Aaron Kushner Fires Back at LA Register Criticism: ‘It’s Not a Gamble, It’s a Simple Business Strategy’

The Freedom Communications CEO has come under fire for launching a daily newspaper, then announcing budget cuts just two months later

Last Updated: July 16, 2014 @ 4:34 PM

After coming under fire for launching the Los Angeles Register and then announcing budget cuts a short time later, Freedom Communications CEO Aaron Kushner is speaking out.

In a wide-ranging interview Thursday with TheWrap, Kushner defended himself against critics who have called him out-of-touch for backing print in the midst of its widespread decline as a business. The paper, which debuted on April 16, billed itself as the new voice for a sprawling city served by the Los Angeles Times and the L.A. Daily News, among other outlets. But two months later, Freedom announced it was enforcing a mandatory two-week furlough for staff at the L.A. Register and its sister publication, the Orange County Register.

“Ninety percent of our business is print,” he told TheWrap.  “It’s the core of our business. It’s our core demographic getting our core product.”

Kushner bought the Orange County paper in 2012. Two years later he expanded into Los Angeles. Thus far, many media pundits consider his investment in Southern California media to be a failure. The press is even fighting amongst themselves over a perceived kid-glove treatment for Kushner in stories. TheWrap asked Kushner what went wrong, what’s going right and what he’d like to say to those piling on.

Also read: OC Register’s Aaron Kushner Announces Los Angeles Register Expansion

TheWrap: Your investment and plans for the Register were very ambitious: What went right and what went wrong?
Aaron Kushner:
What went right is still going right, which is we’re growing our business.

Don’t you believe that things have gone wrong?
Anytime you have to see members of your team leave, those are very difficult days and decisions to make, but we have to align our costs with our level of growth.

So what was it about your original plan that didn’t go as you originally forecast?
As we’ve said, we would like to — and hope to — get to a growth rate of double digits. Right now, we aren’t yet there and are growing in the low single digits, so we have to have a cost structure that is in line with that level of growth.

Also read: OC Register Publisher Aaron Kushner: ‘We’re Still Actively Interested in Tribune’ (Exclusive)

There’s been a lot of criticism of not only what people are calling your gamble on print, but even the media coverage of it. How do you respond to both of those?
(Laughs) Pundits talking to each other about who can be more negative about newspapers, us, The Los Angeles Register, whatever — that’s between them.

Lost in all of this is that a) we are growing, b) we launched a major new newspaper in Los Angeles, which is doing very nicely and we’re really pleased with, and that we’ve hired — even after our restructuring — more journalists at the Register than every other newspaper in the country combined … and have a newspaper that is 50 percent thicker than when we started two years ago. Literally. On top of having of course launched what we feel is one of the better major metropolitan newspapers in the country called The Los Angeles Register. And we’ve done that in not even two years.

So it’s not a gamble, it’s a very simple business strategy, which is we believe in quality, we are focused on delivering great quality to our subscribers and our advertisers. It’s not a print or digital strategy, it’s a quality strategy. It’s about our subscribers and our advertisers.

It may be simpler, whatever, for critics to write that we are focused on print. When you have more journalists, when your journalists write good quality narratives, they’re not just writing for one medium, they’re writing for all the mediums that we deliver.

So the argument that by investing in good, quality journalism that we’re somehow print-centric or focused on print in lieu of digital ignores the reality, which is why do people go to the website? They go for the quality of the content. So when you produce more quality content, you are directly improving what you’re offering digitally at the same time as you’re directly improving what you offer in print.

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Do you still believe in print journalism?
Ninety percent of our business is print. To say that we want to ignore it, reduce it, don’t like it, think it’s going away — it’s the core of our business. It’s our core demographic getting our core product. And if we can do a better job of that, we absolutely are going to do that. But that doesn’t mean that we’re ignoring digital.

In fact, the more great journalism that we provide — that great local community-building coverage — the better both digital and print become.

The layoffs that happened, the furloughs … was there any way to avoid those, looking back? Was the staff too large?
You can ask any innovator, ‘Should you not innovate because if you innovate and don’t get it perfectly, exactly right, you’re going to have to make adjustments?’ … No one asks that question. Of course, you go and innovate and you go and adjust based on what you’re learning as you innovate.

Should we not have tried to grow at double-digits and really change the whole trajectory of the business? Sure, that’s certainly a — I’m not sure I’d call that a strategy so much as the absence of a strategy. We believe in quality journalism and that by improving the quality of what we offer our subscribers and our advertisers we can grow our business.

The speed, timing and amount that our subscribers and advertisers reward us for that investment, you don’t know until you make the investment. And then you have to adjust based on what you’re learning so that you can continue to invest and grow.

So I don’t know that we’d do anything different. Does that mean that we got it all right? Of course not. But to say that you aren’t going to try because you might not get it exactly right, well that’s not much of a strategy and it’s certainly not leadership.

Also read: Newsweek Returns to Print, Allegedly Unmasks Shadowy Bitcoin Founder

Do you feel like it’s a failure at all or do you feel like it’s a success?
I don’t think it’s either a failure or a success. I think it is what it is. We’re very early in trying to figure out a business model to profitably grow a major newspaper. We are very early in that process, we’re learning, we’re making progress — is it as fast as we initially wanted? No, it most definitely is not — but that doesn’t mean it’s a failure. Nor does it mean it’s a smashing success. It is what it is: slow, hopefully steady progress.

So what do you see for the future? What’s the goal and what’s the realistic measurement for success?
Our first goal is to have steady, single-digit growth year-over-year profitably. And if we can do that for multiple years, that adds up. If in the course of doing that we find some opportunities like potential growth of the L.A. Register — which is a really wonderful product … do we have an opportunity to increase our growth rate profitably? Sure, we definitely have that opportunity. But our primary objective has always been to be able to have profitable growth with a good quality newspaper.