Memo from Dean Singleton and Jody Lodovic

May 8, 2009

To: MediaNews Group Employees

From: Dean Singleton

Jody Lodovic

Re: Interactive Strategic Summit

Two weeks ago, 22 executives from across the company, including Publishers, Editors, and Interactive leaders, met to discuss MediaNews Group’s interactive strategy. While our websites attract a significant audience and drive considerable page views, we face three daunting challenges that needed to be addressed. First, we continue to do an injustice to our print subscribers and create perceptions that our content has no value by putting all of our print content online for free. Not only does this erode our print circulation, it devalues the core of our business - the great local journalism we (and only we) produce on a daily basis. Second, our interactive revenue growth has slowed because it has been too closely tied to our print classified business, which has suffered with the advent of Craigslist and other free online classified opportunities. Finally, we are not significantly extending the reach of our audience, as our online products too closely resemble the newspaper, and thus fail to meaningfully reach the next generation of readers.

This interactive summit was meant to address these issues head-on; to build a strategic plan that places a value on our content, protects our core print business, extends the reach of our audience, and creates new revenue opportunities online. We cannot continue to give all of our content away for free; we must consider, create and deploy new products and sites that both decouple our interactive revenue from our classified business and offer a compelling new experience for a younger (non-newspaper buying) demographic. From this conference, we have built consensus on a three pronged approach to enhance our business moving forward:

· We will begin to move away from putting all of our newspaper content online for free. Instead, we will explore a variety of premium offerings that apply real value to our print content. We are not trying to invent new premium products, but instead tell our existing print readers that what they are buying has real value, and to our online audience (who don’t buy the print edition), that if you want access to all online content, you are going to have to register, and/or pay. If a non-subscriber wants the newspaper content in its entirety online, they will be directed to some sort of registration or pay vehicle (and if they are a print subscriber, they will have full access at no charge). To be clear, the brand value proposition to the consumer is that the newspaper is a product, whether in print or online, which must be paid for.

· We will begin differentiating our sites from the newspaper and focus on strategies designed to reach younger audiences and extend our reach. The websites, newspaper.com as we call them now, will become a different product. This new site, which we have been calling news.com, will be a regional news site that is actively managed to present breaking news. It will continue to draw a content from the newspaper (but probably in a more abbreviated form), but will also have user-generated content, community involvement and third party content. News.com will continue to serve our existing audience, which spends a lot of time on our sites, and drive significant traffic. They like and depend on our sites for their national and local news. We must not alienate them as we strive to expand our audience and attract younger people and non newspaper subscribers. Obviously, our sites must draw upon the content of the newspaper, but the presentation of that content will be different. News.com will be an entry page to new content offerings, local retail advertising opportunities and premium offerings.

· We will build a new local utility site (Local.com), which is an ecosystem of local information, resources, user content, shopping guides, and marketplaces. This site will be focused on a younger audience as well as other targeted audiences based on demographics which are attractive to our current and potential advertisers. We have the advantage of being the trusted source of for news and information in our communities and have a large base of traffic to feed into Local.com. Local.com will leverage existing newspaper content and existing traffic, and we will add new content (such as Entertainment/Lifestyle) to target a younger audience. Central to this local site will be an aggregation of city or community sites (in the YourHub model) and marketplaces. Local.com will be the ultimate site for people to find stuff, do stuff, and get stuff done in their local market.

We will initially focus on five or six niche vertical content channels to support targeted advertising opportunities (many of which have reverse publishing opportunities). We will build these out with a common template, for ease of execution and maintenance, and deploy across the company.

New tiered circulation pricing strategies will be considered as part of, and tied to, the above online strategies. Such pricing strategies will be designed to maximize revenue, improve overall profitability, add value to full priced, seven day delivery, subscriptions, and reinforce the value for online content.

In order to execute this vision, we have agreed that these new strategies will be done with a template approach, using a menu of common tools and vendors. We will take advantage of the size of MNG to leverage enterprise solutions and build off a common platform that allows for fast implementation and a companywide rollout.

We will form four taskforces (News, local, premium and technology) to drive these ideas to market. They will focus on content, sales, marketing, research and build a business plan. We will also form a technical taskforce to evaluate the needs of a new content management system.

