Enterprise Cutting From the Newsroom But Editor Blames Columnist For Loss of Ad Revenue

That alone would be news as the paper is having to further contract, in light of declining advertising revenue during this time of economic downturn.

“We thought we could stand the brunt of the bad stuff,” Debbie Davis told the Sacramento Business Journal. “But we’ve been losing money and had to stem the red ink.”

How devastating are these cuts?  According to the article, the four employees laid off this week include “associate editor Linda DuBois, entertainment editor Derrick Bang, sports writer Conor Tekautz and Marianne Freeman, a member of the production staff.”

“The reductions leave a newsroom staff of 16; 10 are full time and six, part-time. The Enterprise has lost about a third of its newsroom staff in less than three years. The paper eliminated its Monday edition in February 2009,” the Business Journal reports.

All of that makes a good deal of sense until one reads this, “The cuts also follow loss of an advertising contract with Hanlees Toyota, fall-out from a column written by Bob Dunning. Classified advertising is down, too, due to the sluggish economy.”

The question is, why would Bob Dunning’s column cause Hanlees to pull their advertising?

First of all, he has opposed the Zipcar deal to a logical absurdity.  And second, he praised the million-dollar loan to Hanlees.

As the Sacramento Business Journal reported in August, “The city agreed this week to loan up to $1 million to Hanlees Automotive Group so the company can establish a Volkswagen dealership near its other brands along Davis’ auto row.”

“The Volkswagen dealership, which would relocate from Napa, would set up shop in Hanlees’ former Ford store at 5000 Chiles Road. The Ford dealership closed in October as part of the automaker’s consolidation, leaving a vacancy in the Davis Auto Center,” the Business Journal continued.

“Hanlees, the dealer with the most auto brands in Davis, needs the city’s financial help in order to construct and establish the Volkswagen store, which would employ 30,” they reported.  “The city, in return, would attract more shoppers, increase sales- and property-tax revenue, and generate jobs.”

On September 14, Bob Dunning contrasted the Zipcar deal, that he described as a “one-sided, give-away-the-store contract with Zipcar,”  to the “one-time, million-dollar loan to local car dealership Hanlees.”

He continues, “Now, take the million-dollar loan to Hanlees, a longtime, locally-owned, solid corporate citizen in this town that has provided many, many local jobs over the years, has provided great amounts of tax revenue to the city and has contributed mightily to many worthy local causes … exactly the kind of business our town can and should be proud of …”

Furthermore, “The council, acting as the Davis Redevelopment Agency, agreed to lend Hanlees $1 million at 3.5 percent interest over 10 years with the possibility the loan can be forgiven in its entirety if the dealership generates significant tax revenues for the city … and exactly how does Hanlees generate significant tax revenues for the city? … by selling cars … lots and lots of cars … which, not surprisingly, puts more cars onto Davis roads, the exact opposite of the stated goal of the Zipcar contract.”

Mr. Dunning continues, “The loan to Hanlees will be used to bring a new Volkswagen dealership to Davis and certainly can be defended as part of a redevelopment effort to add jobs and sales tax revenue to the city … besides, it’s a loan, not an outright gift like Zipcar has received, and no city employees will be required to maintain or advertise Hanlees ‘ vehicles … but the only way that loan gets repaid is if Hanlees goes gangbusters and sells all sorts of new cars to Davis residents.”

He concludes, “There is no requirement that these be “green” cars or “electric” cars or anything of the sort … just sell a whole bunch of cars and pay us back through the increased tax revenues such sales will generate … the city, in fact, is banking on it, actually rooting for Hanlees to sell hundreds and hundreds of new cars over the life of the loan.”

As you can see there is not one hint of criticism in that entire segment.  Zipcar would probably be justified if they wanted to pull an advertising contract from the paper, but Hanlees?

According to our research, that is the only time that Mr. Dunning even mentions Hanlees in his column. 

From that it would appear illogical that Hanlees would pull their advertising from the Davis Enterprise.

So the question is why would Debbie Davis blame Bob Dunning for this?  Even if it is true, why mention him by name at all?

I certainly have gone toe-to-toe with Mr. Dunning on a few issues in this community, as my regular readers can attest.  But here he appears blameless.

I asked Mr. Dunning about this and first of all, he read the story for the first time when I sent it to him.  And second, he was not inclined to stir the pot.

He found it difficult to believe that they would have pulled the ad based on what he wrote, but said he had no problem with Debbie Davis sharing it, if that’s what happened.

I understand that puts Dunning in a tough position of criticizing his boss, and even Bob Dunning probably is not inclined to do that.  I simply see no plausible explanation that Dunning’s column led to Hanlees pulling their advertising.

However, this episode does illustrate, unfortunately, that not only is the City of Davis reliant on auto sales for their sales tax revenue, but the Davis Enterprise is reliant on the auto companies for their ad revenue.  We know that the Davis Enterprise took a hit when Gottschalks went under.

In the long run, the newspaper companies that survive are going to have to restructure how they make money.  And that is going to be a struggle.

For her part, Debbie Davis feels that the Davis Enterprise will survive in part because the community is committed to having it survive.

“It’s a lot of years to lose in one day and very difficult,” Debbie Davis told the Sacramento Business Journal. “It’s hard to say goodbye to people you’ve worked with for a long time and who mean something to you as a person. Yet already, I am forced to move beyond this and lead people into the future.

“Honestly, I’m sad, but if any paper makes it in the Great New World, it’ll be a paper like the Enterprise because the community really cares that we make it,” Ms. Davis said. “The challenge is how to figure out, with fewer people who are busier than ever and always have more stories than they can write, how to avoid burn-out.”

They also report that there is no talk of closing any of the McNaughton Newspapers chain, which includes seven local papers: The Daily Republic in Fairfield, the Mountain Democrat in Placerville, the Winters Express, the Georgetown Gazette, Cameron Park Life and El Dorado Hills Life.

—David M. Greenwald reporting