http://www.mahablog.com/2008/12/08/newspaper-crisis/
December 8, 2008
Newspaper Crisis
The Chicago Tribune Company may file for bankruptcy, and the New York Times Company plans to borrow against its new West Side corporate headquarters to meet a cash shortfall. (Full disclosure — as a writer for About.com I work on contract for the New York Times Company, and I’ve been in the corporate headquarters a few times. Lovely building.)
Naturally, some are rejoicing in the downfall of the evil MainStreamMedia, or MSM. Little Lulu got the brilliant idea that some wealthy right-wingers ought to snap up newspapers while they are going cheap and replace the staffs with right-wing ideologues, effectively turning the nation’s newspapers into propaganda rags for the Right. Which is what they’ve pretty much been for the past several years, anyway, but the Right will not rest until they control all information being received by the American public.
Some right-of-center investors attempted to establish a right-wing challenge to the New York Times (like we don’t already have the Post?) called the New York Sun. The Sun bombed spectacularly and finally stopped publishing earlier this year, but not before losing its deep-pocket investors a ton of money. Scott Sherman wrote in April 2007,
"Although it is funded by a coterie of wealthy individuals, published on a shoestring and edited by a tenacious journalist, Seth Lipsky, the paper is not a financial success: Last year Lipsky told journalism students at Columbia that the Sun lost $1 million a month. But those losses amount to pocket change for the proprietors, whose investment and ongoing commitment have yielded something else: a broadsheet that injects conservative ideology into the country’s most influential philanthropic, intellectual and media hub; a paper whose day-to-day coverage of New York City emphasizes lower taxes, school vouchers and free-market solutions to urban problems; a paper whose elegant culture pages hold their own against the Times in quality and sophistication; a paper that breaks news and crusades on a single issue; a paper that functions as a journalistic SWAT team against individuals and institutions seen as hostile to Israel and Jews; and a paper that unapologetically displays the scalps of its victims."
They lost $1 million a month? I feel so bad. Snark.
The Rev. Sun Myung Moon’s pockets must be a lot deeper than those of the Sun’s investors, because he’s keeping the Washington Times afloat in spite of the fact that it has lost money every year since its launch in 1982. However, even Moon had to scale back a bit and let go of some staffers earlier this year. Times are hard.
I’m not a regular reader of the Tribune and cannot comment on its quality. The Times, which I do read, has much room for improvement in its journalistic standards. Plus, the entire business model on which newspapers rested is eroding away; people just don’t sit and read newspapers any more. However, I think with imaginative and forward-thinking management, the NY Times could evolve into a great news provider for the 21st century. We’ll see what happens.
However, I don’t see propaganda rags turning a profit, ever. I don’t think there are pockets deep enough to carry out Lulu’s plans.
Full Version: Newspaper Crisis
More newspaper woes........
http://www.powerlineblog.com/archives/2008/12/022257.php
Twilight of the newspapers (Minnesota edition)
December 9, 2008 Posted by Scott at 5:39 AM
This past spring we noted the New York Post story that the Star Tribune was on the verge of bankruptcy. Star Tribune publisher and chairman Chris Harte denied that report, but acknowledged that management had retained the Blackstone Group to restructure the Star Tribune's balance sheet.
Avista Partners purchased the Star Tribune for $530 million only two years ago. The purchase price represented a 50 percent markdown over the price paid for the paper by McClatchy Co. eight years earlier. Since Avista purchased the paper in 2006, it has continued to shed readers and advertisers.
David Brauer has reported on the continuing deterioration in the Star Tribune's financial condition here (including the text of Chris Harte's most recent memo to Star Tribune employees) and here. Brauer's reportage appears to me to confirm the substance of the New York Post's story. If I understand Brauer's reports correctly, the Star Tribune has avoided bankruptcy so far through the forebearance of creditors.
The Star Tribune is shackled with union contracts that prevent it from taking actions that would be in the best interest of the newspaper both financially and journalistically. Moreover, the paper relentlessly editorializes in favor of forces that undermine its economic viability. One can't help but wonder whether killing the paper's editorials and like-minded columns might win back some subscribers and improve the paper's prospects.
