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From AJR,   February/March 2006  issue

Under Siege   

Last year was a tough one for the newspaper industry. Papers slashed staffs, shuttered bureaus and cut back on newsholes. What does the future hold?

Related reading:   “The World Needs What We Do”
  Sherman’s March

By Paul Farhi
Senior contributing writer Paul Farhi (farhip@washpost.com) is a reporter for the Washington Post.     

How bad are things in the newspaper business? So bad that it's newsworthy when a newspaper isn't cutting its staff, chopping its newshole or taking some other action that requires another of those ominous Message to Our Readers announcements. In mid-December, the Providence Phoenix, the alternative weekly in Rhode Island's capital, reported, in a tone of evident amazement, that the Providence Journal hadn't gotten around to doing what every other daily seems to be doing these days.

"It could be a lot worse," the paper marveled. "Unlike such bigger newspapers as the Boston Globe and the New York Times, the Providence Journal has gone without any significant reductions in its journalistic staff" since a buyout in 2001. "Still, some of the industry-wide general anxiety has percolated through Fountain Street as ProJo managers contemplate a variety of measures to cut costs."

Shocking, but true: a newspaper that wasn't throwing reporters out the door. At least not yet.

Journalists who pay attention to their own job security know all about this sort of thing. A hard count of newsroom employees won't be available until the American Society of Newspaper Editors completes its annual census in a few months. But by most accounts 2005 was an awful year. Editor & Publisher estimated in November that newspapers shed some 2,100 jobs of all kinds during 2005, although that figure requires some asterisks. For one thing, E&P tracked only announced layoffs and buyouts at major and midsize newspapers. The tally also doesn't include new jobs, which rarely make headlines the way cutbacks do.

That's not much when stacked up against massive layoffs in the airline or auto industries. But there was certainly no shortage of grim announcements, either. Lee Enterprises, the new owner of the St. Louis Post-Dispatch, said in August that it would reduce the paper's newsroom staff by about 12 percent. The Tribune Co.-owned Los Angeles Times ginned up cuts of about 8 percent of its newsroom roster while Hearst's Houston Chronicle slashed about 7 percent of its total workforce (the newsroom was spared). Buyouts rippled through the newsroom at Knight Ridder's San Jose Mercury News, Philadelphia Inquirer and Philadelphia Daily News.

Whatever the final layoff totals for the year, there isn't much doubt which way the arrows have been pointing. Newsroom employment has trended down in three of the last four years. ASNE estimated that there were 56,400 people working in the newsrooms of America's daily newspapers in 2001. In 2005, the figure was 54,100, representing a decline of 4.1 percent over four years.

A modest loss, perhaps. But the overall picture starts to look more worrisome when viewed over the long haul. The current period is the second worst in the 28 years that ASNE has been tracking editorial employment. The worst was 1991-93, during a general economic recession. There's no recession now, except within the news industry itself.

This may explain the general sense of anxiety felt in newsrooms large and small these days. Beyond the bloodless numbers lies an even more distressing suspicion that no matter what its size or relative impact, this era's body-chopping may not be like what the newspaper industry has experienced before. Over the years, newsroom employment has bobbed like a cork, up when times were good, down when they weren't (remember 1991-93). But it's hard to make the case that what's happening now is just another cyclical dip. The news business is in the midst of drastic change, if not grave distress. An industry that has weathered such upheavals as the advent of television, the suburbanization of America, recessions and wars may be facing a fundamentally different future this time. As Bruce Springsteen once sang, in a different context, "Foreman says these jobs are goin', boys, and they ain't comin' back."

"My gut reaction is that we're at a transformational stage," says Jay Smith, president of Cox Newspapers. "We're at a point as a business where so much has changed around us, and we really haven't changed with it. If we think we can cut our way to prosperity, we're kidding ourselves."

Smith isn't just a top executive of a large newspaper chain (Cox owns 17 dailies, including the flagship Atlanta Journal-Constitution, and 25 non-dailies); he's also the chairman of the Newspaper Association of America, which represents publishers. In other words, he's practically required to ooze with official optimism. It's always a bad sign when the cheerleader is wringing his hands and anxiously watching the clock tick down on the home team.