We will keep you posted periodically as we develop these new products and as this strategy evolves. Our online business is a critical piece of the future growth of this company and is integral to growing and targeting new audiences. Our newspapers continue to attract the largest and most desirable audiences in our local markets, but we feel strongly that developing new and targeted audiences online will position us to deliver the most comprehensive and effective solutions for our advertisers.

Think Piece by Lee Abrams*

April 30, 2009

THINK PIECE: WHINE OR WIN— REDEFINE THE INDUSTRY, YOU'RE EITHER IN OR NOT

Constantly hearing the doom and gloom...the cutbacks, the negative stuff. It's pretty real, but throughout our company there's a LOT of re-invention going on. In fact, when this economy improves, WE will be the ones with the upper hand because instead of dwelling on the pain, we're doing something about it. Economically of course, AND IN CONTENT/CREATIVE. As sad as the state of the economy is, it's equally sad to see people whining, complaining and feeling sorry for themselves and the industry, when that energy can go toward breaking down some walls.

Just a few of the people out there moving FORWARD:
COLOR IN NEWPORT NEWS!

From Digby Solomon:

We had a full house for our upfront party for advertisers last night, announcing we were taking The Daily Press all-color. The Mayor even showed up to praise the Daily Press for taking a proactive stance during a recession to keep up with the times, and to tell people were we’re important both to the community and to local business. We got great feedback from our clients, and reset their view of us from part of a troubled industry to someone who was working to help them market themselves during a recession.

The link to our Daily Press page on you Tube shows the video we presented at the art museum last night to tell the story. The first part is a 30-second commercial we'll be running (free) on WTKR for consumers. It's not Hollywood quality, but the price was right, mostly done in house.

http://www.youtube.com/watch?v=94COrKSORUY

SACRAMENTO VS. YOUTUBE: Instead of letting the web own something, they’re fighting back and claiming their ground as a TV station.

From: Mercer, Brandon
To: Abrams, Lee
Sent: Thu Apr 23 01:05:37 2009
Subject: Local TV

Also.... remember the Southwest rapper you sent out a while ago? I'm working with Southwest to fly him out for our morning shows, and share him with Trib/LTV stations that want him, while he's here.

THE CHICAGO "SUPERBRAND" IS COMING TOGETHER--BIG

It's a MODEL for brands working together. Amazing. A year ago this stuff would be impossible...now, it's happening:
From Joyce Winnecke:
Colleagues,
Last week was Recession Relief Week for Chicago Tribune readers. And it was Recession Relief Week for Hoy, WGN-TV, WGN-AM and CLTV audiences too.
We coordinated editorial content and promotion across the newsrooms and business offices to create a full-market experience for millions of readers, listeners and viewers. Recession Relief Week began in our newsroom as an extension of the consumer team’s ongoing Recession Survival Guide. Very early in the planning stages, we expanded our story lists to include segments produced by each of our partners, many featuring Chicago Tribune expertise. We promoted in every direction possible, in our pages, in Hoy and on-air.
As Tony Hunter said yesterday, we acted like one company for the first time.
You’ll see more of this. We know that using the full strength of Chicago Tribune Media Group is key to our vision of becoming the dominant news and information destination in Chicago. We’re looking for more and better ways to coordinate with our partners.
Sheila Solomon is leading the charge for us. She’s giving WGN our front-page stories to tout on-air each evening. She’s arranging for our writers to discuss their fine work on-air. And she’s finding experts from our newsroom to help broadcast partners when they have specific needs. We want to promote Hoy, WGN-TV, WGN-AM and CLTV every chance we get too.
We’ll seek more opportunities like Recession Relief Week, and with those we will take the all-important next step – working far enough in advance to allow advertising teams to sell against the coordinated coverage.
This editorial coordination and cross-promotion is a critical part of our drive to thrive. Please send me your thoughts and ideas.
Sincerely,
Joyce

I added:

I think, moving forward, we look at topics beyond (and in addition to) the "how to cope with how bad everything is"
Imagine what the GROUP could do with Chicago hot buttons like:

RESTAURANTS
SUMMER!
THE BEARS
THE BLUES
etc...

Around the country I notice there's a LOT of recession help type stuff and obviously that’s important...but the GROUP power focusing on other mass appeal issues and PASSIONS could be very strong.

