The men and women who continue to work in the newspaper business inhabit a surreal world. It’s as if they are organisms inside a body felled by a fatal disease, and all the doctors prescribe is more poison. Charge for individual articles on the web? That would just send people to the free stuff. Demand that Google compensate the newspapers for the links? Watch your stories disappear when they stop coming up in Google searches. Stop publishing a print edition? Lose what’s left of your only significant earnings base. Oh well–there’s always more room for deeper budget cuts, more section cuts, more buyouts, fewer editors, etc.
The absurdity of the current moment is best exemplified by the recent threat by the New York Times Company to shut down the Boston Globe within thirty days if the paper doesn’t find $20 million in immediate savings, including $10 million from its Newspaper Guild unit. While the guild did not reject the notion of concessions, neither did it give much indication that it appreciates the precariousness of its position. Its representatives insisted on a set of conditions that show little awareness on their part that their industry is in the process of evaporating before our eyes. Demands, for instance, that the paper institute a “revenue sharing” plan presuppose the existence of “revenue” in the future. But the Globe lost $50 million last year and is expected to lose $85 million this year. Between 2004 and 2010 revenue is projected to fall more than 40 percent, its pension plan is significantly underfunded and some of its members enjoy lifetime job guarantees. And yet the Times Company is demanding only $20 million in cuts? It strikes me that the guild is awfully lucky that the Times is willing to continue to subsidize so expensive an enterprise so generously. In fact, were I a Times Company shareholder, I’d be tempted to march into its annual meeting and ask, “Just what the hell kind of business is this, anyway?”
The meagerness of the cuts makes sense only if one believes that the downturn in the Globe‘s financial fortunes is temporary. Alas, you’d get better odds betting on the cryogenic regeneration of Ted Williams’s severed head. In fact, everything is getting worse, fast. At the end of 2008, print advertising sales had fallen by more than 25 percent industrywide in just three years. And guess what? The first quarter of 2009 is estimated to have been the worst one yet; a drop of 30 percent for many papers, with no end in sight. (Times Company ad revenue fell 27 percent during the quarter, leading to losses of approximately $75 million.) Even the growth in online advertising has recently reversed itself, leaving no imaginable lifeline.
Again, from a purely business standpoint, no one at the Globe is in a position to demand anything of the Times Company at all, so long as its only realistic plan is to continue to lose lots of money.
One can argue that newspapers are a “public trust” and that their owners are morally obliged to subsidize their communities by providing a service, as a philanthropic enterprise, destined to lose tens of millions–and possibly more than that–every year. But that’s not going to be a popular argument at a shareholders’ meeting. And if you argue that the Sulzbergers owe it, for historical and familial reasons, to the New York Times–well, maybe. But they sure don’t owe it to the Boston Globe.