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Crime SceneThe word from the Salinas Police Department is that the record number of homicides in the city last year was not  linked to any particular trend or even for the most part linked to gangs. The total topped 40 by the end of the year, easily bettering the previous record of 29 homicides, but police officials said they were at a loss to explain much of it.

Former Monterey Herald reporter Julia Reynolds, a true expert on Central Coast gangs, wrote in late December that the authorities felt this was not a sign of gangs out of control.

“… (I)n setting a new record, 2015 has been a year of outliers,” Reynolds wrote. “While gang rivalries and vendettas are likely responsible for more than half of this year’s homicides, a significant percentage of the violence appears to be the kind cities everywhere else deal with most of the time — the kinds of killings common everywhere but Salinas.

“These slayings stem from personal disputes, escalating arguments at parties or in the streets, quarrels that end with gunshots and sirens. They are family feuds and drug-dealing beefs that are settled by drawing a gun or pulling a knife. In rarer cases, they’re settled with a killer’s bare hands.”

I can’t prove it, but I think officials may have painted her a misleading picture. Since I can’t prove it, what I’m really saying is that I have a hunch, and that is that the rash of murders that continues into this year absolutely could be the result of gang violence of the worst kind. Based principally on the brief description of the crime that accompanies each news release about the latest murder, I suspect that Salinas gang members, Nortenos mostly, could be systematically executing young men that they suspect to be members of the rival Surenos – or that they are executing young men who happen to look like relatively recent immigrants who fit the profile of Sureno recruits. By my count, that would explain more than a dozen killings last year and several of the shootings, fatal and not, this year.

I’ve spoken to a couple of former gang members, not the most reliable of sources, and they agree with my thinking. One of them said he moved from Salinas to Greenfield because of the violence. But I also have talked to Salinas Police Chief Kelly McMillin about this a couple of times and he disputes my theory, though without the level of certitude that persuades me I’m wrong. He acknowledges that quite a few victims fit the profile that my theory encompasses but he says his detectives don’t believe a single explanation fits a large percentage of these cases.

The most recent homicide occurred Saturday night in the 1000 block of Atlantic Street. That’s in East Salinas, about a half block from Acosta Plaza, a housing project that has seen more than its share of gang violence. A 23-year-old man had been shot several times “by unknown persons” while walking on the sidewalk. Motive unknown, no known witnesses.

The circumstances were somewhat similar in at least four non-fatal shootings in the last 10 days. Young man shot by a young Latino man dressed all in black. Young couple shot by unknown man. Young man shot after being confronted by another young man who asked his gang affiliation.

Again and again last year the shooters in fatal and non-fatal attacks alike were described as young men dressed black, often wearing hoods. Sometimes one young man. Often two.

As Reynolds wrote, those could be the result of arguments at parties, of domestic disputes or neighborhood beefs, but in such cases, the police usually have a relatively easy time figuring out who pulled the trigger — and the shooter isn’t all that likely to be outfitted in black, with a hood.

Gang-related cases are much harder, for several reasons. Most obviously, there’s the fear factor. Victims and witnesses alike aren’t eager to put themselves in continuing conflict with gang bangers. Less obviously, victims of gang violence may suspect or believe it had to do with gangs but they’re not likely to be able to name names. Members of rival gangs don’t hang out together. And the type of victims being targeted, recent arrivals in Salinas, are even less likely to know the identities of their attackers.

Another factor adds to the challenge for detectives. Executions often are attempted from some distance, often from a passing car. That makes identifications even more difficult.

Maybe I’m wrong. There’s an excellent chance that I am. But if I’m right, I think it is time, past time, for the authorities to put out some meaningful alerts, to warn people who fit the profile that they may want to keep a very low profile for until things quiet down.

It is just as likely that I am being naïve, that the message has already been sent and received through informal channels and that there really isn’t anything more that can be done about this. That could be.

But here’s my hope. My hopes, actually. I hope I’m wrong, but if I’m right and there is some reason the authorities don’t want to cop to it, I hope they think it over and do the right thing

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Apollo Global Management boss Leon Black bought one version of Munch’s “The Scream” for $119 million, the most ever paid for an artwork at auction

After months of silence about the future of the Monterey Herald and 70 or so sister papers, some news has ascended out of the East. It isn’t the good kind. The trade papers are reporting that the frontrunner to buy the Digital First Media chain is the very large private equity firm Apollo Global Management.

