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The Year The Newspaper Died
(July 8, 2009) As you may have noticed, newspapers have had a rough 2009. But you may not quite appreciate the magnitude of the collapse.
So far this year:
The economy collapsed and advertising budgets went with it, accelerating a process already underway: the Internet's erosion of the entire newspaper industry. The Atlantic's Megan McCardle explains:
For most of history, most publications lost money, or at best broke even, on their subscription base, which just about paid for the cost of printing and distributing the papers. Advertising was what paid the bills. To be sure, some of that advertising is migrating to blogs and similar new media. But most of it is simply being siphoned out of journalism altogether. Craigslist ate the classified ads. eHarmony stole the personals. Google took those tiny ads for weird products. And Macy's can email its own damn customers to announce a sale.
This perfect storm hit four major newspaper conglomerates -- the Gannett Co. Inc., GateHouse Media Inc., The Sun-Times Media Group and The Journal Register Company -- especially hard. Together, they've closed 61 newspapers this year. (See the full list here)
Gannett Co. Inc.
Revenue fell 34.1% in Q1 '09. It has laid of more than 10,000 employees since 2007. At least 90 employees were laid-off in the beginning of 2009 and 1,400 more will be laid off by July 9. Detroit Free Press delivery cut to three days a week, from daily; The Tuscon Citizen went online. Most employees have been forced to take two weeks of unpaid leave.
Revenues declined by 15% this year and losses increased $3 million. It cut 10.5% of its workforce since Jan 2009 and cut pay 7%-15% for the rest of its employees. Though local advertising revenues sank 13.4% in 2008, CEO Mike Reed says the company plans to focus more on local publications: "We view our exclusive local content as our greatest asset and as our sustainable competitive advantage. We are working diligently to intensify our local news coverage to further solidify these advantages."
The Sun-Times Media Group
Filed for bankruptcy in April 2009.
It has until July 29 to sell or reorganize its operations, though it has asked for an extension until October. Court documents show that the company bled $4.5 million a week between Jan and March 2009. The company initiated pay cuts of 15%, up from 7% in January.
The Journal Register Company
Filed for Chapter 11 in February, with an overhanging debt of $692 million. Court papers show the company claimed "advertising revenue had been driven lower by the housing downturn, declining automotive sales, the retail sector slowdown, a slow labor market that has hurt employment classifieds and a shift to online media." But the company's downfall began in 2004, when it bought several newspapers in Michigan for $415 million.
See 61 newspapers closed so far this year.
Preethi Dumpala, Business Insider
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