"It's the Economy, ..."

(November 5, 2013 -- For the benefit of readers, please note that the comments on this post include statements from the Sonoma Index-Tribune and the Sonoma Valley Unified School District, that were the subject of a followup post here.)

The Sonoma Index-Tribune wrote an article last week about "declining" test scores in Sonoma Valley. While I'm blogging about another topic at the moment, I did not want to let this one fly by without comment, as there was an interesting data trend buried in the (somewhat confused) article.

The students entering kindergarten this year were born at the end of 2007 and the first part of 2008.  These are children whose "First 5" years of child development took place during an economic collapse.  All of the students in elementary school today have spent at least half of their lives in a depression.  It is my suspicion that the consequences of that experience will be visible in the data for decades.

The data trend stumbled upon by the I-T is not unique to Sonoma Valley. Austin Creek Elementary is a nice example -- it's ranked as a "10" on the statewide rankings, and it's the Santa Rosa school geographically closest to Sonoma Valley.  Austin Creek's 2013 Growth API Report shows the same trends as Sonoma Valley.  Its scores are plummeting -- Hispanic/Latino student performance fell by 51 points, and Socioeconomically Disadvantaged student performance fell even more dramatically, by 113 points.

Austin Creek Elementary

 available at http://tinyurl.com/pjq7vok

Yet it's unlikely that Austin Creek's (or anyone else's) ranking will change as a consequence of these declines, because school rankings are relative things. If everyone starts doing worse, the rankings stay the same.  And that's exactly what's been going on, as nearly every student, across California, has faced an extraordinary tumult and disruption in their daily life.  This is not just due to school budget cuts, but more importantly, because their families are being crushed by an ongoing, drawn out economic depression.

I do, though, want to draw attention to the fact that there were problems with the substance of the reporting, which probably has more to do with the author's unfamiliarity with the testing regime than anything else.

First, the article consistently confuses the difference between Growth API and Base API.  For instance, the article states that "[t]he [high] school’s base API was 712 in 2013, down from 723 last year and down from 735 in 2008." This is easily, demonstrably wrong -- the 2013 Base API won't be released until Spring of 2014; the only thing that's been released for 2013 is the Growth API.  It's not uncommon for the less experienced observer to make that mistake, and most of the multiyear comparisons in the article thus don't really hold up as a consequence.

Further, while the title of the article concerns STAR results, there's next to no discussion of the specific results at all.   The STAR test results are granular -- results come out for each school, each class, and each quintile within each class. An article that gave some guidance for parents on how to understand those reports would have been useful. However, that explanation would not have been a short one, and would have shown some very positive results for the District.   But the article wanted to talk about Base API for 2013 (even though that's not available yet), and unfortunately, a detailed discussion and analysis of the STAR results was a casualty of that decision.

Finally, the tone of the article will probably cause some unnecessary headaches.  Every time one of these pieces comes out, there is a certain amount of rending-of-clothes by the teachers and administrators at SVUSD. But beyond the illustration of the economic impact of the Great Recession/Lesser Depression, I don't think there's much to take away from the article for those interested in improving the condition of Sonoma's schools.

New York Times: Law Blocks ATF's Use of Big Data.

"Legal Curbs Said to Hamper A.T.F."

Goode, Stolberg et al., New York Times, Dec. 26, 2012
available at http://tinyurl.com/cbdbaes

The New York Times, like other news sources, is picking up on the fact that the Obama administration is preparing to overhaul how the Federal government learns about the potential for gun violence.

The description of the Department of Alcohol, Tobacco, and Firearms (ATF)'s ability to track gun purchases is positively ridiculous, when one thinks about how easy these things are for department stores like Target.  If they're really still using printouts and paper, that's a travesty.

The worst part, of course, is that the law is written so that the government agency is less effective.  After Newtown, the administration is (presumably) getting ready to propose extensively changing the law, which makes sense.

While I can imagine that there are a series of careful provisions that may be put in place, I think the government should make clear that not just ATF, but also state-level social service organizations, should always be given access, at the very least, to the same kind of information that is already possessed by the likes of Wal-Mart and Amazon.

Where Newspapers Are Headed ...

The Economist took at look at the newspaper industry this week.  They touched on their article from 2006, which noted the dire future of the industry (a prediction that has come true). However, their evaluation is that the future looks less grim six years on, mostly due to the advent of paywalls.

"News Adventures"
The Economist, December 8, 2012
available at http://tinyurl.com/az8vcfv

The unusual feature of newspapers, like most media, is that they have been counter-majoritarian in the past. An editor would undertake a campaign that was unpopular, and change the minds of his readers -- often if not always to the betterment of the community.  Businesspeople took note -- a successful but unpopular corporation could use the same vehicle to burnish its reputation through a media campaign -- or, better yet, avoid that problem entirely through careful advertising over time.  This created an economic link between local business and the paper, which had significant consequences.

The close connection between local businesses and a newspaper built on advertising meant many small towns had an essentially conservative institution that nonetheless valued ideas and the importance of the 1st Amendment.  The small town newspaper could therefore be an important bulwark against insularity and parochialism across the United States.

