Don’t Write an Obit for Newspapers Yet

March 18, 2012 by  

The blogosphere gets it wrong again… A rather sensational blog from Newsbusters.org, reported in an OpEd piece published by the S. Florida Sun-Sentinel, which talked about the changes going on at the Sun-Sentinel and the difficulties going on at many of today’s newspapers. As usual, they got it wrong. The blogosphere (of which I am an admittedly fringe member) just loves to over dramatize and stretch/distort the truth around every story that makes them look better (if I were in competition with newspapers, wouldn’t I badmouth them ever chance I had?).

The history of newspapers in South Florida is a long and distinguished one, at one time supporting six major papers: The Miami Herald, The Miami News, The Fort Lauderdale News, the S. Florida Sun-Sentinel, the Palm Beach Post, and the Palm Beach Times. They now have three, with the death of the Palm Beach Times, the Miami News, and the Fort Lauderdale News. The death of these papers can be attributed to a number of things, not the least of which is changing demographics in S. Florida (the Spanish language paper, El Herald, remains very successful), higher costs (labor and newsprint), and the death of afternoon papers due to changing tastes.

The once proud Miami Herald, formerly owned by Knight-Ridder, was at one time the newspaper of record in Florida, with daily distribution covering the entire state. Their columnists and reporters were a who’s who of star journalists and writers (Edna Buchanan, Carl Hiaasen, and Dave Barry, to name three). About five or six years ago, the Herald stopped the statewide distribution, and even stopped subscription-based distribution in Palm Beach county, only 50 miles north of Miami.

Indiscriminate cost-cutting and the firing a number of (expensive) world-class reporters and columnists caused a serious loss of reputation (and not only at the Herald), and with that, a continuous spiral of fewer/smaller pages, reduced advertising, and rising labor and newsprint costs. Knight-Ridder sold out to McClatchey Company about ten years ago in a highly-leveraged move that saddled the paper with a ton of debt, just in time for the web (for which they were not prepared) and a serious attack to their main cash-generating operation–classified ads–by sites like craigslist.com (more below).

The woes of the S. Florida Sun-Sentinel’s parent, the Tribune Corp., are related to taking on too much debt–again mostly from a heavily-leveraged buyout by Chicago real estate mogul Sam Zell, who borrowed against the Tribune Corp., sucking out as much cash as possible, leaving the Tribune operations in financial shambles. This has resulted in a declaration of bankruptcy, a strategic move to deal with the heavy debt load placed on it by Zell.

The interesting thing, as Sun-Sentinel publisher Earl Maucker stated, fundamental business of the Sun-Sentinel is profitable. A great number of newspapers are profitable. The problem with today’s newspapers is that while most of them really are profitable, they aren’t AS profitable as they once were, and the corporate beancounters and stockholders continue to expect the same huge profit margins that the classified ad business once generated (and set financial goals for each operation accordingly)–at least until Craigslist.com came on the scene. Services like Craigslist, CareerBuilder, Monster, Dice, and even eBay have cut deeply into the most profitable parts of a newspaper’s business. Internal costs at a newspaper are high: labor, raw material (paper, ink, etc.), printing operations, distribution, and now web-based costs.

The blog is quite correct in stating that the paper’s executives were very slow on the uptake, going online. Lately, there have been discussion of monetizing their websites, requiring micropayments for each story or feature. Well, I think it’s much too late for that. The cat’s out of the bag, and the public has grown quite used to receiving free (advertiser-supported) web content from not only their local newspapers, but the same from national papers, and the rest of the mainstream broadcast media sites (Fox, CNN, MSNBC, etc.). The public is not going to pay for their news unless all the media giants and not-so-giants conspire to simultaneously take down their existing websites and replace them with pay-for-content websites. The Wall Street Journal has done this successfully, because they split their site into free and premium (paid) content from day one. Switching to a pay-to-read model will only push the public into the waiting arms of blatantly biased and irresponsible blogger sites that seem to have a very thin connection with the truth. Irresponsible? How about the latest from the ultra-right bloggers–that a conspiracy exists, hiding the “fact” that President Obama was born in Indonesia or Kenya, hence brewing a potential constitutional crisis, and the potential for rioting and violence at a national level–one of my friends so believes this lunacy that he’s stocked up on guns and is preparing to head out of Florida to property he owns up north where he believes he can better defend himself when the time comes. Isn’t paranoia grand?

But I digress…

The Tribune Corp., the parent of the Sun-Sentinel, made some very strategic moves a few years ago and built a huge, heavily-automated printing operation here in S. Florida. About two years ago, the Sun-Sentinel and the Palm Beach Post (owned by Atlanta’s Cox Corp.) entered into a joint operation where newsrooms are shared–the Sentinel uses Post writers to cover news in the Palm Beach environs, and the Post uses the Sun-Sentinel writers to cover Fort Lauderdale and Miami. Just before the first of the year, they made an additional big joint announcement: the Palm Beach Post is shutting down their ancient and obsolete pressroom and is now using the more modern, efficient, and economical presses at the Sun-Sentinel site, at the cost of 40-50 jobs in the Post pressroom. It also allows the Post to eliminate their carriers and use the Sun-Sentinel carriers in the Palm Beach market.

It’s not great for newspapers today, no question. The end of the Rocky Mountain Press, the Seattle Post-Intelligencer, the Detroit Free Press and Detroit News going to a 3 times per week home delivery schedule (Thursday, Friday, Sunday), and the formerly mighty San Francisco Chronicle hemorrhaging badly. Heck, the New York Times, the old gray lady herself, is even talking about eliminating or severely cutting back on their print edition. Even with that, implementing modern pressrooms and print technology, getting tighter control of their labor costs, reducing page size, and moving more content to their website, print editions still have a fighting chance of retaining their relevancy–really! I think the newspaper industry is finally starting to “get it”, as are their advertisers.

Remember, these are businesses with their roots in the 17th and 18th centuries. Before the web, if you wanted to start a newspaper, you did so in pretty much the same way everywhere, though they did modernize the newsroom and pressroom (a process that was hardly pain-free!) in the 1970s with computer terminals replacing typewriters, digital typesetting replacing Linotype hot lead type composition, and filmless plate-making replacing multiple technologies. They are making the strategic moves needed survive in a world where the web, blogs, etc., are an ever-growing way people get their news today. Newspaper publishers are going to have to adapt to new realities in order to survive: lower profit margins than they were used to, lower number of copies printed each day, more reliance on the wire services and alternative media for national and global content (focus their reduced staff on local news), and will need to innovate in new ways with a mix of print and online and maybe even tighter partnerships with the broadcast media, which is undergoing its own problems with falling viewership, to make it. It’s going to be costly, and this is not necessarily the best time to be adding debt, but like the government, private industry may need to spend its way out of these doldrums, too.

The only way I’ll give up my newspaper is when it’s pried from my cold, dead, ink-stained, paper-cut fingers.