In today's paper, for example, metro columnist Nick Coleman addresses Minnesota's prospective budget deficit. Coleman berates Governor Pawlenty as a prisoner to the "deceitful" no new tax "cult" that has supposedly cut income taxes for the wealthy while raising fees and property taxes on everyone else.
In this world the time is always ripe to raise taxes, and the wealthy somehow escape paying fees or property taxes or their fair share of income taxes. Coleman criticizes Pawlenty's opposition to a federal bailout of the states on the ground that Minnesota contributes more in federal taxes than it receives from the federal government. He implies that that's a bad thing.
Unfortunately. Coleman doesn't stay on the thought long enough to explore it. In a column that might have taken 15 minutes to write, Coleman forgets to reitertate his charge that Pawlenty's opposition to higher taxes was also responsible for the collapse of the 35W bridge. Surely the time has come for Coleman to turn his financial acumen to salvaging the Star Tribune..
http://www.powerlineblog.com/archives/2008/12/022257.php
Twilight of the newspapers (Minnesota edition)
December 9, 2008 Posted by Scott at 5:39 AM
This past spring we noted the New York Post story that the Star Tribune was on the verge of bankruptcy. Star Tribune publisher and chairman Chris Harte denied that report, but acknowledged that management had retained the Blackstone Group to restructure the Star Tribune's balance sheet.
Avista Partners purchased the Star Tribune for $530 million only two years ago. The purchase price represented a 50 percent markdown over the price paid for the paper by McClatchy Co. eight years earlier. Since Avista purchased the paper in 2006, it has continued to shed readers and advertisers.
David Brauer has reported on the continuing deterioration in the Star Tribune's financial condition here (including the text of Chris Harte's most recent memo to Star Tribune employees) and here. Brauer's reportage appears to me to confirm the substance of the New York Post's story. If I understand Brauer's reports correctly, the Star Tribune has avoided bankruptcy so far through the forebearance of creditors.
The Star Tribune is shackled with union contracts that prevent it from taking actions that would be in the best interest of the newspaper both financially and journalistically. Moreover, the paper relentlessly editorializes in favor of forces that undermine its economic viability. One can't help but wonder whether killing the paper's editorials and like-minded columns might win back some subscribers and improve the paper's prospects.
In today's paper, for example, metro columnist Nick Coleman addresses Minnesota's prospective budget deficit. Coleman berates Governor Pawlenty as a prisoner to the "deceitful" no new tax "cult" that has supposedly cut income taxes for the wealthy while raising fees and property taxes on everyone else.
In this world the time is always ripe to raise taxes, and the wealthy somehow escape paying fees or property taxes or their fair share of income taxes. Coleman criticizes Pawlenty's opposition to a federal bailout of the states on the ground that Minnesota contributes more in federal taxes than it receives from the federal government. He implies that that's a bad thing.
Unfortunately. Coleman doesn't stay on the thought long enough to explore it. In a column that might have taken 15 minutes to write, Coleman forgets to reitertate his charge that Pawlenty's opposition to higher taxes was also responsible for the collapse of the 35W bridge. Surely the time has come for Coleman to turn his financial acumen to salvaging the Star Tribune..
This is just the start. Expect newspapers to begin shutting down this year. Several mid-market papers in New England, in particular, may be among the first to go, along with the Rocky Mountain News. People aren't going to realize how much they miss papers until they are gone.
A sign of how bad things are in the industry: The Austin paper is up for sale, and so far, no interest. If that paper won't sell, no paper is likely to. Austin is an absolutely dream market.
A sign of how bad things are in the industry: The Austin paper is up for sale, and so far, no interest. If that paper won't sell, no paper is likely to. Austin is an absolutely dream market.
BTW, these two blog items seem to imply that politics has a significant role in the demise of the newspaper industry. It does not.
It's a combination of corporate ownership with profitability driven by stock prices; lost ad revenue and rising expenses; and the Internet. Then add in the current economic hard times, and we could be reaching the point of no return for a growing number of papers.