The new economic model, though, is different; it is based on subscriptions, not advertising.  The newspaper must now cater to its readers to a greater degree, and potentially their prejudices.  The Economist points to the future of newspapers as being similar to the future of radio, in a somewhat unconcerned fashion.

It is understating the matter to suggest that there are merely "critics" of the changes to radio.

Of course the counter-majoritarian feature of media in general has not gone away; the reasons businesses need to reach customers have not changed, merely the vehicle has (Google or Facebook, instead of the New York Times). However, there is a greatly diminished local element to such technologies -- one of the cast of characters in a small town, the  newspaper editor, has no analogue for a web site.

This has happened in other industries -- the local banker has been replaced with a Director of Business Development dispatched from the city, and a nurse-practicioner working at a distant HMO's facility substitutes for the local GP. The services (banking, health care, advertising) are perhaps provided more economically, but the open question is whether the community is diminished when its most powerful, insightful, and respected members, the banker, the editor and the doctor, are subjected to new economic pressures from unexpected directions. The radio model, thus, should be cause for concern for newspapers -- it may be more a poisoned chalice rather than a magical elixir.

So what was the Press Democrat's sale price?

North Bay Business Journal, Nov. 1, 2012
available at http://tinyurl.com/anukn9q

Sonoma Media Investments, LLC, controlled, essentially, by Doug Bosco and Darius Anderson, has purchased the Santa Rosa Press Democrat, The North Bay Business Journal, and the Petaluma Argus-Courier from Halifax Media Group, which had acquired these papers less than a year ago from the New York Times.  These newspapers are a critical source of information for Sonoma County, and their editorial judgment has been generally respected by the community. Puzzlingly, though, the sales price was not disclosed.

Cynthia Gorney, "Battle of the Bay"
in Leaving Readers Behind:
The Age of Corporate Newspapering, p. 355.

I looked into the matter a bit, trying to find out, at least, what the New York Times had paid for the papers in 1985.  The sales price wasn't disclosed then, either.  I did manage to track down some apocryphal information, suggesting the price had been high indeed; Evert Person (misspelled "Everett" in the source), the publisher in 1985, is reported to have said “I got this offer, I just couldn’t believe how high it was, I accepted it.” I don’t doubt there are Sonoma County residents who know how high it was, but none of them are talking, so I decided to consult the numbers.

The New York Times Company

1985 Annual Report, p. 12.

Figuring the New York Times Company is publicly traded, I took a look at their 1985 Annual Report (UC Berkeley allows the public free access to the Historical Annual Reports database on ProQuest).  The report was deliberately vague; it noted that $389 million was spent by the Times in 1985 on acquisitions, specifically to acquire five newspapers and two radio stations.  The report didn’t break the numbers down any further.

Scratching my head a bit, I decided to poke further and see if the purchase price for the other papers acquired by the Times in 1985 was available.  It was—the papers had been owned by a nonprofit, and the sales price was eventually disclosed on their Form 990.  It was $156 million. In 1985 dollars, that was about $1,426 for each paper circulated daily; in 2012 dollars, $4,001 per paper circulated.

Spartanburg Herald-Journal
Jan. 28, 1990, p.10

Did the  New York Times make a similar offer for the Press Democrat in 1985? If so, at $1,426 per daily circulated, the offer Evert Person “couldn’t believe” would have been $107 million (or $299 million in 2012 dollars).

By way of contrast, Halifax Media Group paid $143 million for the Press Democrat and 15 other papers last year, and on a per-unit of circulation price, the Press Democrat would have been worth a mere $18 million in that deal. In effect, the Press Democrat’s value collapsed by over 90% in the intervening 25 years.

"Reflections of a Newsosaur," Mar. 29, 2010
available at http://tinyurl.com/y9xklkw

A 90% collapse in value for the Press Democrat is, disturbingly, consistent with the state of the rest of the newspaper industry.  The Daytona News-Journal, for instance, whose circulation has fallen roughly in line with that of the Press Democrat, was valued at $300 million in 2006; by 2010, its reasonable value was estimated in legal proceedings to be a mere $20 million (a 93% decline in value in the four year period).

The Sonoma Index-Tribune (also owned by Sonoma Media Investments, LLC) has tipped its hand to a degree regarding the purchase price.  Its article noted that the agreement included the Press Democrat’s Rohnert Park printing plant, built for an estimated $30 million in 1986.  A $30 million valuation for the Press Democrat without real estate seems high, but including the facility, it is not wildly unreasonable; a building of the size of the Rohnert Park plant (even if it is 25 years old) certainly seems like it might reasonably be worth $12 million.

Sonoma Index-Tribune, Nov 1, 2012
available at http://tinyurl.com/bjkjhf8

Of course, it is also possible that the value of the Press Democrat was set at zero -- the New York Times has had serious labor problems relating to pensions for several years, and there have been extensive cutbacks at the Press Democrat over the last half-decade.  Perhaps there was also some assumption of debt or other liabilities by Sonoma Media Investments, LLC, or a measure of “seller financing” by Halifax Media Group to make the entire deal go.

However, the main point stands – there has been a complete collapse in the value of the Press Democrat in the last seven years.  However, I think the implications for the community are actually more serious than merely being one of the largest business failures in the County’s living memory. But those are other posts, for other days.