Can anyone blame Smith if he isn't radiating sunshine these days? The newspaper industry's problems are well-documented: competitive pressure from the Internet, Wall Street's demands for high returns (which has fueled the potential sale of Knight Ridder), rising newsprint prices, declining circulation, a classified ad base that is under siege.

All of it makes even the smallest cutbacks appear to be a harbinger of greater dread. And it seems self-perpetuating: Each round of belt-tightening seems to drive away a few more readers, which leads to the next round, and so on, until the belt is so tight it's strangling. "The more we cut, the less value there is to sell," says Conrad Fink, a former Associated Press and newspaper executive who is a professor of newspaper management and strategy at the University of Georgia. "We're close to the point, if not beyond it, of diminishing returns. Readers are saying the paper is not worth the time to devote to it."

A few scenes from the front lines:

• With the closing of its Rome bureau in December, the Philadelphia Inquirer was left with just one foreign correspondent. A decade ago, the paper had an extensive foreign staff, with bureaus in Moscow, London, Jerusalem and three other cities. Reporters at the paper were grumbling recently, too, when the Inquirer reduced its library staff to the library supervisor and just two researchers.

• After the Hartford Courant announced layoffs and buyouts that will whack 54 jobs, 16 in the newsroom, the Tribune Co.-owned paper's reader rep, Karen Hunter, wrote an unusually blunt column that ran on December 18: "Readers know and some on the news staff will admit that the job cuts are getting close to the bone. State agencies and some towns aren't watched as closely as they once were. There is no way that a news staff that has been reduced by more than 120 people in 10 years [current staffing is 265] can produce the same newspaper it once did."

• When the St. Louis Post-Dispatch eliminated 12 percent of its newsroom staff, the collateral damage included Ellen Soeteber, the newspaper's editor. Soeteber announced her resignation to a stunned newsroom in November. Although her departure wasn't purely a protest action (Soeteber said personal considerations played a part in her decision), she said the decimation of her newsroom was a contributing factor. Citing similar cost-cutting pressures, John S. Carroll stepped down as editor of the Los Angeles Times in August and Howard Schneider quit the top job at Newsday in late 2004.

• The Chicago Tribune shut down the storied City News wire service in December, part of a 27-person reduction at the paper. The 115-year-old wire service, which predated Chicago's "Front Page" era, had been a training ground for the likes of Mike Royko and Kurt Vonnegut, not to mention Seymour Hersh and seven other Pulitzer Prize winners. Its hard-nose reporting motto became legend: "If your mother says she loves you, check it out." And that might not be the last cut at the paper, says James O'Shea, the Tribune's managing editor: "I hope it is, but I don't know yet."

• The New York Times Co. said last fall that it would cut 45 newsroom positions at the New York Times and 35 at its Boston Globe as part of a 500-person downsizing company-wide. In a memo to the Times' 1,200-person staff at the time, Executive Editor Bill Keller sounded almost numb: "Like the rest of you, I found the recent spate of retirement parties more saddening than celebratory, both for the obvious personal reasons and because they represented a sapping of our collective wisdom and experience."

Things are also tough in Akron, where the staff of the Beacon Journal is slogging through a gloomy Ohio winter. The paper is contending with a spartan budget regime imposed by its parent, Knight Ridder, which is watching its pennies now that its largest shareholder, a Florida-based investment group, has pressured management into putting the company up for sale (see "Sherman's March" February/March 2006).

So far the Beacon Journal has avoided layoffs, but for one week in December it shrank dramatically. The paper temporarily slashed its opinion pages from two to one, combined a features section with its local section and trimmed pages from its sports section. Space for daily TV listings has been cut by more than half.

Amid all the trimming, the alternative Cleveland Scene reported in December that the paper had put a moratorium for the rest of the year on buying notebooks, pens and batteries for its reporters and photographers. (In response, the Poynter Institute sent the paper two boxes of notebooks, gratis.) The story instantly came to symbolize the industry's malaise, but the Beacon Journal's outgoing managing editor, Mike Burbach, says it hasn't been quite the crisis the story portrayed: "Everyone has what he needs to do his job," he says. "We're just not buying anything we don't need."

