Wall Street to Newspapers: Drop Dead
I don’t so much mind that newspapers are dying—it’s watching them commit suicide that pisses me off.
Let’s use this as a handy exercise in journalism. What is the unexamined assumption here? That the newspaper business is dying. Is it? In 2005, publicly traded U.S. newspaper publishers reported operating profit margins of 19.2 percent, down from 21 percent in 2004, according to The Wall Street Journal. That ain’t chopped liver, friends—it’s more than double the average operating profit margin of the Fortune 500.
So who thinks newspapers are dying? Newspaper analysts on Wall Street. In fact, the fine folks on Wall Street just forced the sale of Knight Ridder Inc. to McClatchy Co., a chain one-third KR’s size. McClatchy’s CEO, Gary Pruitt, pointed out in an op-ed piece that investors are so chicken that his company picked up KR for a song. (Actually, he said no such thing—he was far more dignified. But that’s what it comes down to.) So if newspapers are so ridiculously profitable, how come there’s panic on Wall Street about them? Because we’re losing circulation—2 percent in 2004, and down 13 percent from a 1985 peak, says the Newspaper Association of America.
So we’re looking at a steady decline over a long period, and many of the geniuses who run our business believe they have a solution. Our product isn’t selling as well as it used to, so they think we need to cut the number of reporters, cut the space devoted to the news and cut the amount of money used to gather the news, and this will solve the problem. For some reason, they assume people will want to buy more newspapers if they have less news in them and are less useful to people. I’m just amazed the Bush administration hasn’t named the whole darn bunch of them to run FEMA yet.
What cutting costs does, of course, is increase the profits, thus making Wall Street happy. It also kills newspapers.
Aside from my own sentimental attachment to newspapers, I have no objection to all of us shifting over to the Internet and doing the same thing there. You’d still have the two big problems, however: A) How do you know if it’s true? And, B) how do you put a lot of information into a package that’s useful to people?
If newspapers were just another buggy-whip industry, none of this would be of much note—another disappearing artifact, like the church key. But while Wall Street doesn’t care, nor do many of the people who own and run newspapers, newspapers do, in fact, matter beyond producing profit—they have a critical role in democracy. It’s called a well-informed citizenry.
We are in trouble.
The Project for Excellence in Journalism, run by Columbia University, has a new report out that finds the number of media outlets continues to grow, but both the number of stories covered and the depth of reporting are sliding backward. Television, radio and newspapers are all cutting staff, while the bloggers of the Internet either do not have the size or the interest to go out and gather news. Bloggers are not news-gatherers, but opinion-mongers. I have long argued that no one should be allowed to write opinion without spending years as a reporter—nothing like interviewing all four eyewitnesses to an automobile accident and then trying to write an accurate account of what happened. Or, as author-journalist Curtis Wilkie puts it, “Unless you can cover a five-car pile-up on Route 128, you shouldn’t be allowed to cover a presidential campaign.”
Tom Rosenstiel of Project for Excellence says, “It’s probably glib and even naive to say simply that more platforms equal more choices. The content has to come from somewhere, and as older news-gathering media decline, some of the strengths they offer in monitoring the powerful and verifying the facts may be weakening, as well.”
The McClatchy-KR merger, however, emphasizes the perils of ever fewer outlets. Twenty-five years ago, about 50 corporations owned most of the media outlets. Today, there are between eight and 12. McClatchy and KR both have fairly decent reputations for journalism, so what difference does it make if they merge?
Of course, McClatchy intends to merge the Washington bureaus. Guess which Washington bureau has the distinction of being the ONLY one to report skeptically on the administration’s claims about Iraq’s weapons of mass destruction before the war? Knight-Ridder and its terrific reporters Warren Strobel and Jonathan Landay. They didn’t have to go to Iraq to get the story—they found it in Washington: “Lack of Hard Evidence of Iraqi Weapons Worries Top U.S. Officials.”
I’ve thought for years that newspapers should all be owned by nonprofits. There is a chance something like this will actually happen—the Newspaper Guild, in alliance with the Communications Workers of America, is getting ready to bid on the 12 KR papers McClatchy has to sell. Eight of the 12 are Guild papers, with combined employment of 7,000 and circulation of 1.3 million. Among the 12 are such outstanding newspapers as The Philadelphia Inquirer, San Jose Mercury News and St. Paul Pioneer Press.
McClatchy can’t swallow all of them, and so the two unions have turned to a “worker-friendly” investment fund to back their bid. Keep an eye on this: It is a most hopeful development.
Molly Ivins is a nationally syndicated columnist. Her most recent book with Lou Dubose is Bushwhacked: Life in George W. Bush’s America (Random House).