Tim McGuire: No, this piece of legislation frightens me no end for a couple of reasons. I don't think newspapers want to be beholden to Congress in any way. But second, just look at the debates going on on health care and other things. I don't want newspaper sausage made by Congress. I think it would be a horrible thing. I mean, you made the point that already in legislation he proposes that newspapers not be able to make endorsements. Well, you can just imagine the line that would form with Congressmen saying, I want this in there, I want to restrict newspapers this way. My hometown newspaper made me mad, I'll get them here. Oh, it could be ugly.

Ted Simons: Could there be a roster of nonprofit out there, a galaxy of nonprofit that a newspaper could pick stories and ideas from?

Tim McGure: There are nonprofits now, MinnPost, the nonprofit webnews operation, the Saint Pete Times is nonprofit, the Christian Science Monitor was nonprofit and the paper went out of print and they are now Web only. It didn't help. Nonprofit is not the answer. It would be much like your operation, having to beg for money all the time. That's not the best way to go. Free enterprise is a wonderful thing.

Ted Simons: Yes, it is. So with all that in mind, and I mean all of that in mind, are newspapers going to survive?

Tim McGuire: I think they will for a time. What people are not focusing on is, you've got a newspaper in this town that's still stopping at about 330, 340,000 homes every day. That's a business, a lot of customers. People are just kind of dismissing that and saying, let's go to the Web. Whoa! A lot of newspapers are still quite strong and in small towns, Victoria, Texas, New Mexico, Kansas, those papers are doing very, very well.

Ted Simons: And hundreds of thousands of people are still looking at getting the newspaper thrown on their driveway. But the newspaper companies themselves are bleeding money. It's one thing to say that these people are getting papers. But if they don't survive, no one's going to get a paper.

Tim McGuire: But it's spelled d-e-b-t. They took on way too much debt. Is that unique to newspapers in this economy? I think not. Everybody got way too much in debt. Newspapers are still making money above that debt line. They've just got to -- so bankruptcy may in fact be the answer for many. That may not be the bad news. Reorganizing may be the good news.

Ted Simons: All right. You referred to it earlier. Let's get to it real quickly here. Are there ideas out there? What are you seeing as far as delivery systems that make sense and can turn a profit?

Tim McGuire: It's not about delivery systems really. What's happened to the business is the advertising model blew up. Advertising subsidized newspapers to the tune of 80% of the revenues. Macy's was paying for the Washington Bureau and never really appreciated it. Classified advertising has absolutely blown up. That advertising problem is at the root of all of this. Will it come back? It's going to come back a little bit when the recession ends. It's a secular problem. If it comes back, say, some people think 40%, you could start to reorganize newspapers on that basis and start recalibrating your profit expectations.

Ted Simons: So there is a way to keep newspapers alive and growing, even if we don't know what that way is yet.

Tim McGuire: I think people are going to find a multiplicity of ways to make a business of it.

Ted Simons: Very good to see you again. Thank you for joining us.

Tim Mguire: Thanks.

State Land Commissioner

  |   Video
  • Arizona’s new State Land Commissioner, Maria Baier, talks about challenges facing the department and efforts to sell and develop State Trust Land.
  • Maria Baier - Arizona State Land Commissioner
Category: Government

View Transcript
Ted Simons: Back when Arizona became a state, Congress gave us more than 10 million acres of land to hold in trust for public schools. Today more than 9 million acres remain. These state trust lands are leased and sold primarily to benefit education. The process is managed by the state land commissioners. Former Phoenix City Councilwoman Maria Baier was appointed to the post in June, and we'll hear from her in a moment. First, here's what her predecessor had to say about Baier and her new job.

Mark Winkleman: Let me just say I think she is a terrific choice. When I took the job I needed all the help I could get. Maria's got a wealth of background with the trust lands and she's been involved in the trust lands reform effort. She doesn't need that kind of help. I wish her a lot of luck, the times are very trying and the budget pressures are as bad as it's ever been. The staff is significantly lower than it had been, but yet the tasks are much the same. How do you do as much as you can with less? It's not just the land department, it's everywhere. But you've got so much money, and it goes for education, and that's a pretty good cause.

Ted Simons: Joining me to talk about her new job with the state land department is State Land Commissioner Maria Baier. Good to have you in the program. Thanks for joining us.

Maria Baier: Thank you, Ted.

Ted Simons: Any surprises so far? Your predecessor talked a little bit about some advice or what he saw and what you're going to see. What are you seeing?

Maria Baier: I am seeing an economy that has touched the land department as it has touched other landowners. We're staying very busy at the land department with other kind of sales such as open space sales and rights of way and mineral leases and those types of things.

Ted Simons: Tell us about your background. This seems to be something that you were made for.

