by Kevin Dicciani
The CHCA Board of Directors approved an annual operating budget for the Chestnut Hill Local – called a “do nothing” budget by associate publisher Larry Hochberger – which excludes capital investment. The budget, effective for the fiscal year ending on March 31, 2015, was proposed by the Budget and Finance Committee and passed with a 9-7 vote.
As part of that motion, a separate program for capital investment expenditures would be determined by a special board committee. Those investments ranged from additional spending for Web development to hiring help to push print circulation.
The meeting on Thursday night began with a presentation from Hochberger detailing where the newspaper currently stands.
Hochberger addressed some of the concerns brought up at the previous meeting in March about the decline in print advertising revenue. He noted that the paper has seen a 23.9 percent decrease in print ad revenue since 2007, calling the trend “alarming.”
But, those declines reflect a larger trend in print advertising, Hochberger said. He compared the ad revenue of national newspapers to the Local’s, explaining that while the Local has seen a 16.9 percent decrease from 2007 to 2012, national papers have seen a 52.4 percent decline.
Regional business conditions may have contributed to the decline as well, Hochberger said. He noted that the merger of two real estate agencies, a change in hospital ownership, the closure of a rug store, the Chestnut Hill Business Association buying less advertising, along with parking issues – specifically the kiosks – could all be contributing factors.
Another factor, a major one, Hochberger said, is how and where people get their news. Since 1991, there has been a dramatic drop in people reading newspapers, with more and more people going online to retrieve their news. Because of this, he said, newspapers around the country have lost ad revenue when moving online. The dilemma of “replacing print dollars with online dimes,” he said, is ubiquitous within the industry and a reflection of the times.
A strength of the Local, though, Hochberger said, is that it has a rapidly growing web audience which has more than tripled in the past three years.
“We’re doing better now than we’ve ever done,” Hochberger said. “More people are reading the Local now than ever before, considering both print and online.”
Echoing that same sentiment was Pete Mazzaccaro, editor of the Local. In his presentation to the board, Mazzaccaro introduced alternative ways to reverse the ailing revenue, mainly how an upgrade in the website could increase its discoverability in an effort to reach more people, and how inviting more businesses to advertise online could benefit them and the paper immensely.
“Traffic to the site has increased every year since October of 2010,” Mazzaccaro said. “A better design to the page will help us do what we’re doing right to reach more people.”
Mazzaccaro noted how the Local is already working towards a strategy that emphasizes digital first and how the Local, being hyperlocal with a niche market, is a rarity that should be taken advantage of online.
“And we should be doing more,” he added.
“While advertising sales have fallen in the last seven years for a variety of reasons,” Mazzaccaro said, “chestnuthilllocal.com is a growing success story that has not realized its potential. Now is not the time to put the brakes on investment in the Local.”
Tony Reilly, CHCA treasurer, said that while he couldn’t agree more with the proposals put forth by Hochberger and Mazzaccaro, the Local’s continuing fiscal health meant that passing an operating budget was his main concern.
The motion to pass the operating budget was presented by Reilly and read as follows: “The Budget and Finance Committee proposes that in addition to the Operating Budget, a second budget, a capital budget, be created for the fiscal year ending in 2015 or longer, in tandem with the recommendation of the newly formed Special Committee over the next several months.
“This will address the investment needed in the Local to enhance its market growth, Internet expansion, vision and mission of the board, so that the Local continues to be a viable economic entity for many more years to come.”
“We’d like to pass this operating budget so everyone can get back to work while we work out all the details of the investments,” Reilly added. “The issue for me right now is how we are going to pay for them.”
It was discussed that capital investments could be paid for by taking money from the Local’s reserve fund, which currently contains $81,000. But, Reilly said he was concerned about using those funds for initiatives because they would yield no return on investment.
“We want to invest in the Local, but we need to protect what we have while planning for the future,” Reilly said.
Board member Richard Snowden agreed, saying that the proposals contained a “litany of great ideas” but were akin to a “shopping list – not an investment.”
“I’m not opposed to investing in the paper,” Snowden said. “The paper hasn’t been invested in in a long time.”
Before the operating budget was passed, CHCA secretary Bob Rossman said he thought it was a “good budget” and “very realistic.”
Joyce Lenhardt, vice president for the CHCA’s Physical Division, said she was against a budget that did not have room for investment, and that it was “tying the hands of the Local.”
“I’m concerned that there’s nothing in this budget that lets the Local do anything,” Lenhardt said. “It’s pretty bare bones.”
Mike Chomentowski, vice president for Operations, called the operating budget a “we-don’t-trust-you budget.”
Hochberger called it a “do-nothing budget.”
The meeting ended with Lenhardt presenting a motion concerning the newly formed Special Committee, a temporary committee assigned to oversee the strategic planning of the Local to determine the 2015 budget. The Special Committee will work closely with the Local and will report monthly to the board. It will make recommendations to the Budget and Finance Committee, which will then present them to the board of directors.
As part of the motion, the Special Committee will recommend a capital budget for the Local within 60 days.
In addition to that motion, the following Board members were appointed to serve on the Special Committee: Liz Bales, Julie Byrne, Tom Cullen, Mark Keintz, Arianna Neromiliotis, Bob Rossman, and Richard Snowden.
The motion passed with a vote of 8 in favor and 6 opposed.