If you are involved in high finance, you likely know about Apollo. It manages about $160 billion of investor and shareholder money and specializes in acquiring distressed businesses and extracting profits from them by whatever means necessary.

In other words, Apollo is similar to but larger than the company that now owns Digital First Media, Alden Global Capital. Apollo owns a long list of businesses you’re familiar with, including Coldwell Banker and Century 21 Real Estate, Caesars Palace, Norwegian Cruise Line and Carl’s Jr. In 2013 it bought a company with a strong local presence, McGraw-Hill Education.

That is not to say that Apollo is in the restaurant, real estate, gaming, cruise line and educational publishing businesses. It is in the business of buying companies, taking them in and out of bankruptcy, combining them with other companies, streamlining their management, laying people off, improving their short-term profit picture, and selling them off.

A piece in Forbes magazine last August had this to say:

“Apollo has been the hottest private equity player in recent years. Its biggest fund has delivered a net internal rate of return of 30%, it has raised the biggest new private equity fund the industry has seen in years, and its billionaire co-founders are buying professional basketball and hockey teams and famous pieces of art.”

Newspapers weren’t mentioned in the piece.

Apollo is headed by Leon Black, the former Drexel Burnham Lambert manager whose personal worth is estimated at $5.4 billion, according to Inside Philanthropy.

Three years ago, Black purchased one of four known versions of Munch’s “The Scream.” The $119 million price was said to be the highest price ever paid for a single artwork at auction.

Word is that Apollo is the only remaining bidder for the entirety of the Digital First network but that the deal has been delayed by complications involving DFM’s holdings in Texas. It is significant to note, however, that Digital First has numerous suitors for pieces of the pie, individual papers or regional clusters such as the Bay Area News Group, which operates the San Jose Mercury News, Contra Costa Times and other dailies ringing the bay.

The Herald and Digital First’s Santa Cruz Sentinel have been pursued by local investment groups headed by Geoff Dunn, a Santa Cruz entrepreneur and activist who had attempted to buy the Sentinel the last time it was in play. Others have attempted to make offers for the Mercury News alone, the Denver paper and other combinations.

Unfortunately for almost everyone except perhaps DFM and Apollo, DFM’s owners so far have opted not to entertain offers for any of the various parts. I say unfortunate because in many cases, the potential buyers consist of investors interested in saving or even restoring their local papers to what they once were.

The rumored price for all the papers works out to about $400 million, which could be less than what just the Mercury News and DFM’s Denver Post would have gone for 15 years ago. But while that price is low compared to what it once would have been, it is high enough to suggest that the new operator, if it is Apollo, will be devoted to grinding profits out of the papers rather than letting them hold onto enough cash to rebuild.

Leon-Black

Leon Black, patron of the arts, would-be media mogul

In the past 15 years, the Herald has gone from a daily circulation of well over 30,000 to a figure hovering around 14,000. The newsroom staff has dwindled from 50 to about 15. The Santa Cruz Sentinel has experienced a similar decline. (Do a Wikipedia search for the Herald and you’ll see a daily circulation figure of 23,862 and a Sunday figure of 58,001. Take this as additional proof that Wikipedia is not to be trusted. The Sunday figure has no relation to reality, past or present.)

The conventional wisdom is that the papers have downsized so dramatically because they are losing money. The fact is that most papers continue to make handsome profits – largely because they have cut content, staffing and other expenses so dramatically. In other words, the ownership has chosen to deliver a thinner and thinner product in order to maintain double-digit profit margins. In still other words, much of the decline of newspapers is self imposed. Investor groups interested in the individual properties believe or at least suspect that ownership with much more modest profit expectations could revitalize the operations, with much of the benefit accruing to the communities they serve.

The current owner, Alden, acquired the Herald and the rest of the Digital First papers in a series of steps that also involved bankruptcies and other elements of modern deal-making.

