Sports department kicked into touch: New game strategy?

We may be witnessing the beginning of deconstruction in the newsroom – not their destruction but changes that could alter their shape and function.

A week ago, the New York Times announced that it was, to use an Americanism, shuttering its sports department and moving its 35 reporters and editors to other roles. It is handing over responsibility for sports coverage to The Athletic.

The Athletic is a sports website that the New York Times Company bought in January 2022 for $US550 million ($NZ818 million). It has almost 400 journalists covering more than 200 professional sports teams and churns out about 150 stories a day. It had over one million subscribers when it was bought, and that number has tripled in 18 months and is trending upward. Nonetheless, it has yet to turn a profit, and in the first quarter of this year lost the equivalent of more than $NZ12 million.

It is unsurprising that the New York Times Company wants to optimise its purchase and cut those losses (it recently laid off 20 staff at The Athletic), but what is surprising is that it has not opted to integrate The Athletic’s staff and stringers into the NYT newsroom but has done the opposite. It has decided to close its sports department and, in effect, to take a service from its subsidiary. That service will provide coverage for the print edition of the Times as well as the parent website.

Sports sections may be well read but they are a notoriously poor destinations for advertising. Here, for example, the Weekend Herald last Saturday had less than half a page of advertising in its sports section and the Stuff metropolitan papers had none. The New York Times has reduced the number of sports pages and it no longer has a stand-alone sports section in the newspaper.

However, what we may be witnessing is not a manifestation of a reduced commitment to sport but a new way of thinking about newsroom structures.

There is nothing new about news media sharing content from within various parts of their groups. In step with reduced newsroom staffing in New Zealand, we have seen the rise of shared pages that has led, in the case of sport, to the virtual elimination of local sports coverage in Stuff and NZME regionals. They are, however, essentially in-house arrangements and part of an integrated digital newsroom approach driven by national websites.

What the New York Times has done is to hand over responsibility for filling its sports pages to a subsidiary company, albeit under the eye of the parent company’s senior editorial executives. Will it end at the sports department? While the Times Company doesn’t own the equivalent of Bloomberg to which it could hand its business section, it does have shareholdings in a number of undisclosed digital enterprises that could be brought into the fold.

Other companies could do likewise. The octopus like News Corp doubtless has subsidiaries that could emulate the NYTC move.

And, if we look close to home, there is an obvious candidate for a similar transition within the NZME group.

The publisher of the New Zealand Herald last year bought Businessdesk, the digital subscription service founded by Pattrick Smellie and Jonathan Underhill. The Herald already republishes the ‘Best of BusinessDesk’ and promotes the subscription service on its website. BusinessDesk employs 20 journalists and, perhaps with a little augmentation, could take over the business section of the newspaper, rebrand it as BusinessDesk, and enjoy subscription gains in the process.

Such cross-business models would appeal to NZME, which already offers a subscription to the Herald’s lifestyle Viva insert and magazine that is separate from its own premium paywall. It also has an arrangement to host the New Zealand Listener’s new digital subscription site on behalf of Are Media. Neither, however, offers the potential for full departmental ‘shuttering’ that BusinessDesk could.

Stuff owns New Zealand Gardener and NZ House & Garden. Could it turn over its lifestyle sections to its magazine division?

Could NZME acquire the New Zealand operations of Australia’s Sports Entertainment Network, adding SENZ radio commentary to their existing broadcast offering while replacing the Herald’s sports department?

An insightful piece by the Herald’s editor-at-large Shayne Currie in his Media Insider column last weekend suggested that New Zealand news media have some bleak times ahead (we are one of a handful of countries forecast by global media agency GroupM to be facing declining advertising revenue this year).

Currie interviewed the New Zealand contributor to that forecast, GroupM New Zealand chief investment officer, Steve Tindall. Tindal told him that, while some in the industry would be holding on to the desk going: ‘Why can’t it be 1985?’, longer-term thinkers were already acknowledging that they had to change what they are doing.

That suggests moves into new businesses.

There should be too much cachet in journalism for the big players to abandon it, but they could well be looking for ways to horizontally integrate and cross-promote their production with some of those new endeavours.

Tindall forecast increased mergers and acquisitions in the tough times that New Zealand media are facing. In the past that has usually meant that the acquisition is subsumed by the behemoth buyer. Now, the New York Times’ move suggests that need not be the case. There could be scope for digital start-ups with fragile business models to survive– and even grow – by taking over some of the sections traditionally produced by their new owners, co-owners, or partners.

The move being pioneered by the New York Times Company does not suggest erosion of journalistic standards. When the output of almost 400 journalists replaces that of 35, there must be nett gains. On that basis, the strategy is worth considering elsewhere. In time it could see news media companies becoming – at least in part – the aggregator/curator of sections provided by subsidiaries that also have independent revenue streams contributing to overall viability.

However, it is vital that journalism is not degraded. Too often, ‘consolidation’ or ‘integration’ is double talk for cuts in both quantity and quality. It would be disastrous if the reasoning behind adopting the NYTC strategy was no more than a gleam in the eyes of the marketing department and satisfied grins in the finance department. There must be no blurring of the lines. Subsidiaries or partners outside the realm of journalism have no place in the strategy: A page of property ‘analysis’ that is sourced to a subsidiary whose job is selling real estate is not editorial content. It is an advertising supplement.