I tend to think that large-market papers, for the most part, very small papers and family-owned papers will survive. But midsized, corporate-owned papers are in big trouble.
It's a combination of corporate ownership with profitability driven by stock prices; lost ad revenue and rising expenses; and the Internet. Then add in the current economic hard times, and we could be reaching the point of no return for a growing number of papers.
I tend to think that large-market papers, for the most part, very small papers and family-owned papers will survive. But midsized, corporate-owned papers are in big trouble.
It's an interesting phenomena. For instance, I heard through the grapevine that one of Detroit's dailies may suspend home deliveries because the bulk of its sales are at newsstands. I also have read that circulation for the Boston Globe is down dramatically and the Boston Herald's is down even more.
No matter how much I read online, there's still no equivalent to being able to touch, feel and read a 'real' newspaper. The loss of local papers would be the most poignant. The community in general would really suffer with that absence.
No matter how much I read online, there's still no equivalent to being able to touch, feel and read a 'real' newspaper. The loss of local papers would be the most poignant. The community in general would really suffer with that absence.
If newspapers fold, people won't have their websites to read, either.
I think many papers would go to Internet only, except they have not been able to figure out a way to make adequate revenue on the Net.
Oh, BTW, I said to expect papers to begin shutting down this year. I meant in 2009, of course.
I think many papers would go to Internet only, except they have not been able to figure out a way to make adequate revenue on the Net.
Oh, BTW, I said to expect papers to begin shutting down this year. I meant in 2009, of course.
QUOTE(canjcat @ Dec 10 2008, 06:12 PM) 
No matter how much I read online, there's still no equivalent to being able to touch, feel and read a 'real' newspaper. The loss of local papers would be the most poignant. The community in general would really suffer with that absence.
Family-owned papers are doing better, I think, because the demands for higher and higher profits aren't there. They are content to make a modest profit without the market need for rising profits every quarter. I really think that newspapers should also be considered a community institution, and should not be subject to the same profitability demands of, say, the local fast-food restaurant.
There are some things that newspapers do that will be very hard to replicate in an organized fashion in a community that loses one -- such as obituaries, local government coverage, local crime stories, local society and arts coverage, etc.
QUOTE(dggfwtx @ Dec 10 2008, 05:00 PM)
BTW, these two blog items seem to imply that politics has a significant role in the demise of the newspaper industry. It does not.
It's a combination of corporate ownership with profitability driven by stock prices; lost ad revenue and rising expenses; and the Internet. Then add in the current economic hard times, and we could be reaching the point of no return for a growing number of papers.
I tend to think that large-market papers, for the most part, very small papers and family-owned papers will survive. But midsized, corporate-owned papers are in big trouble.
It's a combination of corporate ownership with profitability driven by stock prices; lost ad revenue and rising expenses; and the Internet. Then add in the current economic hard times, and we could be reaching the point of no return for a growing number of papers.
I tend to think that large-market papers, for the most part, very small papers and family-owned papers will survive. But midsized, corporate-owned papers are in big trouble.
Mostly lost ad revenue, expenses and the internet, not necessarily in that order.
QUOTE(dggfwtx @ Dec 10 2008, 05:27 PM)
If newspapers fold, people won't have their websites to read, either.
I think many papers would go to Internet only, except they have not been able to figure out a way to make adequate revenue on the Net.
Oh, BTW, I said to expect papers to begin shutting down this year. I meant in 2009, of course.
I think many papers would go to Internet only, except they have not been able to figure out a way to make adequate revenue on the Net.
Oh, BTW, I said to expect papers to begin shutting down this year. I meant in 2009, of course.
Yes, figuring out how to make enough revenue on the net is the primary issue.
QUOTE(dggfwtx @ Dec 10 2008, 08:58 PM)
QUOTE(canjcat @ Dec 10 2008, 06:12 PM)
No matter how much I read online, there's still no equivalent to being able to touch, feel and read a 'real' newspaper. The loss of local papers would be the most poignant. The community in general would really suffer with that absence.