The Herald was founded by well-respected Col. Allen Griffin and started its route through a series of ownership changes in 1967. It was purchased first by Block Communications, which traded it to the E.W. Scripps chain in 1992. In 1997, it was traded again to Knight-Ridder, one of the most highly regarded newspaper groups in the country.

Knight-Ridder included the likes of the Mercury News, the Philadelphia Inquirer, the Miami Herald and other quality operations. For the most part, the Herald flourished.

The end of the empire came in 2006 after one of Knight Ridder’s largest shareholders complained publicly about inadequate returns, prompting company President Tony Ridder to put it all up for sale. In fairly quick order, the Herald went from being part of the Macy’s or Nordstrom of newspaper chain to the Kmart of chains, Dean Singleton’s MediaNews Group.

Singleton made his mark on the industry through cost-cutting and “clustering,” consolidating operations of newspapers on a regional basis. One staff plus a few small bureaus produces several newspapers, quite similar but each with its own name. As just one example, all the copy editing and layout of the Monterey and Santa Cruz papers plus eight or nine others takes place in Chico.

Singleton’s papers became Digital First Media papers in stages that included a management contract, a couple of bankruptcies and eventually a merger. Ownership fell into the hands of Alden Global Capital, a very low-profile operation based in New York. Alden also became a major investor in other groups, including the New York Times and McClatchy but its role and influence in the industry have attracted scant attention.

Under the leadership of John Paton, a Canadian newsman, DFM began this decade with a serious attempt to build the brand by pushing each of the newspapers in the string to seriously ramp up its online operation. Paton and those around him recognized that print newspapers are a dying breed and that the future of news distribution is online. The challenge was that digital advertising is far less lucrative than print advertising.

Paton and company made a strong run at it but committed at least one fatal error. They persuaded Alden Global Capital to make some investment in the product and to show some patience, but almost all of that investment went into creating something called Thunderdome. It was headquartered in New York and was tasked with creating and bundling national and international news and features to be used on the websites of each of newspapers.

At the local level, editors, me included, were desperate to increase the quantity and quality of local reportage but the resources for that were being routed to Thunderdome instead. Individual papers were even billed for the cost of keeping Thunderdome afloat.

The national content created by Thunderdome was good but not good enough to drive readers to the Chico Enterprise-Record website or to cause El Paso Times readers to cancel their New York Times subscriptions. Alden’s patience wore out just over a year ago and the current sale process was launched.

It is not certain that Apollo will be the buyer, nor is it certain that it would only be interested in the quick buck.

The fear, given its history and that of other companies specializing in “distressed properties” is that it will try to make money simply by cutting expenses and putting the papers on the market. The question is whether there is anything left to cut.

Royal Calkins was editor of the Monterey Herald until February 2014 when Digital First assigned Santa Cruz Sentinel Editor Don Miller to lead both papers. Calkins previously was city editor and opinion page editor at the Herald and has consulted with Dunn on the potential purchase. By the way, many of you are familiar with the Julia Reynolds’ byline. She has been one of the top Herald reporters for nearly a decade now, skillfully covering courts and gang violence along with investigative topics. She is taking a voluntary layoff and her last day is Friday.

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New labor contract reached at the Monterey Herald

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Herald Guild

Herald union activists celebrate after signing a new labor contract this week. From left, they are crime reporter Ana Ceballos, photographer David Royal, reporter Dennis Taylor, graphics editor/night editor James Herrera, sportswriter/editor Tommy Wright, business writer and Guild unit Chairman Phil Molnar, and reporters Julia Reynolds and Claudia Melendez Salinas. Union members at the Monterey Herald

Union members at the Monterey Herald announced Thursday that they had signed a new labor contract providing them with one extra paid holiday annually  a cap on health care costs and increased cell phone reimbursements but no raises.

Business writer and Newspaper Guild unit Chairman Phil Molnar said, “We would have liked a raise but we are glad to have finally reached an agreement after more than a year of hard work by Guild members.”

Thirty-eight Herald employees had signed a position asking Herald Publisher Gary Omernick to agree to the first increase in base pay in four years. During that period, employees were required to take unpaid weeklong furloughs. Union members had conducted a campaign that included rallies and participation in a national campaign urging Digital First Media to find new ownership for the Herald and other papers in the national chain.

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