That's not exactly a bold vision for a paper with a heritage like the Beacon Journal's. A winner of four Pulitzer Prizes over the years, the daily was the seed of John S. Knight's once-proud empire. Knight inherited the paper from his father, Charles L., in 1933, and soon after began assembling the publications that would become Knight Newspapers (Knight merged with Ridder Publications in 1974).

The perverse irony of the paper's current troubles is that it remains financially healthy. By some measures, in fact, it's booming. In an analysis of Knight Ridder's properties in late November, Morgan Stanley & Co. estimated that the Beacon Journal would make $21.6 million in 2005 on revenue of $103 million. That means the paper earned 21 cents on every dollar it brought in – a spectacular margin by the standards of other industries, but apparently not enough for investors who've come to expect even higher returns from newspapers.

Burbach has concluded that the ground is permanently shifting, and not just under his own newsroom. "This is different than before," he says. "The business has changed dramatically. Google didn't exist before. How many cable channels are there now, how many magazines, how many more ways are there to reach people? If we want to keep at this, and if we believe in what we're doing, we have to adapt. Some of what we do and love to do will help us compete, and some of it won't. We have to learn the difference."

Akron is hardly the only paper into penny-pinching. In January, E.W. Scripps' Naples Daily News asked staffers to "immediately" stop using the phones on their desks as much as possible. The Florida paper wanted to keep the lines open for new subscribers and advertisers, and apparently more phone lines weren't an option.

The cutback craze might be good for Wall Street and publishers' bottom lines, but even people outside newsrooms are beginning to fret that it's not very good for democracy. While opposition to newspaper layoffs hasn't exactly coalesced into a social movement, it has caught the eye of some cultural and political organizations.

When Tribune Co. Chairman Dennis J. FitzSimons spoke at a media conference in New York late last year, activists from the liberal advocacy group MoveOn tried to present him a 45,000-signature petition decrying hundreds of job cuts at Tribune Co.-owned papers. "Politicians and corporations who should be held accountable by vigilant watchdog journalism will instead be covered by a staff that is stretched too thin," asserted Noah Winer, a spokesman for the group. FitzSimons declined to meet with the organization.

A week later, readers of the Philadelphia Inquirer were treated to an op-ed page commentary about Knight Ridder's potential breakup by Rebecca Rimel and Donald Kimelman of the Pew Charitable Trusts (an underwriter of several journalism initiatives, including AJR's Project on the State of the American Newspaper). "This is more than a fascinating business story," wrote Rimel, Pew's president and CEO, and Kimelman, director of information and civic initiatives and a former Inquirer reporter. "There is an important public interest – a community interest – in the outcome that deserves greater attention. For journalism is not just a business. It's a public trust, an essential element in the democratic mosaic."

It's no coincidence that the harshest cuts have tended to come at newspaper companies owned by public shareholders (Knight Ridder, Tribune), while those that have maintained family control have been more benign (not that the New York Times Co. cuts were so benign). The former group must satisfy the demands of thousands of shareholders, whose foremost concern isn't the number of Pulitzers won or foreign bureaus opened but rising profits and stock prices. Privately held Cox, for example, has had only four chairmen in its 108-year history, all members or descendants of the founding family. It also hasn't had a layoff on its news side for at least five years, says Jay Smith.

But all newspapers face the same economic realities. Reporting is a labor-intensive enterprise. Unlike manufacturers, who have learned to turn out more SUVs or rolls of steel with better technology, daily journalism still requires raw manpower. It's difficult, if not impossible, to increase the productivity of a newsroom; not much can substitute for the basic manual work of collecting facts and images and assembling them into accurate, lively and coherent packages. And manpower costs money.

Particularly labor-intensive are investigative and enterprise reporting, which dig beneath the surface and often turn up the stories that are most valuable for readers.

The question is, if newspapers, online or on paper, don't provide the resources to report on their communities in depth, who will?

So far, the answer appears to be almost no one. A dozen or so years after the Internet first began to achieve mass appeal, reporters working for mainstream news organizations still are by far the biggest and most important sources of original reporting. Internet "news" might cease to exist without print journalists to feed it. Internet giants like Google and Yahoo! do no newsgathering of their own. ("They'd be crazy to get into original news reporting," says Conrad Fink. "It's too expensive.") Instead, they aggregate and disseminate the work of reporters from the very news organizations that are now shedding workers – thanks in part to competition from the Internet. "No one has figured out how to finance newsgathering on the Web" as a stand-alone enterprise, notes O'Shea, the Tribune's managing editor.