Family-owned papers are doing better, I think, because the demands for higher and higher profits aren't there. They are content to make a modest profit without the market need for rising profits every quarter. I really think that newspapers should also be considered a community institution, and should not be subject to the same profitability demands of, say, the local fast-food restaurant.
There are some things that newspapers do that will be very hard to replicate in an organized fashion in a community that loses one -- such as obituaries, local government coverage, local crime stories, local society and arts coverage, etc.
Don't be so sure family owned papers are doing better, less disclosure and less transparency, my understanding is they aren't faring any better but the public can't see the losses being covered.
QUOTE(tomhye @ Dec 10 2008, 10:54 PM)
Don't be so sure family owned papers are doing better, less disclosure and less transparency, my understanding is they aren't faring any better but the public can't see the losses being covered.
They may not be doing better, but they also aren't under as much immediate pressure. The large corporate chains are bleeding jobs and putting papers up for sale (no buyers). There are going to be papers being shut down, and it isn't going to be long before it happens. BTW, a lot of papers are still making a profit -- it's just less of a profit. The family-owned papers that are in this category should be around for a while. The big chains are burdened by debt loads.
I consider the Internet to be more the final straw for the business rather than the primary cause of the business's problems. Its biggest effect has been on classified ads, to a much lesser extent circulation.
http://www.detnews.com/apps/pbcs.dll/artic...D=2008812160427
Tuesday, December 16, 2008
Struggling newspaper industry at a crossroads
Nathan Hurst / The Detroit News
As the nation's economy continues to sour, newspaper publishing, an industry that has been under pressure for years amid the rise of alternative news sources, is at a precarious crossroads.
Its core business model is proving less able than ever to support expensive newsrooms and far-flung delivery systems in an era of nonstop, on-demand news distributed on television and the Internet, leaving publishers across the country scrambling to cut back and reinvent themselves.
But even while newspaper circulations plummet, demand for news in the 24-hour nonstop cycle of global events has never been higher, driving more readers to newspaper Web sites.
"The riddle here, the big conundrum, is that newspapers have never had more readers than they have now," said Lou Ureneck, an industry observer and chair of Boston University's journalism department. "If you combined the people reading news content on the Web with those still getting the paper, there's never been more."
But while readership is up, the main revenue stream that's made big newsgathering operations possible for decades -- print advertising -- is evaporating. Internet-based advertising, while growing for newspaper companies across the nation, still doesn't pay the bills for publishers; competition from larger companies that dominate the Web such as Yahoo and Google keep online advertising cheap.
And while online services can easily pick up news stories from myriad sources online -- including newspapers -- the slim online profits aren't enough to support the kind of sophisticated, well-staffed newsgathering operation that makes a newspaper successful.
Newspaper advertising remains lucrative, but publishers are finding fewer advertisers who want the broad reach of a regional publication, focusing instead on less expensive more highly targeted online ad campaigns.
Those trends are leading many publishing companies to take drastic steps to remain profitable -- and in some cases, solvent -- even as the nation's recent economic decline adds more pressure. The fallout among some of the country's largest newspaper companies this year has been painful:
• Tribune Co., owner of the namesake Chicago Tribune and The Los Angeles Times, earlier this month filed for Chapter 11 bankruptcy protection. The company, which underwent a complex and expensive restructuring into private ownership last year, is saddled with debt totaling more than $13 billion. Earlier this year, it sold the Newsday daily newspaper of Long Island, N.Y., to a cable television operator, which promptly cut staff.
• Gannett Co. Inc., owner of the Detroit Free Press and controlling partner of the Detroit Media Partnership, which manages business functions for the Free Press and The Detroit News, has slashed employment at its newspaper properties across the country by 10 percent -- totaling thousands of jobs. With revenue continuing to decline, Gannett executives have warned of more cuts and layoffs.
• MediaNews Group, the Denver-based parent of The Detroit News, had its debt rating cut by Moody's Investors Service earlier this month on concerns the company's advertising downturn will continue.
