Newspapers: Dying All the Way to the Bank

Print journalists tend to be a pessimistic bunch, but with Knight Ridder’s likely sale imminent, bloggers are taking care of the doom and gloom quite nicely by themselves.

Mainstream media print journalists tend to be a pessimistic bunch, especially when it comes to newspaper companies and, say, their future. But with Knight Ridder’s likely sale imminent, bloggers are taking care of the doom and gloom quite nicely by themselves this week.

With bids for the nation’s second-largest newspaper company due today, the New York Times reports that when Knight Ridder’s fate is determined, “the future of what has come to be known as the mainstream media could become clearer.” “Low bids would suggest pessimism about the prospects for newspapers,” says the Times, while “[h]igh bids would indicate more optimism for their future.”

More starkly, the Associated Press calls this “a moment of reckoning for the newspaper industry, a time when one of their biggest players will find out just what others are willing to pay for it.”

Taking things further still, a number of bloggers are magnifying the fretting and painting an even bleaker downside than either the Times or AP. “Are Newspapers Still Viable?” wonders Writeside First Draft. The absence of an acceptable bid for Knight Ridder “would send a depressing signal about the newspaper industry’s future,” writes the blogger, who then highlights two very different “possible outcomes” if the chain is indeed sold: “If Gannett, the country’s largest newspaper chain, is successful in acquiring Knight Ridder, it is widely felt that costs will be slashed to the bone and beyond, and that journalistic quality will suffer. Everyone would prefer a successful bid by the smaller McClatchy Company, which has a reputation for quality journalism.”

The main question, says Writeside, is “how well will newspapers in general hold up during the transition from old media to new — is print still viable? Knight Ridder’s fate may provide an early answer.”

“Knight Ridder’s sale could be decided at any moment. The future of MSM hangs in the balance,” opines Medialoper. “Kind of makes you want to buy tickets.” John Burke at Editors Weblog thinks McClatchy and Gannett’s offers “could sink or swim the entire industry.” “If bids are high, it will mean that investors still have confidence in the continued health of the American newspaper market,” Burke writes. “But if low, not only is Knight Ridder unlikely to sell, it could also mean that the future of newspaper companies is bleak.” Meantime, over in Britain, Blog Watches Dog is equally dramatic, calling this “a defining week for the American newspaper industry.” “If the bids are high, it would indicate that Wall Street has not given up on the newspaper industry despite all the gloomy predictions,” says Blog Watches Dog, while the lack of an acceptable bid “will be bad news.”

Clearly, the outcome of the Knight Ridder situation is incredibly important. But both the Times story and a Los Angeles Times report conspicuously did not jump to any conclusions about newspapers’ fate as a whole, and we will not either.

To us, what James Naughton, a former executive editor of the Philadelphia Inquirer, told the New York Times was more on the mark. Naughton, who recently retired as head of the Poynter Institute for Media Studies, put it this way:

“My concern is that it will be considered a referendum on the news business rather than an acknowledgment of what it really is — the failure of Knight Ridder many years ago to protect itself [from a takeover, hostile or otherwise] in the way it organized its stock … I don’t know that [an impending sale] speaks to the wider issue of whether there is money to be made in newspapers because the answer is yes, a lot.”

Indeed, Knight Ridder’s profit margin in 2004 — profits as a percentage of revenue — was a robust 19.3 percent. That’s less than Gannett, which owns newspapers with margins of 30 percent or more — but, in truth, many a business owner would consider an enterprise where 19 cents of every dollar taken in flows to profit to be a veritable money machine.

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Edward B. Colby was a writer at CJR Daily.