Politics & Media
Jul 01, 2008, 08:26AM

Newspaper Industry Slide Quickening

The economy for print media continues spiraling down a seemingly endless hole. Companies continue to shed employees, add bright colors, and write consumer-driven material, but the bottom has still not been reached. How much longer do newspapers have?

The value of 11 newspaper companies traded on the public market since 2005 dove a combined $23.7 billion in the first half of this year, falling almost as much in six months as they had in the three prior years put together.

Wall Street’s intensifying repudiation of the industry means that the companies in the group have lost a cumulative $49.7 billion in market capitalization in 3½ years, vaporizing 51% of shareholder value since Dec. 31. 2004.

To date, the decline in newspaper shares has not had a commensurate impact on the compensation (details here) enjoyed by the chief executives of several of the affected companies.

As you can see in the table below, Journal Register Co. and the Sun-Times Media Group (nee Hollinger) suffered the worst losses in the 3½-year period, respectively shedding 99.1% and 96.9% of their value.

  • Free papers have nothing to do with the steep profit declines of once robust newspaper companies. The problem is that as older people die they're not being replaced by NEW newspaper readers. It's a losing battle for print, and it's questionable whether the transformation to the web was too late, ham-handed, and if the revenue stream can even approach the old, fat days of media companies.

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  • Newspapers need to realize that they're going to hit bottom eventually and stop trying to slow the decline. The chase for new viewers is embarrassing, with the mandates for "charticles" and other flashy crap. New readers aren't coming, no matter how much you make the paper look like USA Today.

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  • I never read USA Today unless I'm on a plane, and that's far less frequent these days. But I'm not sure what "Doing Deities" is recommending: if The New York Times or Washington Post, for example, just give up on "trying to slow the decline," the layoffs will be massive. I agree that the marginalization of print is rapid, but I doubt employees want their bosses to give up.

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