• The New York Times Co. is borrowing $225 million against recently-constructed headquarters in Manhattan to ensure it will be able to make its debt payments next year. Revenue declines at some of its properties, including The Boston Globe, New England's largest daily newspaper, have reached double-digit percentages this year, despite new offerings for advertisers both in print and online.
• Journal Register Co., owner of dozens of smaller community newspapers throughout Michigan, has downsized staffs and slashed newsroom budgets at a number of properties throughout the country, as it teeters under a monumental debt load. Earlier this year, its stock price fell below $1 and the company was banned from trading on the New York Stock Exchange.
• Booth Newspapers, a Grand Rapids-based chain that includes the Ann Arbor News, Flint Journal and Grand Rapids Press, announced a major restructuring program in November aimed at consolidating and eliminating many positions throughout the company's newsrooms across the state.
Besides reducing staff sizes, newspaper companies have tried to combat losses caused by declining circulation and ad sales by shrinking the physical size of their publications, shifting newsrooms to focus on Web publishing and new media newsgathering.
But making money online remains elusive.
Online revenues -- while still growing at a steady clip -- have failed to make up for the loss in print, while readers have grown accustomed to getting news online for free.
Stephen Lacy, a professor of journalism at Michigan State University, said making any new business model work is not without risk.
"How about I tell you the cure for cancer?" Lacy quipped during a recent interview. "It might be easier."
Uncertainty amongst industry insiders, however, isn't stopping newspaper publishers from trying to thrive in an online world.
The Boston-based Christian Science Monitor, one of the nation's most well-respected bastions of international reportage, announced earlier this year that it would cease printing its five-days-a-week newspaper, opting instead for a significantly boosted Web presence and accompanying weekly print edition.
Others have tried diversifying their businesses. The New York Times Co., for example, has invested in Web destination About.com, while other big publishers have tried partnering with job-search and home sales sites -- which helped quickly deplete once-profitable classified advertising -- in an attempt to gain revenue.
Still others are hoping alternative ownership models that demand smaller profit margins than Wall Street investors will work. Former journalists for corporate entities have started nonprofits such as the Voice of San Diego and ProPublica that aim to produce high-quality reporting without the need for big profits. There hasn't yet been any major attempt at creating such a model for larger, already established big city newspapers.
Experts say the retrenching of newspaper publishing companies, however it ends up being done, couldn't come quickly enough.
"These companies are hoping they can move fast enough," said Jane Briggs-Bunting, head of Michigan State University's journalism program, one of the country's largest.
Briggs-Bunting says any big gambles by newspapers that don't work out in such a moribund economy could be fatal, and not just for the companies.
"You can't neuter and defame the watchdog," she said, referring to the newspaper's role in a democracy. "Everyone should start to pray."
You can reach Nathan Hurst at (313) 222-2293 or nhurst@detnews.com.
Tuesday, December 16, 2008
Struggling newspaper industry at a crossroads
Nathan Hurst / The Detroit News
As the nation's economy continues to sour, newspaper publishing, an industry that has been under pressure for years amid the rise of alternative news sources, is at a precarious crossroads.
Its core business model is proving less able than ever to support expensive newsrooms and far-flung delivery systems in an era of nonstop, on-demand news distributed on television and the Internet, leaving publishers across the country scrambling to cut back and reinvent themselves.
But even while newspaper circulations plummet, demand for news in the 24-hour nonstop cycle of global events has never been higher, driving more readers to newspaper Web sites.
"The riddle here, the big conundrum, is that newspapers have never had more readers than they have now," said Lou Ureneck, an industry observer and chair of Boston University's journalism department. "If you combined the people reading news content on the Web with those still getting the paper, there's never been more."
But while readership is up, the main revenue stream that's made big newsgathering operations possible for decades -- print advertising -- is evaporating. Internet-based advertising, while growing for newspaper companies across the nation, still doesn't pay the bills for publishers; competition from larger companies that dominate the Web such as Yahoo and Google keep online advertising cheap.
And while online services can easily pick up news stories from myriad sources online -- including newspapers -- the slim online profits aren't enough to support the kind of sophisticated, well-staffed newsgathering operation that makes a newspaper successful.