Lee

60 SECONDS WITH ON WGN AM:

OWNING THE CUBS beyond airing the games…they are engaging the stars with a “60 Seconds” feature. The stars may be time pressed, but getting them for ONE minute shouldn’t be impossible.
Here are three that aired. This week is Ryan Theriot. I'll be sure to have the talent mention the player name at least 3 times in the segment. Once at the beginning....middle....end.
The files are here: http://sn.im/gd95e-fci

AUDIO IN CHICAGO
From WGN TV’s Marty Wilke:
Here's the first look at our new audio logo (incorporating the WGNA sonic notes) for the Chicago TMG brand!
Starts tomorrow on our air and will run everywhere on the station.
Shared w the TMG cross-marketing and promotion representatives today @ our regular meeting and will be pushing out to them today for use on their websites, pre/post-rolls, and presentations -- wherever and whenever we can to co-brand the most dominant brands in Chicago!

And...from WGN AMERICA.
AUDIO LOGO ON A WEBSITE:

www.wgnamerica.com

(I have heard that there's some mysterious research indicating that people don;t like audio on websites. I imagine it can be a little annoying if you are barraged...but it seems to work fine when you click onto Windows or a Mac)

LOCAL IMAGES
Take a look at some of WGN-AMERICA'S "local" images. Of course, 'local' for them is the whole Country. The point here is how the channel captures 'local' flavor via Reality instead of cliché. In other words, instead of the Grand Canyon or a Mom holding a baby that's holding an American flag, these are more REAL America. I think this is a good angle in capturing the REAL market vs. either:

*The clichés: The obvious landmarks that are ore about tourism than those who live there

*The fake: Fake skylines that are....fake

...future "postcards" will incorporate characters. REAL people.

I'm adding 89 new images to our on-air postcard library. Sean, some of these pix are yours, some are Langmyers and some are ones that i've gathered. we've got a good mix of shots here - urban/rural/country/industrial.

Ignore the seasonal one from Ohio - that will air in the fall. the statue of soldiers @ iwo jima is part of a thing i'm putting together for memorial day. the retro stamps are just freakin' cool.

SOUTH FLORIDA TV REVOLUTION

SFL MORNING SHOW : A note I sent to Randy, Ed, Sean and others after experiencing WSFL:

Very blown away by the morning show! Not only the show, but the spirit and attitude of EVERYONE involved. If we can get 10 percent of this level of afdi, energy and willingness to reinvent at our other stations, we'll truly revolutionize TV.
There were quite a few nitpiks that I'll review today with the group, but overall, they are soooo local and soooo refreshingly and NOTICEABLY different from EVERYone else.
The other stations look disconnected, TOO professional and slick and "nationalized" in comparison, and I think this show is on track to hit its psychographic head on. Watched the competition and it was hilariously dated—Stiff, evil looking Ivory Tower news people wearing 1987 Reagan era suits, taking “news speak” with blue and silver everywhere. As organic and real as a chunk of linoleum. The CONTENT was generally fine, but undermined by a dated-playbook presentation.

They know their place on the intellectual/culture scale---and nail it well.

One BIG challenge is going to be to get the other 20 hours of sfl to match the magic of the morning show. 24/7/365

There's of course a lot for them to do but I can tell we have the makings of a winner that can be influential at our other stations. This show is SO south Florida, you can't simply recreate it, but it CAN serve as a model of breaking away, blowing up the playbook, creating a wonderful internal vibe (more like a killer radio station in 1975 than a TV station), and afdi.

I'm impressed and excited about where this can go. In a year...look out!

There are so many things they're doing right--the breezy way they refer to YouTube and facebook (vs "tech minute") to the set (love the retro photos and the painting of the city instead of a fake backdrop).
A work in progress of course, and not perfect, but they got the mojo going.
Now, just gotta make sure this sprit happens 24/7....and the whole station sings with new image innovation!
ZERO TV baggage…and it shows. Traditionalists will laugh…kinda like the old farts at BMG laughed at the audacity of “digital music”.

…The teamwork in Chicago, the spirit of reinvention in South Florida...Just two of the things that will define the Tribune Company, and in time the whole Media Industry.

