A Newspaper Publisher’s Biggest Regret

Rolfe Neill retired as publisher of The Charlotte Observer in 1997 at the peak of his influence in the community, still dashing and charismatic. He remained in Charlotte, stayed active in the community, and from time to time ran into Dick van Halsema, who launched the Observer‘s website the year before Neill departed. 

Van Halsema, who as director of news systems was the top digital person in the Observer’s newsroom, had bent the publisher’s ear about the need to embrace technology to deliver news and information to customers in different ways. 

“You were right,” Neill told van Halsema. “We should have gone faster.” 

Neill, who died recently at age 90, had the top job at the largest newspaper in North Carolina for 22 years, when the Observer was an economic powerhouse with wide reach, and he used it to promote a pro-downtown agenda. (Though in Charlotte, they call it “uptown.”) He was one of the most visible and influential figures as the city transformed itself from regional outpost to a thriving corporate headquarters with a prominent arts community and major league sports. 

Neill was part of a small group of business leaders—which included bankers Hugh McColl and Ed Crutchfield and Duke Power CEO Bill Lee—who developed the vision for the uptown that thrives today. He was proud of the role he and the Observer played in building the city. 

But in a revealing interview in 2016 with American City Business Journals, Neill talked about what he viewed as his biggest shortcoming as publisher: not preparing his organization for the transition from print to digital. 

Some of Neill’s comments about his community were included in the documentary Making Modern Charlotte, which aired on PBS in 2019, but his statements about journalism from that nearly 2-hour interview have not been previously reported. 

“I regret being really a dumbo about the internet,” Neill said. “We were certainly a year or two or three behind because I didn’t understand it, didn’t have any interest in it.”

It wasn’t from a lack of effort on van Halsema’s part. He was so persistent about the need for change, Neill said, “I thought he was in my bed at night, whispering in my ear.”

A Love of Print

Neill was seemingly born with confidence. He called people by their first name, even as a young man speaking with older politicians and businessmen.  

He was born in Mount Airy, spent his early years in various North Carolina towns as his family moved around, and was editor of The Daily Tar Heel at UNC-Chapel Hill. He was business editor of the Observer in his 20s. After holding editing jobs in Florida and New York, he served as the top editor of the Philadelphia Daily News for five years before being named publisher of the Observer in 1975, when he was 42 years old. 

He returned to Charlotte just as some other ambitious men began dreaming big for their city. They included Neill in their group, and he used the Observer to magnify their vision. 

As publisher, all of the Observer’s departments, including news and advertising, reported to him. Journalists generally prefer publishers keep their distance from the newsroom, but that wasn’t Neill’s style. 

The Observer’s first mission was to report the news, he said in the 2016 interview, which was conducted by Mark Ethridge, the Observer’s former managing editor who later was president and publisher of the Charlotte Business Journal. 

But simultaneously, Neill wanted the paper to report on certain initiatives that he thought were important to Charlotte’s growth and prosperity. That didn’t mean the journalists didn’t scrutinize those initiatives, he said; it just meant the Observer reported on them, elevating those projects and issues for public discussion. He also wrote a weekly column that sometimes advocated for projects. 

Neill controlled the region’s dominant media outlet. In the early 1980s, 80 percent of Mecklenburg County households subscribed to the Observer or its sister afternoon paper, The Charlotte News, which was part of Neill’s domain.  

“You wielded the newspaper as a powerful supporting instrument,” Ethridge said. 

“I did, over the objection of the staff, I might add,” Neill said with a chuckle. 

He added, “You have to be very careful you don’t compromise your number one function.”

I was metro editor of the Observer in the 1990s, overseeing the Charlotte-based local news staff. Neill was supportive, and never discouraged me from aggressively reporting on any of the uptown initiatives in which he was involved. 

The Observer was then part of the Knight Ridder chain, which was headquartered in Miami and included well-regarded papers such as the Miami Herald, The Philadelphia Inquirer, and the San Jose Mercury News. It was the second-largest newspaper company in the country. 

