WHEN three of America's greatest dailies - the Los Angeles Times, the Chicago Tribune and the Baltimore Sun - plus the rest of the mighty Tribune Group fold into Chapter 11 bankruptcy, then obituaries for newspaper publishing itself flow fast and glib, generating gloom that washes as far as Fleet Street. Added to that comes news that the New York Times itself is to mortgage off its spanking new building to deal with next year's debt dilemmas.
But (courtesy of Forbes magazine and sundry statisticians) consider what Sam Zell, the Tribune Company's latest owner-cum-wizard-financier, blames on this 'perfect storm' of a credit crunch. In the third dire quarter of 2008, the Tribune company still had an operating cash flow of $90m on $1bn in revenue. And, within that, the 10 papers it owns made $13m on $654m revenue.
That's not fatal. That's still tolerable trading business in the teeth of recession. Except that the $8.2bn media empire Zell took private control of 12 months ago for only $300m of his own money is $13bn in debt, largely made up of leveraged wheezes from Old Sam's almanack of amazing takeovers. So its creditors are in the soup, alongside pensioners who won't get their money and employees who ploughed good dollars after bad. It's a horror story full of human misery. But it has very little to do with curse of the internet or similar standard rationales of decline.
Simply, here is a fine collection of famous-name titles and TV franchises run slap into Lake Michigan by panicky sellers and optimistic buyers. There'll surely still be papers in Chicago, Baltimore and LA when it is all over, and they'll still make money. But the road to Zell was paved with lousy calculations. He bought, and has now essentially sold out, the Tribune company as though it were another a plot of land to plonk his rented caravans on.
The central problem isn't the internet (a dampener on profits and spreader of uncertainty, at worst; not the end of everything). The problem is newspaper ownership flawed by misplaced ambition and short-sighted management.
Sam Zell may be the hardest case on the block, but dozens more share his pathway to the pits. Why is the New York Times having to turn its new home into a crutch? Because it has a $400m debt repayment due next spring, and this is the only way left to meet it. Why are the Denver Post and 53 other MediaNews-owned dailies in such straits? Because their debt is eight times earnings, before tax. Why did Trinity Mirror, Britain's biggest chain, drop out of the FTSE 250 last week? Because its shares have tanked - down to a seventh of recent value.
It's easy, in such dire circumstances, for satire merchant Jon Stewart to ask 'What's black and white, and completely over?' The death of the newspaper itself has never seemed nearer. Yet keep hanging on to those exceptional circumstances of exceptional idiocy. Keep remembering that it's not one damned thing that has caused this crisis, but one damned thing after another.
And remember, too, what a little old-fashioned journalistic nous can still achieve. Newsweek magazine looked at the Wall Street Journal post-Rupert Murdoch the other day and pronounced it 'a fusty paper revitalised'. Cue Mr M himself, delivering a familiar lecture. 'The newspaper, or a very close electronic cousin, will always be around. It just may not be thrown on your front doorstep the way it is today.'
Now that, of course, may be wrong, too. But there's no telling at this point who's right. You can say that the chains have made a hash. Yet you can also say that, even now, some papers - take the FT, Guardian and Sunday Times from November's ABCs - are gaining rather than losing circulation. And the Sun trumpeted its biggest ad revenue issue ever a few days ago.
Which analysts saw that coming? Not Deloitte, whose prophecy of one in 10 US papers and magazines going to the wall made headlines last week. Not any of the high-priced gurus who advised Sam Zell, either. Call it, rather, an imperfect storm: and don't rush for the lifeboats.
Unseasonal greeting for the BBC's gifts
Pause, as the BBC offers a sackload of presents to its public-service rivals, and scratch your head over the process. Here's the know-how to make your own iPlayer, plus regional newsrooms to share with ITV, and Worldwide partnerships to keep Channel 4 happy. Newspapers won't need to pay for TV listings any more, and - in the wake of a quiet Telegraph deal - they'll be able to use BBC video on their own websites. Santa, you might suppose, has arrived a little early this year.
But no... C4 sees no 'immediate and financial sizeable upside here'. Other newspaper groups grumble about what the Telegraph's getting. The BBC Trust points out that it hasn't even blessed the plan yet.
There's general cynicism over the perception that Auntie is desperately trying to stop her licence fee being top-sliced away in the public service review that Ofcom has set in motion. And so a big offer turns into another sour shouting match.
There's the process problem. In any kind of sane commercial deal, the interested parties wouldn't be snarling at each other outside Ofcom's office. They'd be talking quietly in private. Newspapers would find they could have what the Telegraph's got, too. ITV might discover real prospects of newsroom sharing. And C4 could put its thinking cap on, rather than reach for the cold water bucket.
