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The End of News?

Christian bloggers are part of a growing group of Christian news providers. As Mariah Blake reported in the May/ June Columbia Journalism Review, the Christian Broadcasting Network, home to Pat Robertson’s 700 Club, today employs more than a thousand people working at stations in three US cities and several foreign countries. Evangelicals control six national TV networks and some two thousand religious radio stations. “Thanks to Christian radio’s rapid growth,” Blake observes, “religious stations now outnumber every other format except country music and news-talk”—the latter category, as we have seen, also overwhelmingly dominated by the right.

For three years before the Terri Schiavo case got national attention, it was constantly discussed on Christian stations, which sought to frame the issue as one of activist judges who were not upholding the sanctity of life. Soon after Bush was elected in 2000, directors of the National Religious Broadcasters were invited to meet the President and John Ashcroft, and the group has held monthly conference calls with the White House ever since. All in all, Blake observes, evangelical broadcasters have “remained hidden in plain sight—a powerful but largely unnoticed force shaping American politics and culture.”

The rapid growth of conservative outlets for commentary has contributed to a siege mentality among journalists. Steve Lovelady, who edits CJR Daily, a blog sponsored by the Columbia Journalism Review, told me that based on the frequent e-mails he receives from editors and reporters around the country, he thinks that newsrooms are in a state of “growing panic.” Journalists “feel like they’ve never been under greater attack,” Lovelady says. “Press criticism seems harsher and more accusatory than it used to be.”

In addition to feeling under attack from without, Lovelady adds, journalists feel threatened from within. In previous decades, the major newspapers were mostly owned by family-run companies, which usually insulated newsrooms from the vicissitudes of the stock market. Today, most newspapers are owned by large publicly held corporations, for which profit margins are increasingly more important than investment in better reporting. This has sapped news organizations of their ability to defend themselves at precisely the moment they need it most.

3.

The much-discussed fortunes of the Los Angeles Times are a case in point. For more than four generations, the paper was published by members of the Chandler family, who were controlling shareholders of the Times Mirror Company, which, in addition to the Times, owned Newsday, the Baltimore Sun, and the Hartford Courant. In 2000, however, Times Mirror was bought by the Chicago-based Tribune Company, a huge corporation that had become accustomed to 30 percent annual profit margins. (In addition to the Chicago Tribune and the Los Angeles Times, the Tribune Company owns nine other papers, twenty-six television stations, a 22 percent share in the WB television network, and the Chicago Cubs baseball team.)

The purchase came shortly after the revelation that top executives at the Los Angeles Times had approved a deal with the Staples Center to share the advertising proceeds from a special section about the sports and entertainment arena, an arrangement widely criticized as breaching the traditional wall between news and business. At first, Tribune executives seemed committed to restoring the Times‘s strong reputation, as reflected in their decision to hire John Carroll, the widely respected editor of the Baltimore Sun, as the paper’s new editor. And Carroll came through: in 2004, the paper won five Pulitzer Prizes, the second most ever for a paper (after the seven won by The New York Times in 2002). Financially, though, the paper was still feeling the effects of the 2000 recession, with advertising revenue sharply declining and circulation dropping well below its traditional level of more than one million.

The paper continued to be very profitable, but its margins had dipped below the 20 to 25 percent it had achieved in its most prosperous years. At the same time, the paper had come under heavy attack from southern California bloggers such as Hugh Hewitt, who portrayed it as liberal, lofty, and out of touch. According to Ken Auletta, in The New Yorker, more than a thousand Los Angeles Times readers canceled their subscriptions after the paper ran a story critical of Arnold Schwarzenegger just before the 2003 recall election that brought him to office.6

Between 2000 and 2004, the Tribune Company extracted some $130 million from the paper’s annual billion-dollar budget. Then, weeks after the 2004 Pulitzer Prizes were announced, Tribune executives informed Carroll that further cuts were needed, and over the summer more than sixty staff members took voluntary buyouts or were laid off. The Washington bureau lost 10 percent of its staff, and those who remained were assigned to a new office along with the much-reduced Washington bureaus of the Chicago Tribune, Baltimore Sun, Newsday, and other Tribune papers. The cutbacks have made it harder for reporters at these papers to meet their daily deadlines, much less undertake in-depth reporting. In July of this year, in the face of demands for more cuts, Carroll resigned from the Times.

The developments at the Tribune Company mirror those in the newspaper industry as a whole. For most big-city papers, circulation is declining, advertising is shrinking, and reporters and editors are being let go. The full extent of the crisis became apparent in May, when the Audit Bureau of Circulations reported circulation figures for 814 daily papers for the six months ending last March. Compared to the same period the year before, total daily circulation fell by 1.9 percent and Sunday circulation by 2.5 percent. Sunday circulation fell by 2 percent at The Boston Globe, 3.3 percent at the Philadelphia Inquirer, 4.7 percent at the Chicago Tribune, and 8.5 percent at the Baltimore Sun. At the Los Angeles Times, circulation fell 6.4 percent daily and 7.9 percent on Sundays. Even The Washington Post, the dominant paper in a region of strong economic growth, has suffered a 5.2 percent daily circulation decline over a two-year period.

There are a few exceptions. The New York Times and USA Today, both national newspapers, have had modest circulation gains. Even so, the New York Times Company announced in October that it was going to eliminate five hundred jobs, including forty-five in the Times newsroom and thirty-five in the newsroom of The Boston Globe. (The Globe recently announced that it was dismantling its national desk.) The Wall Street Journal has been holding its own in circulation, but its ad revenues have sharply declined.

