"Good luck finding a job."
That's what people tell me when they find out I'm studying journalism.
It's a sentiment that's no doubt reinforced by endless articles about newspapers' cost-cutting as circulation plummets. Even the New York Times is making cuts. Rather than solving newspapers' dilemma, the cuts eviscerate actual news content in favor of the hyper-localisms of T.V. news. Why read a newspaper full of kittens and celebrity gossip when you can look at Perez Hilton and Icanhascheeseburger.com?
Contrary to common belief, hunger for news, along with paid circulation, is actually increasing in most of the world, just not the U.S. or Europe where access to digital media is more common, according to a report from the World Association of Newspapers.
News organizations in the U.S. have seen a 3 percent drop in paid circulation this year, although their articles are increasingly accessible to larger audiences through Feeds and applications like Google News. Even with recent declines, newspapers still maintain circulation levels similar to those in the 70s, according to the Newspaper Association of America.
The real question beneath all the hoopla around the death of newspapers is the following:
"How do owners maintain the ridiculously high profit-margins they came to expect in the deregulated 90s?"
That's what uber-capitalist Sam Zell is trying to do by making drastic cuts, once again, at papers he owns like the Chicago Tribune and L.A. Times.
Recently, Zell announced plans to cut 500 pages of news from his 12 papers every week, and maintain an ad/news ratio of 50/50. In addition, he plans more staff cuts, saying they've analyzed each reporter's output and found that many reporters don't carry their weight (in inches). Of course this doesn't take into account the difficulty of reporting on investigative stories, that whole 'serving the public trust' thing, that's because Zell doesn't want those stories reported anyway.
"When you get into the individuals, you find out that you can eliminate a fair number of people while eliminating not very much content," according to news accounts.
In the past, Zell has fired numerous editors at the Times for refusing to make further newsroom cuts, just this week Tribune publisher Scott Smith resigned.
Zell is bad. He's a villain. But, in a fucked up way, we're lucky to have him. Zell's cuts are being made by media conglomerates at newspapers all over the country. It's happening with Avista Capital Partners at the Star Tribune. Zell and these conglomerates share an antagonism to journalism and an expectation of high profit margins. We're lucky enough to have this slimeball named Sam Zell who will explain their logic of unregulated capitalism to us, and focus public outrage, and perhaps overcome journalists' complacency. It's better than having a faceless group like Avista. Who are those assholes?
Felix Salmon of Conde Nast Portfolio explains capitalists' financial approach towards newspapers, and is incredulous that Zell hasn't sold the Times yet.
"Why kill yourself and the paper to squeeze out the profits needed to pay down the company's huge pile of leveraged debt, when you can just sell the bloody thing?"
By making all these cuts, you get rid of the reason for the newspaper, the news, and circulations drop accordingly. It happened during the Star Tribune's redesign here. John Morton was quoted in the New York Times saying the same thing:
“To the extent you diminish your product, I think you diminish your success, in print or online,” he said. “In the long run, it’s going to be harmful to newspapers’ brand names, which is the strongest thing they’ve got.”
Profit margins in newspapers have recently been as high as 30%, more than almost any other industry. In recent years, according to everyone, they've been declining. At this point, even Rupert Murdoch has said owners need to adjust their expectations of unrealistic profits, according to Jon Fine in Business Week. Will people like Zell and Avista do that? Or will they suck the newspapers dry and further dirty their reputations?
I'm excited to see what's going to happen. Like the housing market, newspapers can't keep offering the same unrealistic profits forever, and businesspeople raised during the Clinton era of consolidation and deregulation are trying to milk a little more money out of them, undermining their long-term financial sustainability by taking the news out of newspapers.
Probably, it's going to take a couple of these investors losing their pants. It's going to kill a couple newspapers. But in the end, it might prove to be a blessing by undermining the monopoly status of the corporate media, opening up space for new organizations that actually provide journalism.
In the last few years, we've seen the media's role as a public trust disappear. Certainly none of these owners see it like that. Maybe some good rich people will appear, and run them like the Christian Science Monitor? Or maybe the fourth estate will take advantage of all this new technology, shake off all this top-down hierarchy, all these hedge-fund scam artists, and rise from the dead? Like zombies.
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