Wall Street to Daily Papers: 'Drop Dead'
It's just a coincidence that the essay "Does the News Matter to Anyone Anymore?" by the impresario of The Wire, David Simon, appeared in the Washington Post the same day news broke of the top editor of the Los Angeles Times having been forced out over a refusal to make further budget cuts. Virtually every major magazine--as if by divine decree--has run a David Simon profile recently, and in each one the former Sun veteran has eloquently bemoaned the state of contemporary newspapering. And the departure of James O'Shea from the LA Times marks the fourth time in less than three years that either the top editor or the publisher has "quit" rather than make budget cuts demanded by the owner.
What was different about the latest LA Times departure was that it took place not under the much-detested Tribune Company ownership but the would-be savior of the Times, entrepreneur Samuel Zell. No less odd is that, according to the Tribune's Phil Rosenthal, O'Shea's departure had been planned about a week before the announcement, yet nobody at the Times bothered to come up with some corporate-friendly spin. According to the New York Times, Nancy Sullivan, a spokeswoman for the LA Times, simply said, "I don't have any comment for you." It's as if newspaper owners have given up caring to explain themselves. "This is the way of the world," they're telling us. "Get used to it."
Regarding Simon's newspaper critique, what is odd--at least if you're a fan of The Wire, and I defer to no one in that department--is that it mixes up problems with no relation to one another. I don't like that ambitious yuppie on the city desk any more than anyone, but what's he got to do with the budget cuts that are destroying the paper's institutional memory? And other Simon complaints about what's happened to the Baltimore Sun--where he worked and upon whose woes The Wire focuses--do not strike me as relevant to the industry's current conundrum. Perhaps his editors were overly obsessed with prizes, but since when have editors not been obsessed with prizes? Perhaps they did force him to oversimplify complex social phenomena, but again, when was that not journalistically the case?
I don't begrudge Simon his hobbyhorses. I have my own, primarily the business's refusal to stand up to--or even acknowledge--the war on press freedom the Bush Administration and its allies have been waging since they came to power seven years ago. But the guys who run these newspapers are focused on one thing only, and that's survival. You might be, too, if you were faced with facts like these:
The combined market value of independent, publicly traded US newspaper publishers has fallen by 42 percent in the past three years.
The Washington Post Company, with circulation down 14 percent since 2000, now calls itself "an education and media company," as the balance of its profits comes from its purchase of the Stanley Kaplan educational testing business.
Advertising--the industry's lifeblood--is also in rapid decline, moving to where it is cheaper and more efficiently targeted on the Internet. Spending for print ads in newspapers fell 9 percent last year, with the fall rapidly accelerating in the third quarter.
Newspapers are receiving a declining share of Internet advertising as well. While online ad sales surged 26 percent to more than $15 billion in the first nine months of 2007, according to Pricewaterhouse Coopers, for the first time newspapers no longer received the largest share.
The time Americans spend reading newspapers has fallen to just fifteen hours per month.
Fully 23 percent of Americans cite the Internet as their main source of election news. And though 26 percent name newspapers as their source, that figure has fallen by more than half since 1996.
Young people in particular do not read newspapers and have no interest in acquiring the habit. Daily readership for people under 30 now stands at barely one in five.
A recent Goldman Sachs analysis predicted a 7.9 percent decline in ad revenue this year, and cut its earnings forecast for all newspaper-based companies in 2008. Paper costs are going up 11 percent to boot.
Even though profits remain high at almost all these papers, the sad fact is that virtually no one is interested in staying in the business for business reasons anymore. The cautionary tales are too powerful. When, for instance, Wall Street lost confidence in the Knight Ridder chain in 2005, its sale netted only one bidder: the smaller McClatchy Company chain. At the time, McClatchy CEO Gary Pruitt wrote in the Wall Street Journal that the chain's $6.5 billion purchase price would have constituted "an unimaginable bargain only a few years ago." Since the takeover McClatchy has lost more than 82 percent of its market value. And it's hardly alone. In June 2005, Lee Enterprises paid $1.46 billion in cash to buy the Pulitzer newspaper chain. Lee's stock is worth barely a third of what it was before the purchase.
Nobody's got a good solution to this problem--at least not one that involves continued public, for-profit ownership of daily newspapers--but what is perhaps most depressing about the reaction of the industry has been its timid acquiescence to these trends. In James O'Shea's final remarks to the LA Times newsroom, he correctly identified "the biggest challenge" facing the industry: "to overcome this pervasive culture of defeat, the psychology of surrender that accepts decline as inevitable." The dude, alas, is dead-on. Newsmen and -women are supposed to go down fighting. As the great Molly Ivins observed not long before we lost her: budget cuts, buyout plans, it's as if the only agreed-upon solution to fight this deadly disease is "to commit suicide."
Not even the junkies on The Wire are that far gone...