Newspaper advertising remains lucrative, but publishers are finding fewer advertisers who want the broad reach of a regional publication, focusing instead on less expensive more highly targeted online ad campaigns.
Those trends are leading many publishing companies to take drastic steps to remain profitable -- and in some cases, solvent -- even as the nation's recent economic decline adds more pressure. The fallout among some of the country's largest newspaper companies this year has been painful:
• Tribune Co., owner of the namesake Chicago Tribune and The Los Angeles Times, earlier this month filed for Chapter 11 bankruptcy protection. The company, which underwent a complex and expensive restructuring into private ownership last year, is saddled with debt totaling more than $13 billion. Earlier this year, it sold the Newsday daily newspaper of Long Island, N.Y., to a cable television operator, which promptly cut staff.
• Gannett Co. Inc., owner of the Detroit Free Press and controlling partner of the Detroit Media Partnership, which manages business functions for the Free Press and The Detroit News, has slashed employment at its newspaper properties across the country by 10 percent -- totaling thousands of jobs. With revenue continuing to decline, Gannett executives have warned of more cuts and layoffs.
• MediaNews Group, the Denver-based parent of The Detroit News, had its debt rating cut by Moody's Investors Service earlier this month on concerns the company's advertising downturn will continue.
• The New York Times Co. is borrowing $225 million against recently-constructed headquarters in Manhattan to ensure it will be able to make its debt payments next year. Revenue declines at some of its properties, including The Boston Globe, New England's largest daily newspaper, have reached double-digit percentages this year, despite new offerings for advertisers both in print and online.
• Journal Register Co., owner of dozens of smaller community newspapers throughout Michigan, has downsized staffs and slashed newsroom budgets at a number of properties throughout the country, as it teeters under a monumental debt load. Earlier this year, its stock price fell below $1 and the company was banned from trading on the New York Stock Exchange.
• Booth Newspapers, a Grand Rapids-based chain that includes the Ann Arbor News, Flint Journal and Grand Rapids Press, announced a major restructuring program in November aimed at consolidating and eliminating many positions throughout the company's newsrooms across the state.
Besides reducing staff sizes, newspaper companies have tried to combat losses caused by declining circulation and ad sales by shrinking the physical size of their publications, shifting newsrooms to focus on Web publishing and new media newsgathering.
But making money online remains elusive.
Online revenues -- while still growing at a steady clip -- have failed to make up for the loss in print, while readers have grown accustomed to getting news online for free.
Stephen Lacy, a professor of journalism at Michigan State University, said making any new business model work is not without risk.
"How about I tell you the cure for cancer?" Lacy quipped during a recent interview. "It might be easier."
Uncertainty amongst industry insiders, however, isn't stopping newspaper publishers from trying to thrive in an online world.
The Boston-based Christian Science Monitor, one of the nation's most well-respected bastions of international reportage, announced earlier this year that it would cease printing its five-days-a-week newspaper, opting instead for a significantly boosted Web presence and accompanying weekly print edition.
Others have tried diversifying their businesses. The New York Times Co., for example, has invested in Web destination About.com, while other big publishers have tried partnering with job-search and home sales sites -- which helped quickly deplete once-profitable classified advertising -- in an attempt to gain revenue.
Still others are hoping alternative ownership models that demand smaller profit margins than Wall Street investors will work. Former journalists for corporate entities have started nonprofits such as the Voice of San Diego and ProPublica that aim to produce high-quality reporting without the need for big profits. There hasn't yet been any major attempt at creating such a model for larger, already established big city newspapers.
Experts say the retrenching of newspaper publishing companies, however it ends up being done, couldn't come quickly enough.
"These companies are hoping they can move fast enough," said Jane Briggs-Bunting, head of Michigan State University's journalism program, one of the country's largest.
Briggs-Bunting says any big gambles by newspapers that don't work out in such a moribund economy could be fatal, and not just for the companies.
"You can't neuter and defame the watchdog," she said, referring to the newspaper's role in a democracy. "Everyone should start to pray."
You can reach Nathan Hurst at (313) 222-2293 or nhurst@detnews.com.
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