There could, in short, be careful negotiation, with the chance of partnerships properly explored: and maybe a deal at the end for Ofcom to sanctify, rather than impose.
Alas, though, all we seem to have is a shrill bidding session with instant appeals to the umpire. Partners in the so-called 'broadcasting community'? Not while all open roads lead to the regulator, and any true business discussion lands you straight in the ditch.
Worldwide news, local tragedies
The good news, as the year winds down, is that only 86 journalists around the globe died in the cause of duty. Only? Remember 2007, when 173 were shot, stabbed, blown up or otherwise killed. But there is bad news alongside such modest relief.
The journalism department at Cardiff University has begun producing extremely valuable analyses of International News Safety Institute figures, recording who's died where in what circumstances - and, more and more, the slaughter seems local. The 15 (and still counting) dead in Iraq this year are all local journalists.
Indeed, as you move round danger spots - India, Afghanistan, Somalia, China, Russia - you see clearly who's first in the firing line: largely, not Western correspondents with proper training, return air tickets and a circumspect editor, but local men and women serving local media, murdered in the alleys they call home. (The figures after eight months were 57 locals to five internationals, and that balance doesn't seem to have shifted.)
Anna Politkovskaya was not alone. From Mexico to Pakistan, it's brave men and women who turn over society's stones who then lose their lives. They die trying to tell the truth - 1,360 of them in the last 12 years, on INSI's reckoning. Carve their names with a salutary pride.
Craig Brown 'wittiest writer in Britain'
Craig Brown 'is the wittiest writer in Britain', according to Stephen Fry. He is also the most recently unemployed, after an utterly bizarre Telegraph decision to dump him. Lose 50 more journalists in a crunch? Re-summon Charles Moore to the colours and get him columnising twice a week? Such things may be reasonably understood when the devil drives. But Brown (who probably says nice things about Fry, too) is a pearl beyond price, a funny man of infinite resource. On any rational view, he's the last chap you should push overboard. But 'he was very expensive,' says a defensive Telegraph hand. Or perhaps he meant this was a very expensive mistake.
Source: Guardian UK
Five years ago, the idea that one national newspaper would entrust even its printing to the presses of its main rival would have been ridiculed. But this year production of the Telegraph titles shifted to the new and sophisticated Hertfordshire presses of the Times owner, News International.
It is a sign of the times, analysts say. In 2002, 12.8m national newspapers were sold on an average day. This year, it was fewer than 11m and in 2013 it will be slightly above 9m, according to Enders Analysis, the media research specialist.
Advertising revenue across national titles is predicted to fall from £1.9bn last year – a figure broadly flat over the previous five years – to £1.2bn within five years.
“There is no ‘out of the woods’ moment for the UK national press,” Enders analysts said in a recent note, “as the industry will reposition at a lower level of advertising revenue from 2010 and continue to decline.”
The conclusion of the Enders analysis is that, without consolidation or radical cost savings, nine titles under the aegis of the Independent, Mirror and Express groups, may face “divestment or even closure within six years”.
Hard times have made for strange bedfellows in what used to be Fleet Street. The diaspora of the 1980s, with newspaper groups leaving EC4 for Canary Wharf, Wapping, Kensington High Street and south of the Thames, is being reversed, albeit in a small way.
The migration of the Independent and Independent on Sunday’s staff to the Kensington HQ of Daily Mail & General Trust in January is seen by the people who run Britain’s newspapers as the first manifestation of an emerging trend.
“Some pretty bizarre conversations have been going on within our industry,” the head of one national newspaper organisation told the Financial Times. “The Express recently asked the Independent for an estimate of how much it would cost to provide business coverage for them.”
It is strongly rumoured that another group recently offered to provide full editorial coverage – news, sport, business, features and everything else – to a rival for a sum of money.
In such an extreme scenario, a newspaper would only need to employ a few designers and sub-editors to knock editions into shape and a small cadre of commentators and famous names to provide a distinctive voice. The offer was apparently politely declined, but on the grounds it was too expensive rather than unworkable.
A former British newspaper owner, who asked not to be named, said: “The plain truth is that there is an oversupply of newspapers and an undersupply of advertising revenue.
“But there is no lack of demand for information, for intelligent comment, for good journalistic writing. It is just a question of being innovative with regard to using the web and keeping your costs under as great control as possible.”
Douglas McCabe, one of the Enders analysts, said a catastrophic decline in national newspaper display advertising has combined with a structural change that has seen the internet emerge as a key rival. “What it means is meltdown for newspapers,” he said.
As a consequence, newspaper owners will need synergies and consolidation, if not of whole companies, then within groups or possibly alliances across the industry.
“God knows they have got to get together and have those sorts of conversations,” added Mr McCabe.