Maria Baier: First of all, I enjoy it very much and it's a great privilege to serve in this capacity. I did recently serve on the City Council, that gives me the perspective of cities. I have an open space background and I served on the governor's staff as a policy advisor in growth and natural resources. I represented the industry for a period of time so I know how the business community thinks. I do have some background that helps me understand the job.

Ted Simons: Let's understand the job and the department. Basically selling and leasing public lands, correct? Getting the best deal you can.

Maria Baier: I would say yes, with one minor suggestion that we call them trust lands. They aren't public lands like parklands or BLM lands or Forest Service lands. They were granted to the state of Arizona by the federal government with the express condition that they be sold and leased to generate revenue for the beneficiaries, which are 13 public institutions. Almost all of the land, 87%, is held in trust to benefit public schools. They are not really public lands. You have to have a permit to use the land or have a lease or have bought the land to be on it legally.

Ted Simons: And your job is to find the best use for the land, the best time to sell or lease, and get the best price.

Maria Baier: Exactly. That's it in a nutshell. We're supposed to be making money. A lot has to do with the land on the market, the economy, the timing of the sale.

Ted Simons: So much of the land is leased, correct? Especially rural lands. Talk about that and how ranchers and such can be stewards of the land, as well.

Maria Baier: We're very fortunate, 85% of our land in the inventory of the 9.3 million acres is leased for grazing purposes. And far and away, the folks who are our lessees on those lands take very good care. We're grateful for their efforts and they bring in revenue to the trust in areas where there otherwise wouldn't be any revenue for the trust beneficiaries.

Ted Simons: Indeed. But the bigger area would be in commercial leasing. How that is going?

Maria Baier: Well, the big dollar sales are not occurring very much right now. Because we are a perpetual trust, we last forever. We aren't in any hurry to sell land in a slow market. We need to wait until the economy recovers to put land up for auction. The exception is those folks who come to us with deals where the land department may receive a share of the proceeds from the future use or future sales of that land. So we are allowed to participate in future profits. The only lands that we would think about selling or leasing that are high-dollar urban lands, are those where there's some upside on the end of the transaction.

Ted Simons: Gotcha. How best do you balance the competing interests? You've got all sorts of folks wanting all sorts of things. How do you manage that?

Maria Baier: The mission of the trust is so clear that we have to sell for true value, it's called. It's been interpreted as highest and best. We just need to look primarily at the amount of revenue that we can generate. That's first and foremost. But we do look at the long-term benefit to the trust. So if we know that holding on to a piece of land because we're going to get future zoning or something on it, we can defend not moving a piece of land right away. Or if there's going to be a road coming in in the near future that's going add value, we can wait and sell it at that time. The other competing interest is the conservation community. We do work through issues with that community, as well.

Ted Simons: How does re-classifying for conservation purposes work? What are you looking at there?

Maria Baier: You know, there's a very well-defined definition of the word conservation in statute right now. It really has to do with the quality of the lands, the terrain, what the fauna and flora are on the land. All kinds of things that go into making a property worth conserving. But it's a very well-defined word, conservation. There is a proposal right now that the governor, my boss, Governor Brewer, is advancing to reform how state trust lands are managed to allow greater conservation of some of these lands across the state that really are signature landscapes and deserving of protection.

Ted Simons: I know the Governor and legislature have been cutting things right and left as far as budgets are concerned. Your department is no different until the funding mechanisms change. Let's take a look at that right now.

Mark Winkleman: The department has chronically been underfunded. There needs to be a change. This year is a landmark situation because what I've argued for the last six and a half years is we're legally a trust. Every trust I've ever dealt with funds its operations out of what it makes. There isn't any reason the land department should be any different. You've seen the last several years we've produced sales of almost $2 billion a huge amount of money. We certainly have enough money to pay our own way. The annual budget has been going down, but it's been as high as maybe $17 million and down to $13 million now. We easily confirm that from the proceeds we generate each year. The pitch this year is legislature, take us off the general fund. We can help you with your problem of balancing the budget. Let us use some of the money we generate to fund ourselves.

Ted Simons: It sounds like a good idea, you get your money from what you've developed and generated. It sounds like the legislature has now agreed as a self-funding mechanism. But that is legal?

Maria Baier: The legislative council, the body that advises the legislature in terms of legality and laws, has opined that it is. And that is how the statute that authorized our self-funding this year was passed. It was considered and analyze and they determined that it was legal. We do get to take a small share of the proceeds that are generated through sales of state trust lands to fund the department. As Mark said, it is consistent with the way that most trusts are managed.

Ted Simons: Last question: Quickly, compare and contrast Phoenix City Council and what you're doing right now.