*Editor's Note: I deleted a few lines from the Abrams' memo that offered password access to an online photo gallery.

Email from Cortney Fielding

Friends-

Sadly, the rumors are true. I was recently caught by janitorial staff attempting to stuff the Daily Journal’s prize decorative otter into a burlap sack with plans to set him free in some other, unsuspecting newsroom. I couldn’t take the way he was silently mocking me, day after day, as I walked from the atrium to my cube. Thankfully, the good people here at the DJ said there was no need to bring the authorities into this, but I think I better make a break for it just the same.

Seriously, leaving was a tough decision. I’ve loved working with everyone here and really enjoy covering LA courts, but curiosity has gotten the better of me. I want to see what, if anything, I can accomplish out on my own and maybe catch my breath a little while figuring out what I want to do next in this business.

Granted, this is something I probably couldn’t do if I hadn’t had the foresight to marry a man who would one day collect a stable paycheck from a boring old insurance company, so props go to me for that.

I got into journalism because I enjoyed storytelling and lacked the imagination necessary to make stories up myself. Why bother when there is already so much great material ripe for the picking? I plan on continuing to tell other people’s stories. I’ve gotten a few cool freelance gigs to get me started, and I’m working on some bigger projects I’ll tell everyone about after they are more certain-so I don’t look like a total loser if they fall through.

But, if by the end of the year, I’m calling you as a PR person trying to pitch a story about an amazing law firm’s ground-breaking swine-flu practice, I guess we will know this was a very,very bad idea.

Your co-worker and friend,

Cortney

Freedom of Speech

A fundamental right so easy to applaud, so very difficult to protect

By Richard McKee

The freedom to express yourself in a public forum, without fear of government censorship, is protected by the First Amendment: “Congress shall make no law ... abridging the freedom of speech.” The Fourteenth Amendment extends this prohibition to the states as well.

As the U.S. Supreme Court has opined, “[A]bove all else, the First Amendment means that government has no power to restrict expression because of its message, its ideas, its subject matter, or its content.” (Police Department of Chicago v. Mosley (1972) 408 U.S. 92, 95.)

Even when the government creates a public forum for a particular purpose, “Once it has opened a limited forum, however, the State must respect the lawful boundaries it has itself set. The State may not exclude speech where its distinction is not "reasonable in light of the purpose served by the forum” . . . nor may it discriminate against speech on the basis of its viewpoint.” (Rosenberger v. Rector and Visitors of the University of Virginia (1995) 515 U.S. 819, 829.)

Nevertheless, today, government asserts that its own right to speech should trump the free speech rights of individuals. And surprisingly, the courts have agreed. (see Morse v. Frederick (2007) 127 S.Ct. 2618.)

A perfect example was found recently in California’s Orange Unified School District. Within its seven-member Board of Education was a dissident trustee, an oddball with conspiracy theories named Steve Rocco. But he was for openness, for the public being involved in every discussion, and as such he refused to attend the Board’s closed sessions.

At the end of one board meeting, after Rocco had learned that the superintendent had used a closed session to tell the board the he had reassigned a high school principal to a nonexistent position, Rocco told the audience that he would have fired the principal, who had received a great deal of public criticism at an earlier meeting, rather than have the public continue to pay him an administrator’s salary.

In response, the superintendent decided to remove Rocco’s comments from a video of the meeting that was distributed to local broadcast outlets for airing to the public. The video provided no notice that the meeting had been edited.

At the next meeting, a majority of the school board expressed its outrage at Rocco’s earlier comments, saying he had defamed the principal and violated both the Brown Act (the state’s open meeting law) and the principal's right to privacy under the California Constitution.

Of course, these were bogus assertions. Rocco’s comments were made during the board meeting, where his criticism of the principal’s performance and the superintendent’s decision are completely protected.

The board then censured Rocco for his negative comments. The board president told Rocco that the “disciplinary action” should be interpreted to mean: “Do not do it again in the future.”

Supported by Californians Aware, an open-government advocacy group, Rocco sued both the board and superintendent. He claimed that he had a right to address district issues at a public meeting and, as an elected official, had a duty to keep the public informed. He told the court that the school district had illegally interfered with his ability to communicate with his constituents: by censoring his comments from the meeting tape; by violating the Brown Act’s prohibition against board action to discourage his criticism; and by violating California’s constitutional protection affording public access to information about district business.

