The Lincoln Journal Star announced 16 cuts today, eight of which were from the newsroom. The story puts much of the blame on the rising cost of newsprint but fails to address whether or not any cutbacks were ordered from above.
Last week, LJS owners Lee Enterprises announced their Q3 profits fell more than 87 percent since the same quarter last year. The company had already been forced to revise its 2008 Q2 losses, acknowledging that losses originally reported as $4.5 million were actually $716.4 million.
Lee’s value has dropped 93 percent since late 2004, when it was valued around $2 billion. Lee was trading in the $45-50 range in November and December 2004; the stock price has bounced back above $3 after dipping in the $2 range last week, putting the company’s value around $145 million.
UPDATE: “Mary E. Junck [CEO] of Lee Enterprises (LEE) pocketed a 17.8% increase to earn a bit less than $3.4 million as her company’s stock skidded 52.3%.” – newsosaur
I’m just curious, Neal, as to what your insights to the situation might be. What do you think is causing this? More people switching to online news?
My opinion, which is backed up by little more than my personal bias and outsider observations, is that newspapers reacted to the internet in the wrong way (I’m talking industry-wide and not at all just focusing on the Journal Star). As young people gravitate toward the internet, you see newspapers devoting more space to celebrity gossip, trends and gadgets, because as we all know, that’s what the internet is.
A newspaper will never be able to beat the speed and “Web 2.0″ aspect of what the internet can offer. I can’t imagine anyone is going to stop visiting TMZ because their local paper has a new section on celebrity gossip. So I think the error is in allocating resources to compete with what the web offers.
What I think newspapers should be doing is using their resources to do what most online sources cannot do, and that is to report, in depth, on local issues. You look at a situation like with the Union-Tribune in San Diego. That paper is losing money and readers like crazy, but the news in The Reader, CityBeat and Voice of San Diego is proving that there are stories out there — the huge daily just isn’t covering them.
As a cartoonist, I’ve found over the past four years (since starting with the LJS) that I have to increasingly rely on Nebraska blogs for a lot of the news because a lot of political developments are simply not getting reported in the papers anymore, whether that’s the Journal Star or the World-Herald.
When numbers start to fall, managers go into panic mode and worry about alienating readers, so stories become more watered down. When cutbacks begin, reporters get scared and so they start coming up with stories that they think will please management. I don’t think it’s any accident that as U-T circulation has dropped, most of the scandal stories are based around the city attorney (whom U-T editors dislike) and stories about the mayor (whom the U-T likes) are positive. The problem is, there are many more stories out there that they’re neglecting. The U-T didn’t get around to reporting on the recent development corp scandals until after Voice of San Diego (a free online daily) broke the story.
I realize just using this San Diego thing as an example doesn’t directly relate to the LJS, but I think it’s illustrative of how the philosophy of larger papers isn’t exactly endearing itself to the type of reader who has been coming to newspapers for news, and the internal morale that results isn’t helping either.
Then you have to look at the debt built by these major newspaper companies as a factor. At some point, bills have to be paid. The Journal Star could be the most profitable paper in the country and it would still probably feel some of the Lee Enterprises burden. And when the economy is as bad as it is right now, advertisers are cutting back. That is going to affect a paper’s ability to stay profitable regardless of the content.
Thanks for the analysis…it is very helpful.
BTW, that is so nice of Ms. Junck to think of the little guy in this time of economic downturn.
Interesting, I’ve heard that some papers are actually dropping Reuters/AP etc and other newswire services behind the same logic that Neal speaks of. They figure that most people will get their world/national news from the internet, radio or TV news channels (and I assume, if they’re in the market would rather wait for more nuanced analysis from Magazines or even blogs), so they’re concentrating on just providing local news and events coverage, and not bothering to deal with broader features and national/world news.
Ted Rall wrote a column recently outlining “Three cures for ailing newspapers.” They are 1) take everything offline, 2) copyright every piece of work in the paper and enforce that copyright, and 3) eliminate wire services.
As far as that wire / syndication stuff goes, I’ve argued for something similar for the future of editorial cartooning, but Rall points out the problem with ideas like this is that everyone would have to play along for it to even have a hope of working.