Maria Baier: The main thing is with the City Council you really deal one on one with citizens. And it's very street-level service delivery oriented, day to day. My backyard kind of stuff. The land department, big parcels, big deals, mostly business interests that you deal with, both enormously fulfilling opportunities and ones for which I've been grateful.

Ted Simons: Very good. Thanks so much for joining us, a pleasure to have it you in the program.

Maria Baier: Thank you, I've enjoyed it.


  |   Video
  • Lisa Danka of the Arizona Department of Commerce discusses the latest Arizona unemployment numbers.
  • Lisa Danka - Arizona Department of Commerce
Category: Business/Economy

View Transcript
Ted Simons: Good evening, and welcome to "Horizon," I'm Ted Simons. Arizona's job numbers are showing a touch of improvement. The unemployment rate in August was 9.1%, down from 9.2% in July. Here now to talk about the numbers is Lisa Danka from Arizona's Department of Commerce.

Ted Simons: What's going on here?

Lisa Danka: It is a bit of a drop. We refer to it as being statistically insignificant because it's such a small drop,a tenth of a percent. We did have a seasonal gain of 19,700 jobs. It was the lowest seasonal gain for an August in the last 10 years. We think most of it was a result of the schools going back into session, the growth within the government sector, state government, universities and local government, the K-12 systems. There was quite a bit of growth in those two sectors. We also saw growth in the education and health care sector, which is where we see the child care services represented. We believe those two were related to back to school.

Ted Simons: Again, a little bit of encouraging numbers there but, considering the time of year, nothing too crazy?

Lisa Danka: No. We may see some additional impact in October, when we release the September numbers, of additional back-to-school and government. But it is better than where it had been going. A tenth of a percent decline after six months of .3, .4, .5% jumps.

Ted Simons: Indeed. You mentioned back to school and education and teaching and these sorts of things. Is it not true as well that a lot of folks looking for work right now are saying, it's time to go back to school and learn something. It's that time of year, I think I'll take classes and stop looking for work for the time being. Is that a factor?

Lisa Danka: It certainly could be. We hear those stories as well, that there are a lot of disaffected workers. There aren't many jobs being created in the economy so that is a very viable scenario for someone to have given up and go back and improve their skills.

Ted Simons: How about construction? A little bit of an uptick there?

Lisa Danka: Yes, and it's a hopeful sign, we hope. For the second time in a three-month period construction added 100 jobs. We saw those gains in the specialty trades. They have been going pretty strong, it appears, both because there are a lot of homeowners doing refurbishing, and also we think that perhaps the weatherization energy money from the federal stimulus program may be playing into it, as well, because there are a lot of folks working on weatherizing homes.

Ted Simons: What about other stimulus money? When is that going to start playing a factor in terms of the jobless rate?

Lisa Danka: We're hoping in October, when we release the September numbers, we will begin to see some impact in construction, particularly in heavy construction. That would be attributed primarily, I believe, to the road construction that has been funded with the stimulus. I talked with the -- our stimulus czar, if you will, Jim Apperson with the Governor’s Office of Economic Recovery. He indicated those road construction projects are just beginning and money is just beginning to flow out there in the form of wages. So hopefully next month we will see some action there.

Ted Simons: Retail jobs: We keep hearing department stores are just getting hammered right now. Is that reflected in your numbers right now?

Lisa Danka: Well, it is. A lot is of loss is reflected in the home furnishing and fixtures types of stores. Home-building activity is probably part of it, that's where it would be. But retail overall is down, as well.

Ted Simons: How does Arizona stand nationally? It feels like we are at the center of the problem here. But there are folks out there with higher unemployment rates, correct?

Lisa Danka: Actually there are. We rank 30th in the country so there are 29 states with better rates than we do, but the rest of them have worse rates than we do. As a matter of fact, I brought some comparative statistics to kind of place us in a context. Michigan has the highest rate at 15.2%. Nevada is actually second at 13.2. These are rates released by the federal government last Friday. Rhode Island is at 12.8, and California and Oregon are at 12.2. So in the context, you know, although it feels like things are very difficult here, and indeed, we've lost over 311,000 jobs since the recession began in December of 2007.

Ted Simons: Then last question: Seems like most experts are saying these unemployment numbers will get worse before they get better. Your numbers kind of trending on that?

Lisa Danka: This might be an anomaly with this .1% dip.

Ted Simons: Sure.

Lisa Danka: But it would not be surprising if the rate continued to climb a little bit. Arizona's unemployment rate has traditionally peaked after a recession was over, several months in some cases. And that is because as more jobs are created in the economy, people begin to come back into the job pool and are looking for work. Then they get counted in the survey. We see the rate go up because there are more jobs and more people looking for them.

Ted Simons: Interesting. Thank you so much.

Lisa Danka: My pleasure.