Not a journalism crisis. Not a newspaper crisis. Not even so much a revenue crisis. If you or I ran our businesses this way, we’d be justifiably told by everyone on the planet that we werescrewups:
equivalent of 50 full-time jobs. But the deteoriating economy has made
the paper’s financial outlook much worse. Management told union leaders
Thursday that the Globe will lose $85 million in 2009, unless serious
cutbacks are made, according to a Globe employee briefed on the
discussions. Last year the paper lost an estimated $50 million, the
employee said.
The Times Co. is seeking concessions from the union because the New
York company, which is also suffering from the recession, can no longer
subsidize the Globe’s losses, said the Globe employee who requested
anonymity because the person is not authorized to speak publicly. The
Times Co. posted a net loss of $57.8 million in 2008.
It shouldn’t have taken this long to start addressing problems with the way newspapers are funded and run. Look, I’ve been hearing that print will be dead, that newspapers are losing money, that the cost of newsprint was going up, that we all had to take no raises or small raises or pay cuts or a lack of bonuses or buy our own admission to the company Christmas party, for YEARS. Decades, even. The golden age of newspapers — whenever that was, usually about 10 years before the person being lectured at about them arrived — was supposedly long gone forever ago, but somehow nobody addressed this growing crisis until just this particular moment, when people were already so hosed that they had no other way out?
Let’s simplify this, shall we? For years newspaper companies made decisions based on the assumption that ad revenue would not just remain stable but would continue to grow at the rate it had always grown. Companies bought more property, made promises to their shareholders, expanded their operations, all based on the idea that not only were times good, they’d continue to get better. Forever. That’s idiotic. Do you or does anyone else you know operate a business, hell, operate alife, this way? It’s insane. They didn’t save during the good times and now the bad times are here, and everybody on the planet saw them coming, except for maybe the 200 or so people across the newspaper industry who could have done something about them. That’s either incompetence so staggering it should disqualify the possessor from ownership of a KFC franchise, or a willful blindness to reality for which they should be called to account.
And NOW? Now they want to whine in public about how nobody reads anymore and their product is unprofitable crap, and thenthey wonder why they can’t find buyers and investors for their papers. Would you buy something from someone who appeared to dislike it this much? I mean, I would, but I’ve seen first-hand how a good newspaper can be run and can make money (yes, even in the Internet age). If you’re Daddy Warbucks who’s never owned a newspaper in your life and you’re listening to a sales pitch that is basically, “This thing will never make money because it used to be good but now it sucks and people don’t want it because they’ve been told for years that they shouldn’t want it because it sucks, so won’t you sink your life savings up in this bitch?” your response is, justifiably, “I think I will go and purchase a fish and chip shop, or a bookstore, or some other business whose owners seem to like it fine.”
A.
I have had a number of conversations along these lines. They usually go like this:
Me: Why the fuck would you borrow millions of dollars under the presumption that unsustainable growth rates would continue when THEY’D ALREADY STOPPED CONTINUING?
Interlocutor: Because a lot of other smart rich people were doing it too.
Me: You don’t think it was a mistake? Seriously?
Interlocutor: Rich people don’t make mistakes.
[That last bit is inference, but you get the drift.]
when will CEO’s and the corporate board be asked for concessions?
pansypoo: good question
And yeah, whenever I see stories like this it always seems to be some industry/business that had a run of ridiculous profits and growth rates, and both projected them to go on forever and overspent-overborrowed even if those rates did go on forever.
As Athenae writes, I am pretty sure you can still have a profitable paper, just not crazy super-profit and not with the massive debt loads these people took on.