The courts ignored the Brown Act and the Constitution, instead ruling that Rocco’s lawsuit had interfered with the board’s First Amendment right to speak its mind by censuring him, as well as its right to control its own speech by editing the meeting video in any way it wanted. Finally, the court ordered Rocco and his co-plaintiffs to pay the district’s attorney fees, which amounted to about $80,000.

In essence, the court said a government agency can cut out any information from its publications that might cast its decisions in a bad light, and the agency can take any action it wants to discourage elected officials from criticizing administrative decisions.

America’s republican form of government – of, by, and for the people – presupposes that the public will be kept informed as to the issues its government faces and retains the right to instruct their representatives as to the best course of action.

When the courts endorse the government’s right to limit or control the information it provides to the public, they allow the government to control the outcome of decision-making (i.e., Iraq has weapons of mass destruction).

Justice Oliver Wendell Holmes first described the rational for protections meant to ensure an open marketplace of ideas: “The best test of truth is the power of the thought to get itself accepted in the competition of the market, and that truth is the only ground upon which [people’s] wishes safely can be carried out.” (Abrams v. United States (1919) 250 U.S. 616, dissenting opinion.)

By its opinion in Californians Aware v. Orange Unified School District, G038499 (Cal.App. 9/4/2008), the Fourth District Court of Appeals authorized school boards to distribute to the public: state test score summaries absent scores from under-performing schools, tapes of board meetings with all of the negative public comments deleted, and financial reports with evidence of any fraud removed.

The concern here is historically simple. Those holding power don’t always have our best interests at heart; and power is protected by controlling what information is released.

In a public forum, government speech should never trump individual speech rights. And government speech must never include the selective release of information meant to mislead the public.

The California Legislature should move quickly to enact new law that condemns the courts for ignoring the people’s constitutional right to an open government and freedom of expression, ensures the opinions of elected officials may not be abridged nor discouraged and keeps government from distorting information to gain approval from the people.

In formulating educated opinions on how its government should act, the people’s right to an open marketplace of ideas must be preserved.

-30-

Memo from Robert Decherd

April 2, 2009

Dear Colleagues:

Since I last communicated with you in late January, the challenges A. H. Belo and our industry are facing have intensified – reflecting one of the most trying advertising environments our industry has ever encountered. We have made significant progress implementing the cost reduction initiatives I described in my January 30 letter, and the Company-wide reduction in force is nearing completion. Identifying additional opportunities to manage cash remains our first priority, and we are making salary changes similar to those recently announced by many of our peer newspaper companies.

On Tuesday, the Board of Directors approved my recommendation to reduce my base salary by 20 percent and the base salaries of other Management Committee members by 15 percent, effective immediately. In addition, all full-time employees making more than $25,000 per year will have reductions in base salary as follows:

$25,000 and under 0
$25,001 - $74,999 2.5 %
$75,000 - $102,499 5.0 %
$102,500 - $149,999 7.5 %
$150,000 - $225,000 10 %
Over $225,000 15 %

These changes will be effective starting in the payroll cycles on or near May 1. The annual savings represented by these reductions exceed $10 million. We will ask employees who are covered by collective bargaining agreements to voluntarily lower their salaries by the levels described above.

If you are notified prior to June 30, 2009 that you will be impacted by the reduction in force currently underway, your severance will be calculated at your current base salary as of today’s date.

Our hope is to restore most or all of these cuts for impacted employees at some time in the future, as business conditions permit. To cushion the impact of the wage cuts, all impacted employees will receive three additional personal days per calendar year, effective at the time of the salary reductions.

For participants in the G. B. Dealey Retirement Pension Plan, the Company intends to fund the Pension Transition Supplement Plan (PTS) contribution for 2008 no later than October 15, 2009. The PTS Plan contribution will be suspended for 2009. The funding for the calendar year 2009 contribution that would normally be made in 2010 will not be made, preserving approximately $6 million in cash next year. A detailed explanation of the PTS Plan changes will be mailed to all participants within the next week.

