Illustration: Sarah Grillo/Axios
Facing enormous financial pressure and uncertainty around reopenings, media companies are giving up on their years-long building leases for more permanent work-from-home structures. Others are letting employees work remotely for the foreseeable future.
Why it matters: Real estate is often the most expensive asset that media companies own. And for companies that don't own their space, it's often the biggest expense.
Driving the news: The Orlando Sentinel said Wednesday that it is officially leaving its downtown office building after 69 years.
- The newspaper's publisher and general manager blamed the pandemic on the vacancy, beginning Oct. 30, in an email to Sentinel employees.
Tribune Publishing also announced Wednesday that it has permanently closed its headquarters in Manhattan for its storied tabloid the Daily News.
- It's also closing the newsroom of the Capital Gazette in Annapolis, Maryland, which earned national attention in 2018 when a mass shooting occurred at its offices, killing five.
- Tribune Publishing is reportedly in talks with Sterling Bay, owner of Chicago's Prudential Plaza, for a buyout of its lease in the iconic building that houses The Chicago Tribune, per the Chicago Tribune.
- According to a regulatory filing cited by the Tribune, the company has terminated eight leases since March and hasn’t made rent payments at many of its other properties since then.
Condé Nast, home to Vogue, The New Yorker, Vanity Fair, GQ and others, may move from its headquarters at One World Trade Center, a spokesperson from its parent company, Advance Publications, confirmed to the New York Post.
- The company signed a 25-year lease beginning in 2014, but with the unknowns around the pandemic, it's reportedly looking to downsize from its 21-floor digs in downtown Manhattan.
The Miami Herald said in June that it, along with its sister paper El Nuevo Herald, would be moving out of its office building in Doral that the company occupied for seven years. For now, they say they'll work remotely through the end of the year before they find a new, centralized home.
Zoom out: While the financial burdens of owning real estate during a pandemic are great, there's also problems with the structure of many of newsrooms not being able to adequately accommodate social distancing.
- This is especially true given that most newsrooms have open-space layouts with shared desk space and few individual offices.
Yes, but: Abandoning a physical presence, especially at the local level, can create credibility issues down the line when a news company needs to lean on community ties to sell local advertising and broker community partnerships.
- "It creates a disconnect as to whether the company is actually engaged in the community," says Bill Day, vice president at Magid. "That's going to have an impact on sales people in town who are trying to sell an authentic connection to local people. That's hard to do without a physical location."
Be smart: "The idea of not having physical location is not just challenging from a cultural standpoint, but also from a and workflow and logistics standpoint," says Jaime Spencer, executive vice president and head of local media at Magid.
Spencer notes that physical spaces like newsrooms, that are designed for collaboration, are helpful for journalists to ideate and collaborate.
- While many journalists, especially at newspapers, don't need to work in a newsroom to get the job done, a recent Magid survey finds that most newspapers employees would still like to eventually go back to having the option to work in a newsroom and engage with their colleagues.
The bottom line: Many of the newsrooms being vacated have historic value and have come to represent the foundation of democracy in America.
- "Newspapers have owned very prominent pieces of real estate for long time," Spencer says. "Sometimes, they're the crown jewels of skyline. What does it say from a branding perspective when you don't have that anymore?"
Editor's note: This story has been corrected to reflect that the Capital Gazette shooting occurred in 2018 (not 2015).