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Are Newspapers Doomed?

In this part of the world there has been much speculation and analysis , with some handwringing of the state of the Strib. Ever since McClatchy sold the paper at the end of 2006 for what seemed to be a shockingly low $530 million to private equity sharks Avista Capital Management, the slide has been precipitous. It seems as if everything Strib-related has turned to dross. It sounds as if Avista (and the unions) are about to face their own reckonings in the form of financial haircuts. Not only is Avista’s $100 cash investment up in smoke, they cannot peddle the paper for what they owe. When the bill comes due, the unions fear that they’ll bear much of the brunt of this.

The paper was embroiled in the Par Ridder fiasco, which cost them much in time, money, effort, and lost reputaton, and brought them nothing. The fact that they purchased the paper at the top, when easy financing was readily available, and before the credit markets have truncated, causing the real estate market to plummet. Along with this is that they were buying into an already declining market. The industry is in a unique position in that each day in the obituaries they print the passing of yet more likely subscribers. The next generation seems to have little or no use for the rather quaint idea of a home delivered newspaper. Meanwhile, the transition to the internet world has been uneven, with little in the way of forthcoming profits.

More importantly, the Strib has made errors in abundance. Years of treating their customers (both subscribers and advertisers) with contempt is finally creating consequences. Their decisions seem to be extraordinarily ill-considered. Case in point: killing the Weekly TV magazine. I understand that the section was no longer profitable. Still, when they killed that off, they eliminated one of the main reasons for part of their subscriber base to even buy the paper. A constituency that is also their most loyal and the one most likely to keep the paper.

Frankly, I’m rather bored with the entire media bias complaints of those in certain circles. Besides their editorial stance (it’s their paper, they can publish what they want), my complain is the lack of surprise and any the utter predictability of the OpED page. Just as you’re assured of Phyllis Kahn coming up with some ridiculous utterance during the session, the Strib OPED can be counted upon to publish some tired, trite nonsense each day. There are seldom any suprises in that section of the paper.

As someone who grew up reading both the morning and afternoon papers, and who for a while had both the Strib and the SPPP delivered to my home, I certainly can appreciate the devotion people have the the print edition. Whenever we travel I score at least one of the local rags each day.

Nonetheless, the market is moving inexorably towards a different delivery vehicle. The economics of the current model aren’t working very well, yet the new world doesn’t lend itself to a profitable news-gathering operation. Something will have to give.
The signs abound. Both Cincinnati and Albuquerque have had papers shuttered in the past year. Negotiations in Seattle about Joint Operating Agreements have been litigious. In yet another harbinger, the premier newstand in town (Shinders) failed. Still, newspapers have been routinely expiring over the past 50 years. Don’t believe me? Check out the New York Herald-Tribune, or perhaps the Chicago Daily News.

Does that mean that newspapers are dead? Not necessarily. The days of papers with monopoly profits are probably over. The Strib can survive, provided that it’s not expected to cart around its massive debt. Yet the idea of cutting its way to prosperity is a fool’s errand. The more it cuts, the more it itself becomes expendable.

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