These decisions are not taken lightly and all are made with a focus toward maintaining A. H. Belo’s ability to be the leading provider of local news, information and advertising in the markets it serves. The cost-reduction initiatives we have implemented have real consequences and everyone is affected in some way. As conditions improve – which they inevitably will – we expect to look back at these steps as being painful but necessary for the long-term prosperity of our great Company. What we do everyday is special. I thank you for the sacrifices and ongoing contributions all of you are making every day. You are being asked to do much at a time when our audiences and advertisers are looking to us to help make sense of an environment that is challenging individuals and organizations well beyond our own.

I will communicate with you again soon.

Robert Decherd
Chairman of the Board
President
Chief Executive Officer

Memo from 21st Century (a division of AIG)

Dear 21st Century Insurance Policyholders:

On behalf of all the employees of 21st Century Insurance and Financial Services (21st Century Insurance), I first want to thank you for your continued loyalty and support during these challenging times.

I would like to take a moment to address some items that have undoubtedly created a level of uneasiness and frustration for many of our customers. Because of the tremendous support and cooperation from the United States government and its taxpayers, our parent company, AIG, has been able to continue its operations as a world-class provider of insurance services. However, with this support comes a high-level of attention to all of AIG's activities.

It is important to clarify that although the insurance companies affiliated with the 21st Century Insurance brand are subsidiaries of AIG, they have not accessed or needed any of the Federal Reserve borrowings to fund their operations. Nor have they received any capital contribution from any AIG company to support their operations. 21st Century Insurance is an organization of 6,500 employees whose mission is to deliver outstanding value and service for your auto insurance needs - a mission we are striving to achieve every day.

The insurance companies affiliated with 21st Century Insurance, which underwrite and provide coverage under your policies, are financially strong and continue to deliver outstanding coverage, service and payment of claims to all of our customers. The assets of the insurance companies are protected by state laws for the benefit of policyholders.

Additionally, AIG recently announced the formation of a general insurance holding company called AIU Holdings, Inc. This move will help enhance and protect the value of those property and casualty companies for all its stakeholders. The organization will include the Commercial Insurance Group, Foreign General unit, and other property and casualty groups. 21st Century Insurance will also be part of this new, separate organization.

We genuinely appreciate your business. At 21st Century Insurance, we are focused on putting you, the customer, first, and we look forward to providing you with the great coverage and award-winning service that you deserve.

Sincerely,
Anthony J. DeSantis

Memo from Craig Dubow

Dear Co-workers:

We are about to begin the second quarter without any real relief in sight from this unprecedented economic downturn and its challenge to our company. Despite all of your truly remarkable efforts to reverse the trend, our revenue numbers continue their downward slide and we have been faced with more difficult decisions.

One of those choices was between more layoffs or another round of furloughs. We chose, for most employees, a furlough program consisting of at least one week of unpaid leave to be taken in April, May or June.

The program will differ from the first quarter’s in a couple of important ways:

• The length of the furlough for employees will vary somewhat by division or location, depending on the division’s operating needs and results.
• Our higher salaried employees will be asked to make an additional sacrifice. This could be a second furlough week or a week’s furlough plus a temporary salary reduction equivalent to one week’s pay for the quarter, depending on the division and/or location.
• Some hourly employees will not be required to take a full week. Each division or location will have different requirements for employees in this category.

Because of the variations, your division head will be the main source of information about your particular program. Memos will be going out shortly to each of you with specific details.
Corporate employees will be participating, as with the first quarter’s program, including all of our company officers and me. Corporate’s memo will come from Gracia.

There will be some exemptions, similar to the first quarter’s program. For instance, some locations that recently have had, or are in the midst of, layoffs or significant salary reductions will be exempt. Represented employees again will be asked to participate in lieu of layoffs.

As with our first program, we are doing furloughs to hopefully mitigate the need for layoffs and to preserve our operations in the face of these extraordinary economic times. We believe this is the best possible course, given the alternatives.

We also need to keep innovating, selling ads and reaching out to audiences to prepare for the return of the economy. When that happens, I believe we will be well prepared to move quickly and take advantage of the new opportunities.

Again, I must thank you all for your hard work, loyalty and dedication. I am truly looking forward to the day I can send an email that congratulates you on getting us through these hard times. That day isn’t here yet, but I believe it will be. So we must continue to do whatever we can to keep Gannett strong and prepare for the future.

Sincerely,
Craig