Bloggers – one of the Internet's most important info-innovations – don't offer much hope. Bloggers mainly chew over facts that others have collected – in essence repeating, not reporting. In a survey of the 100 most popular news-related blogs in 2004 – 59 responded – University of South Carolina doctoral students Bryan Murley and Kim Smith found half the bloggers said they got most of their news and information from newspapers. Another 19 percent got most of their information from other bloggers, who in turn were likely to have gotten it from a newspaper or some other mainstream outlet.

The much-ballyhooed citizens' or community journalism movement would seem to offer limited potential. New technologies give almost anybody the means to provide a very rough first draft of history (the first photos of last summer's London subway bombings were taken by people with cell phone cameras). But most good journalism can't be done by hobbyists. "Serious journalism is labor-intensive and time-consuming and therefore requires large amounts of money and health benefits and pensions," wrote longtime journalist Sydney H. Schanberg in the Village Voice in December. "The blogosphere has plenty of time, but as yet none of those other items." The same could be said of the community journalism movement.

The central problem may be that newspapers are caught betwixt and between eras. Print is plainly in decline, but the Internet hasn't grown nearly fast enough to offset that deterioration. Despite strong growth in both traffic and ad revenue, newspaper Web sites now collect only about $2 billion a year in advertising, compared with $48 billion on the print side, according to Borrell Associates, a media research and consulting firm.

Will the Internet side of the business ever grow as large as the print side once was? "We're in a big competitive scramble, and you don't know and I don't know how it's all going to turn out," O'Shea says. "Right now, we can't tell who's going to win and who'll lose. I don't even know" if newspapers on the Internet will make it. "My own gut tells me that newspapers will be around. They may become even better. But there are no guarantees."

Georgia's Fink thinks newspapers will stick around a while longer, too. But they will inevitably have fewer readers, he says. He predicts that circulation will keep falling as today's casual readers become tomorrow's non-readers, and the total drops to a core of perhaps 40 to 43 million (from about 56 million now). The good news: These core subscribers will be relatively upscale and well-educated – society's "button-pushers," as Fink calls them. But newspapers won't need as many journalists to serve this group.

In this new world, daily newspapers won't be so daily; some will stop coming out on unprofitable days of the week, such as Saturday, predicts Bob Papper, professor of telecommunications at Ball State University. Regular features – stock tables, TV listings, etc. – will disappear, or appear only on the Web.

Fink says the emerging newspaper world requires more flexible journalists – those who can churn out quick news stories for the Web site and in-depth analytical pieces for the next day's newspaper, which will be carried on the Web, too. The differences between "print" and "online" operations will largely evaporate within the newsroom, if they haven't already. (USA Today made this official late last year when it announced it would merge its newspaper and online newsrooms.)

Fink thinks daily journalism will be different, but he isn't so sure it will be better: "With the disappearance of so much readership and advertising support, there will be a disappearance of much of the journalism you and I love," he says. "If we're less able to support vigorous, independent journalism, that's a threat to society. It hasn't really occurred to most people that the heart and soul of journalism is being decided right now."

Newspapers still have some important competitive advantages over the rest of the news media. They have name recognition and trusted brand names. They (still) have the biggest newsrooms in town. And they have community connections. "I still think there's going to be strong demand for locally powerful journalism that no one can do like a newspaper," says Mike Burbach. "There's investigative and enterprise [reporting]. People respect and respond to the kind of information and digging that helps them make their lives and their communities better."

Jay Smith says he's optimistic about the future, too, even if he's critical of some of the penny-wise thinking that marks the present era. "We've just come through five very difficult years," he says, "and if we simply continue business as usual, it's going to be worse. But if we think about how to preserve and protect the daily paper and how we can reinvent it, if we build a huge online presence, if we can build other businesses around it, I think the future looks bright."

Washington Post reporter Paul Farhi (farhip@washpost.com) writes frequently about the media. He explored the future of newspapers in AJR's June/July 2005 issue.