Stop the Presses: Print Media Is Not Dead

BY CHRIS PETHERICK

If you read establishment news, you would be under the impression that Americans are ready to stop the presses forever when it comes to print newspapers. But don’t be too sure. While publically traded media empires are in trouble financially, independent and privately owned publications are weathering the storm just fine because they are not beholden to profit sucking corporate stockholders, who demand 20 percent margins even if it translates into a death sentence for the company. 


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With their stock prices heading south fast, dark clouds loom large for media empires these days, and they are not going quietly. As one writer put it: it’s hard to miss the whining of a guy who buys ink by the barrel. 

Take the massive Tribune Company, which owns The Chicago Tribune, The Los Angeles Times and The Orlando Sentinel. This billion-dollar news giant recently announced that it is bankrupt and is seeking protection from the courts. Fast on its heels, McClatchy, the country’s third largest newspaper chain, said it is putting The Miami Herald and its beach-front property up for sale. The New York Times is selling off its most valuable assets in order to raise capital so it can stay in business. The Washington Post has refashioned itself as an “education company,” due to the fact that Kaplan Inc., its test preparation company, now provides an estimated 53 percent of the paper’s revenue. Finally, The Examiner in Washington, D.C., owned by Denver billionaire Philip Anschutz, announced that it can’t even give the paper away for free and will be scaling back by closing its printing plant in the nation’s capital and reducing staff. 

Employee layoffs are hitting the entire mainstream newspaper industry hard. Paper Cuts, a web site that tracks firings at major newspapers, reports that some 15,000 jobs related to the newspaper industry have gotten the ax in 2008. There’s no doubt it’s a tough time for establishment editors and journalists. 

But don’t shed a tear for these massive corporate news outlets. According to John Morton, who analyzes the newspaper industry for a living and writes for the American Journalism Review, for most of 2008, newspaper companies were still running profit margins between 10 and 20 percent. Of course, this was down significantly from the 40 percent profit margins some were running a decade ago, but they are still considerably more profitable than many other industries. To put it in perspective, Wal-Mart averages a 3.1 percent margin and Toyota runs about a 5 percent margin annually. 

However, Wall Street, which is used to seeing papers run huge profits, does not see it that way and has become bearish on these corporate media behemoths. As a result, it’s becoming increasingly difficult for newspaper companies to pay out their high dividends to stockholders, which in some cases, according to the Columbia Journalism Review, yield nearly 15 percent of the stock’s value. That points to one of the main problems for big newspapers: Corporate stock and the yields they pay. Corporate executives and stockholders are milking their cash cows dry. This all comes as costs are decreasing due to new advances in technology and competition is on the rise with growing alternative publications and web sites. 

The irony, of course, is that Americans are hungrier than ever for news. And with more information available today than at any other time in history, people are turning away from massive media outlets that simply regurgitate the government line and are seeking out alternatives. 

So contrast the decline of the media monopoly with the remaining privately owned publications out there. For the most part, according to reports, they have not been pressured into cutting newsroom budgets because they have no corporate stockholders to pay dividends to. Also, their budgets and revenue are not public, so they can make tough decisions in private, which will benefit their companies in the long run. Finally, owners of small, independent newspapers do not look to their companies as bottomless money pits which are there to facilitate their jet-setting lifestyles. 

So don’t shed a tear for those crumbling media empires, because they are doing it to themselves. 

In this New Year, the country could witness the end of the media monopoly and a return to family-owned newspapers that prided themselves on their independence and integrity.

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