It is a striking paradox, however, that newspapers, for all their problems, remain huge moneymakers. In 2004, the industry’s average profit margin was 20.5 percent. Some papers routinely earn in excess of 30 percent. By comparison, the average profit margin for the Fortune 500 in 2004 was about 6 percent. If the Los Angeles Times were allowed to operate at a 10 to 15 percent margin, John Carroll told me earlier this year, “it would be a juggernaut.”

Back in the 1970s and 1980s, when most papers went public, they had little trouble maintaining such levels. Many enjoyed a monopoly in their markets, and realtors, car dealers, and local stores had no choice except to advertise in them. The introduction of new printing technology helped to reduce labor costs and to shift power away from unions and toward management. But papers have since faced successive waves of new competition—first from TV, then from cable, and now from the Internet. Yet Wall Street continues to demand the same high profits. “Of all the concerns facing newspapers,” Carroll told me,

I’m most worried about cost cutting. Many CEOs are in a hard place, having to deliver short-term financial results or, most likely, get fired. Newspapers are very profitable, but their growth is slow, which means incessant cost cutting to meet Wall Street’s expectations. The cost cutting leads to weaker journalism—fewer reporters, fewer photographers, fewer editors, fewer pages in the paper.

Gene Roberts, a former editor of the Philadelphia Inquirer who left that paper over ongoing demands for cuts in his news operation, says that cutting news budgets to hit profit targets is a form of “systematic suicide.” How can newspapers continue to insist on annual profit margins of 25 to 30 percent “and remain appealing to readers?” he asked. He argues that newspapers should respond to the increasing competition by investing more, not less, in newsrooms: “I think most papers could easily get their circulations up—maybe not gigantically, but they could certainly stop the erosion and head in the other direction if they served their readers better.”

But many experts on the newspaper business are not convinced. John Morton, a well-known newspaper analyst, points out that some very well-run companies, such as The Washington Post, have hired more reporters, foreign correspondents, and editors, yet continue to lose circulation. The reason, he says, is clear: the disappearance of young readers. “It is the fundamental problem facing the industry,” Morton says. “It’s probably not going away. And no one has figured a way out.”

4.

The full extent of this problem is described in Tuned Out: Why Americans Under 40 Don’t Follow the News, by David T.Z. Mindich.7 A former assignment editor for CNN who now teaches journalism at St. Michael’s College in Vermont, Mindich writes that while more than 70 percent of older Americans read a newspaper every day, fewer than 20 percent of young Americans do. As a result, he writes, “America is facing the greatest exodus of informed citizenship in its history.” Of twenty-three students asked to name as many members of the Supreme Court as they could, eighteen could not name even one. It is frequently argued that young people are always less interested than their parents in following the news; as they get older, they’ll undoubtedly become more engaged. Mindich thinks not. In the 1950s and 1960s, he observes, “young people were nearly as informed about news and politics as their elders were.” If young people aren’t reading newspapers now, he argues, there’s a good chance they won’t as adults.

All eyes are now on the Internet. Even as paid circulation has dwindled at many papers, the number of visits to their Web sites has soared. Both nytimes.com and washingtonpost.com rank among the top twenty on-line global news sites; in September, the Times site received visits from more than 21 million different users. Because these sites are mostly free, however, many readers have switched to them from print editions, which can cost several hundred dollars for an annual subscription. But there is no clear indication that young people are more likely to read news on the Internet than in print. According to Mindich, only 11 percent of young adults in a recent survey cited the Internet as a major source of news. Moreover, with the exception of The Wall Street Journal, which runs a profitable subscription-only Web site, newspapers have until now failed to establish an on-line presence for which readers are willing to pay. In September, the New York Times Web site launched “TimesSelect,” a new premium service that charges $49.95 a year for access to the paper’s archives and select Op-Ed-page commentary (except for subscribers, for whom access is free). But it remains unclear whether such a service will generate significant revenue.

For the Web to become profitable, it will need to be supported by advertising. To date, the returns here have been modest, but they are growing. This year, for instance, latimes.com expects to take in $50 million, with ad revenues doubling in each of the next few years. In the long term, most observers agree, the future of newspapers lies with the Web, where transmitting the news requires no expensive newsprint, delivery trucks, or union drivers. The question is, can the Internet generate revenue—and readers—fast enough to make up for the shortfalls from print?

If the newspaper industry continues to shrink in response to the unrealistic expectations of Wall Street, the loss would be incalculable. The major metropolitan dailies, for all their faults, are the main collectors and distributors of news in America. The TV networks, to the extent they still offer serious hard news coverage, get many of their story ideas from papers such as The New York Times, The Washington Post, The Wall Street Journal, the Los Angeles Times, USA Today, The Boston Globe, and The Christian Science Monitor. Even the bloggers who so hate the “mainstream media” get much of their raw material from it. If the leading newspapers lose their capacity to report and conduct inquiries, the American public will become even more susceptible to the manipulations and deceptions of those in power.

The central question, in light of these difficulties, is how the press will respond. The environment in which the press works is often inhospitable, but it’s precisely in times of crisis and upheaval that some of the best journalism gets done. Unfortunately, a look at the press’s recent performance—including that of our leading newspapers—is not encouraging. As I will try to show in a subsequent article, news organizations, rather than push back against the forces confronting them, have too often retreated andacquiesced.

—This is the first of two articles.

Letters

The End of News?’ March 23, 2006

  1. 6

    See “Fault Line,” The New Yorker, October 10, 2005.

  2. 7

    Oxford University Press, 2004.

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