This has been a tumultuous month for the newspaper industry, stumbling toward the finish line of a traumatic year. And it’s been a great week for The Gazette.
WGN, the broadcast flagship of the mighty Tribune Company media empire, took its call letters from the longtime boast in the Chicago Tribune masthead: “World’s Greatest Newspaper.” Last week Tribune filed for bankruptcy.
Gannett Co., the largest newspaper group in the country, cut 10 percent of its jobs. That pushed the nationwide total of jobs lost in the newspaper industry this year above 15,000, according to Paper Cuts, a site that keeps track.
Iowa’s Gannett casualties included the Des Moines Register’s outstanding cartoonist Brian Duffy. As editor of The Gazette, I am delighted that we have added him to our opinion pages in syndication. As a longtime Register reader and former colleague of Duffy at the Register, I am saddened to see the end of the front-page cartoons that became a Register distinction.
I brushed away tears some 25 years ago as I edited the 1983 obituary of Frank Miller, the Pulitzer Prize-winning cartoonist whose work graced the Register’s front pages for three decades following the tenure of Jay N. “Ding” Darling, winner of two Pulitzers. Many of us wondered then if the Register’s front-page cartoons – even then an anachronism, though much beloved by Iowans – would continue. But the Register hired Duffy, gave him the front-page slot and he lasted nearly as long as Miller. But the turmoil in the newspaper industry was more powerful than that quaint tradition.
The loss of a cartoonist paled, though, in comparison to the nationwide loss of billions of dollars in advertising revenues and in value of newspaper stocks.
Stock in Lee Enterprises, Davenport-based publisher of five Iowa newspapers and 48 other dailies, dropped last week to 35 cents a share. Within the past year Lee’s high was $15.97. That means the stock lost 98 percent of its value within the past year. Shocking as that is, Lee is faring better than a couple other newspaper companies, Gatehouse and Journal Register, and not much worse than McClatchy or Media General.
Even the powerful New York Times has lost nearly two-thirds of its stock value in the past year. As it struggles to restructure debt, it plans to mortgage its Manhattan headquarters and rumors swirl of a buyout by Google.
“Perfect storm” is a cliché that we have overused since that George Clooney movie made it popular. But the newspaper industry is facing a perfect storm of economic challenges: Print circulation has been falling for decades; online audience is growing but online advertising commands a tiny fraction of the rates of print ads; print advertising revenue dropped suddenly and sharply last year and even worse this year; and now the nation’s economy has plummeted into recession or worse. Even with all that, newspaper companies generally would have healthy operating profits. But those circumstances have made it difficult to impossible for many companies to handle their burdensome debt loads.
As companies like Lee, McClatchy and Gatehouse expanded in recent years, when advertising revenues were still rising, they bought at the top of the market, like lots of homeowners now facing foreclosure. As with banks, insurance companies and lots of overextended families, it is the debt that threatens these newspaper companies.
So why was this one of my most exciting, optimistic weeks in 37 years in the newspaper business? Not just because we’re doing better than other companies or just because our debt is manageable. If we were operating the same as other companies, we still might be heading the same direction.
This past week was exciting and optimistic because the Gazette staff did some outstanding journalism, looking back six months after our devastating flood. But we also looked ahead last week. Gazette executives spent lots of time planning a course that I think will secure a prosperous future for our company in face of all this turmoil. We are headed toward an organizational transformation unlike anything attempted in the news media. As we work out details, we will tell you about our plans. Chuck Peters, our CEO, is already blogging about the new mindset we need, the new tasks we must do and the new organization we will become.
Read his blog and mine. We’ll keep you updated on our plans. I hope it will be more uplifting than reading about what’s happening elsewhere in the news industry.
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