Neill’s corporate bosses gave him a lot of freedom because the Observer was highly profitable. He said the Observer routinely had pre-tax profit margins of 25 to 30 percent on as much as $175 million in annual revenue, meaning it was sending roughly $1 million a week to corporate. 

“Our biggest problem was to find bags big enough to hold all the money we were making to ship to Miami,” Neill said. 

In the 1990s, most newspapers were still remarkably profitable; in 1999, Knight Ridder had $3 billion in revenue and a margin of 19 percent. But cracks were beginning to show. Charlotte’s growth helped hide a shrinking percentage of households that subscribed to the Observer; the high-water mark for newspaper subscriptions in the United States was in 1984. 

Newspapers in that era typically got 80 percent of their revenue from advertising (including classified ads for jobs, houses, and cars) and 20 percent from subscriptions. 

Craigslist launched in 1995 and quickly threatened newspapers’ lucrative print classified business. That was one of the first signs that the internet was about to disrupt the advertising dominance that regional newspapers like the Observer had long enjoyed. 

Neill loved print. He enjoyed watching papers come off the press. He mailed articles printed on slick, glossy paper (suitable for framing) to people who’d been in the news, or their family members. 

“He thought print was something that readers treasured physically,” said Jennie Buckner, who was the Observer’s editor during Neill’s last years as publisher. His affection for print was typical of publishers of that era, she said, and they were reluctant to change. 

Neill told associates that the Observer was in the printing business. In hindsight, his own lack of vision “really upset me,” he told Ethridge. 

“This is the case of where you’re the prisoner of your own interests,” he said. “I couldn’t see beyond it because I’m just not a techie and not interested.”

Neill had a vision for Charlotte, but not for The Charlotte Observer. After he retired, Neill said, within six months he realized he’d missed the need for transformation. “I quickly began to see how out of sync I was and how ignorant I was about what was happening,” he said. 

Publishers could play many roles, but the most important was to ensure that the enterprise had a viable future. Neill wished he’d gathered his colleagues and posed the question: What business are we in? 

They weren’t in the printing business any more. 

Van Halsema, who’d urged Neill to move faster on the digital front, eventually left Knight Ridder and started a digital advertising technology company that serves media companies in the U.S. and Canada.

Informed of Neill’s comments from the 2016 interview, van Halsema said Neill was too hard on himself. “We had a lot of fun talking about the potential,” said van Halsema. “He was always open and receptive.”

Van Halsema recalled the 1995 publishers annual meeting in Miami when Knight Ridder CEO Tony Ridder invited the top technology person from each newspaper to join the discussion. Neill and van Halsema attended. 

Many of the publishers, who were under pressure to deliver profits to corporate, were hostile to the idea of digital transformation because they believed print would remain lucrative. “The temperature and tenor in the room is, ‘There’s no way we’re doing this [transition to digital]—this is bullshit,’” van Halsema said. 

The meeting grew so tense that Ridder asked the digital people to leave the room so he could address the publishers privately about the need to prepare for a digital future.  

“There were Knight Ridder publishers who were vehemently opposed [to digital],” van Halsema said. “Rolfe was not one of them.”

He continued: “We were all trying to figure out what we were doing. It was hard to know what was going to happen next.” 

The Deals From Hell

Some version of what was happening—or not happening—in Charlotte and at Knight Ridder was playing out across the country. As newspapers went online in the mid- to late ‘90s, they committed what’s been called digital journalism’s original sin—they gave their content away for free. 

Publishers hoped they eventually could attract a large audience to their websites and sell advertising. Or maybe they thought print would last forever, and their websites would always be a side business. Publicly traded companies had gobbled up many of the larger papers, creating chains that contributed to the groupthink. 

There were a few exceptions. The Wall Street Journal charged for digital access, as did Walter Hussman, publisher of the family-owned Arkansas Democrat-Gazette. (Hussman has bought iPads for his subscribers, and has largely preserved subscriptions and stabilized newsroom staffing.) The nine largest newspaper companies created an alliance in 1995 to sell subscriptions and ads for an aggregated website, but the deal fell apart. 

