Tuesday, August 24, 2010

Mr. Marquardt's Dilemma

Dear Readers:

Mr. Marquardt has a problem. The ground has shifted under him and he doesn't know what to do. Except the same old thing.

About three years ago Landmark, the owners of The Capital after the death of Phil Merrill, tried to sell their paper. It was the height of the financing craze and before the market crash of October 2008. With $2 to $3 million in adjusted profits plus being a media property, they expected to get a good price.

A offering memorandum on The Capital was produced and a number of buyers said they looked at the deal. Landmark's expectations were purported to be $25 to $30 million. Yet no one had any interest at that price level and Landmark pulled it off the market.

Then the market crashed. Anything involving print was heavily discounted. The Internet continued to make inroads. And The Capital's operations purportedly began to hemorrhage cash.

Through draconian cuts – foisted on Annapolis by Landmark management in Norfolk - the paper returned to cash flow neutral. Since then, some advertisers have also returned, albeit in a limited way. And a semblance of order has returned to the operations.

The problem is they returned to their old business and editorial model and have hit the ceiling.

Lead by Mr. Marquardt, they have exhausted their aging white male demographic, which will continue to slowly decline. An editorial policy, to cover certain things in certain ways, has also begun to break down while unparalleled negativity has infused its pages. The policies of the paper have actually increased this trend through editorial voices like hate blogger Paul Foer and the vicious news coverage of last year's city elections.

Mr. Marquardt's own self dealing has also fed this. One example is his famous personal editorializing for third span of the Bay Bridge. If that ever came to fruition, then it would certainly significantly raise property values on the Eastern Shore.

A place Mr. Marquardt has much of his net worth tied up in real estate.

Oddly, in the middle of this, The Capital attempted an expansion into four color magazine print pieces. An ill advised attempt to compete with the 'What's Up Annapolis' franchise, it is likely to take years to get to a true break even at its current run rate. This effort is draining important resources and attention away from their core asset, The Capital, and will surely deplete additional value for Landmark.

There is little likelihood the newspaper can regain financial value – even to where it was a few short years ago – with this existing business model and management practices.

Under the leadership of Frank Batten Sr. and now Jr., Landmark has proven itself to be a deft manager of media properties time and again. It's success with creating value and liquidity at The Weather Channel was extraordinary. They get it. And they know how to do it.

Time is getting short. Landmark's manager, Mr. Marquardt, has a nearly impossible task. This, added to his own purported lack of imagination and recent financial challenges, will make the task for Landmark clear.


King of George


  1. The poor dears don't know what to do. After downsizing and getting rid of all the oldsters with their institutional memory of the town they have little to offer.

    Instead of thinking out the issues with some perspective & judgement they hire hourly wage workers with little experience to do the work and skip the due diligence phase & homework. They just make things up top fit the same old story line.Then they get bloggers with questionable journalistic ethics to do their political/editorial bidding for little or no pay in a desperate attempt to stem the financial loss.

    The fourth estate's future is questionable at best as free media continues to drain away the attention of the consumer from their medicocre offering.

    The fact "Police Beat" is the top read pretty much says it all and is solemn testimony to the decline.

  2. Thank goodness they shitcanned Joe Gross.

  3. I love Terra Walters as she loves everything. If She got a cold BigMac with a curly hair in the cheese she would say the service was grand and the fries were yummy. The Capital is clearly the best paper in annapolis available seven days a week, online , at home and in the paper machines.

  4. Reggie SchmoenbergAugust 27, 2010 at 4:21 PM

    in light of the yourself , annapolis sound, and the low quality of the comments on hometownannapolis, the capital is no longer relevant.

  5. Paul Foer is a genius and he gets 200,000 hits a day.

  6. Maybe USAToday can use Foer too to get some readers. They are laying off 9% and focusing on online and mobile readers. Hear that Tommy?


  7. Why must we pick on the paper of our forefathers ?

  8. Why do Ellen and Dale post this stuff? Why Don't they leave poor Mr. Marquart alone?


  10. Just tell me where I can buy stuff on sale cheapest with lots of free parking and I am happy.
    I like to order things on line and have them delivered.

  11. Many feel the Capital is right on and back on track and the fact that many of the old guard are now critics is an endorsement to its reclaimed influence and relevance. I guess the King and others are sorry that the newspaper isn't rolling over any more. The paper, like us all, have recognized that we can no longer tolerate the fools.

  12. The fools ? You mean the redneck commenters ? I think the editors love them, but I know this one guy that had some dirt on Benoit..something about him using influence to get a zoning change to allow for wife's Liquor Store in Piney Orchard.... Benoit freaked out, complained to the editors and they kicked the commentor off and removed his comment. The fact of the matter is , the allegation was proven to be true.

    The Capital also does very little actual journalism and relies on PIO's and spokespeople as sources and for fact checking..

  13. Jonas Green would be so proud of the Capital today.

  14. It would help your credibility a whole lot, people, if you would spell Tom MARQUARDT's name correctly.

  15. marcourt is the one that can't spell his make correctly.