Crises like that of the Herald Tribune a half-century ago are now the norm rather than the exception. The newspaper industry is in trouble. Big trouble. In 1950 newspapers in the United States had a weekday circulation of 54 million. The circulation figures are roughly the same today, but the number of households has more than doubled. The Los Angeles Times's daily circulation was down 8 percent in a single six-month period in 2006, while the Philadelphia Inquirer was down 7.5 percent, the Boston Globe 6.7 percent, the New York Times 3.5 percent and the Washington Post 3.3 percent.
With drops in circulation have come declines in revenues--not because subscriptions provide all that much money but because media companies collect money from advertisers based on the number of homes they reach. Big advertisers long ago began shifting from the printed page to television, but now classified advertising, the meat-and-potatoes of local and regional daily newspapers, has begun migrating at dramatic speed to websites like craigslist.
What's happening is not just a temporary downturn. From 1990, when newspaper circulation peaked at 62.3 million, readership has been in steady decline. That might lead some to the casual conclusion that the Internet is the problem. But as veteran journalist and media writer Ben Compaine explains, "The heyday of newspapers was in the late nineteenth century, as expanding literacy combined with the development of the steam-driven rotary press, a market economy and wood pulp-based newsprint to make the mass-circulation penny press possible. From the mid-1800s to the 1920s, newspapers were the only mass-circulation daily news and information medium in the media barnyard. That changed with radio. It accelerated with television. The Internet is just the latest information technology that has added to the choices that consumers and advertisers have for obtaining and creating information." All true, but there is powerful evidence that the breaking point for newspapers may finally be coming.
Individual owners and powerful families--who often, though by no means always, settled for reasonable profits in return for the ego boost that went with putting out a quality newspaper--are exiting the stage. Increasingly newspapers are owned by the shareholders of national chains, who do not even know--let alone care about--the names of the papers from which they demand profit margins that are generally twice the average for other industries. Where a local family might have grudgingly accepted a weak quarter and a downturn in revenues, shareholders greet any softness on the bottom line with demands for draconian cuts. If a paper's current managers are unwilling to make them, investors look for more ruthless managers. Investors forced the breakup and sale, in 2006, of the venerable Knight Ridder chain, which owned Pulitzer Prize-winning newspapers like the Philadelphia Inquirer, the San Jose Mercury News and the Miami Herald. Similar pressures have forced the Tribune Company, which publishes the Chicago Tribune, the Los Angeles Times, the Hartford Courant and several Florida dailies, to put itself on the block.
In recent months, Morgan Stanley has been pressuring the New York Times Company to alter its voting structure to reduce the influence of the Sulzberger family, which has opted for reasonably high--if often imperfect--journalistic standards over unreasonably high profits. The company's "current corporate governance practices deviate from what is widely considered to be best practice," explained Morgan Stanley Investment Management, owner of almost 8 percent of the Times stock, in asking shareholders to vote at this April's annual meeting in favor of its plan. The Sulzbergers shot back with a statement that the family "has no intention of opening our doors to the kind of action that is tearing at the heart of some of the other great journalistic institutions in our country." But the bosses at Knight Ridder once said much the same thing, and even if the Sulzbergers do manage to maintain one major newspaper in something like its current form, their statement is an acknowledgment that the broader trends are in the wrong direction.
How wrong? Under apparent pressure from Wall Street, the McClatchy chain just sold off what would normally have been a crown jewel among its holdings, the Minneapolis Star Tribune, at a rock-bottom price--less than half the $1.2 billion it paid for the largest paper in Minnesota eight years ago. "It was a drag on the bottom line, and we felt we would do better without it," declared McClatchy CEO Gary Pruitt. The new owner, a private-equity firm that owns no other newspapers, is not expected to raise journalistic standards--even if the new overseers claim they'll maintain the Star Tribune as the great regional daily it has been for decades. "These buyers aren't in it for the love of journalism, or even for the influence that you get by buying a local paper," argues John Morton, dean of newspaper ownership analysts. "They are in it to make a profit by flipping the paper in five or six years, and the way to do that usually involves a lot of cutting in the meantime."
The Times, the Star Tribune and other great newspapers are not going to collapse soon. But their circumstances are evidence of the rapid, and often dire, changes transforming American newspapering into something less than it has been. Owners are moving to satisfy investors by slashing newsroom staff, pressuring unions to accept cuts, dumbing down coverage of important issues, eliminating statehouse, Washington and foreign bureaus (even the Wall Street Journal is getting into the act, with the recent shuttering of its Canada bureau) and generally sucking the life out of what were once considered public trusts--or by selling out to firms that will do the same thing.
The result has been a hemorrhaging of journalism jobs, as reporters and editors join manufacturing workers in the ranks of "disposable Americans." More than 44,000 news industry employees, at least 34,000 of them newspaper journalists, have lost their jobs over the past five years. Roughly 200 jobs have been cut at the Chicago Tribune over the past year. The Akron Beacon Journal, a Pulitzer Prize-winning Ohio daily that once set the standard in the state for investigative journalism, has slashed newsroom jobs by 25 percent. The San Jose Mercury News is in the process of shedding 17 percent of its newsroom positions. And deep cuts are being implemented in Denver, Pittsburgh, St. Paul, Philadelphia and dozens of smaller cities where traditional beats--labor, farm, federal courts--are disappearing as retiring reporters are not replaced.
The Project for Excellence in Journalism's current report on "The State of the News Media" notes, "In some cities, the numbers alone tell the story. There are roughly half as many reporters covering metropolitan Philadelphia, for instance, as in 1980. The number of newspaper reporters there has fallen from 500 to 220. The pattern at the suburban papers around the city has been similar, though not as extreme. The local TV stations, with the exception of Fox, have cut back on traditional news coverage. The five AM radio stations that used to cover news have been reduced to two. As recently as 1990, the Philadelphia Inquirer had 46 reporters covering the city. Today it has 24."