The prevailing ethos was that digital content should be free, but that business model didn’t work. As readers moved away from print, advertisers did too. Unlike print ads, digital ads were abundant and cheap; you couldn’t click your way to profits. And Google and Facebook took a big chunk of that ad revenue. 

“The whole industry got clobbered because they were sitting around copying each other,” said James O’Shea, the former editor of the Los Angeles Times who now lives in Cary. “They had the opportunity to create a revenue system that relied on content, and they walked away from it.” 

Ridder, the Knight Ridder CEO, has said his company saw change was coming and was determined to adapt. It experimented with electronic publishing in the 1980s and 1990s, even creating a tablet prototype years before Apple went to market with the iPad. But Ridder conceded that none of the initiatives worked out.

“We made our money on print but we knew we had to go electronic,” he said on a podcast this year. “There was internal resistance on the newspaper level [from publishers] to push the internet when the big bucks were in the print.”

To compound their problems, CEOs made a series of bad deals to acquire or merge with other media companies. O’Shea detailed Sam Zell’s 2007 purchase of Tribune Media in his book, The Deal From Hell: How Moguls and Wall Street Plundered Great American Newspapers. Tribune went bankrupt in a year. 

If that was the deal from hell, McClatchy’s purchase of Knight Ridder in 2006 might have been more tortuous for North Carolina readers.  

To swallow the much larger Knight Ridder, McClatchy took on several billion dollars of debt. On its long path to bankruptcy in 2020, McClatchy, which also owns the Raleigh News & Observer, eviscerated its news staffs. (I oversaw cuts to the Raleigh newsroom as executive editor of the N&O for 10 years.)

The Charlotte Observer, which once employed 260 journalists, now has roughly 40 filled newsroom jobs in Charlotte, according to current and former Observer journalists and a staff directory. McClatchy declined to answer questions for this article, including how many journalists it employs in North Carolina.  

Neill loved the Observer’s regional newsrooms in Gastonia, Hickory, Statesville, Concord, Monroe, and Rock Hill, SC. They’ve all been closed. The Observer’s news staff used to generate at least 50 articles a day on courts, cops, schools, local government, transportation, health care, the environment, religion, and business, said former assistant managing editor Jim Walser. Now it produces a small fraction of that. 

O’Shea believes the dramatic decline of most American newspapers wasn’t inevitable. The core of the problem, he said, was that CEOs and publishers didn’t value journalism enough. They were addicted to advertising revenue, and didn’t think readers would pay for digital news. 

The New York Times finally shifted the business model when it started charging readers for digital access in 2011. Within a few years, most local newspapers followed. But it was a tough sell. Digital readers had been conditioned for 15 years to consuming news without a subscription. And years of cutting staff had weakened the publications.

Nationally since 2005, subscriptions (print and digital combined) have declined by 50 percent, revenue is down by 65 percent, and the number of newsroom employees has shrunk by nearly 60 percent. 

“It would be easy to condemn the people who caused this modern tragedy as venal and evil,” O’Shea wrote. “Some were venal, all right. But most of the people who led newspapers to this point in history were smart and thoughtful. They thought they were doing the right thing.”

That’s what makes what happened to American journalism so terrifying, he wrote; this kind of disaster could happen to anyone in any industry. The people who used to work at Kodak, Blockbuster, and Blackberry would surely agree. 

In his influential book, The Innovator’s Dilemma, Clayton Christensen wrote that successful companies—those with good business practices who developed strong relationships with their customers—were the ones most vulnerable to disruption. They were confident in what had worked for them over the years. 

The Charlotte Observer was owned by two companies—Knight Ridder and McClatchy—with reputations as good operators. The paper was a financial and journalistic success for decades, winning two Pulitzer Prizes for public service in one seven-year stretch of glory. 

The Observer’s Kevin Siers won a Pulitzer Prize in 2014 for his editorial cartoons. Last month, McClatchy said it was cutting his job and those of two other Pulitzer Prize-winning cartoonists because of “changing reader habits.” 

No job is safe. A few years ago, McClatchy eliminated the position of publisher. Rolfe Neill’s old job no longer exists.