In today’s Wall Street Journal, McClatchy Chairman and CEO Gary Pruitt defends his company’s decision this week to spend $6.5 billion to buy newspaper conglomerate Knight Ridder. Pruitt argues that “newspapers are still among the best media businesses — and the most important.” He seems quite sanguine about the economic prospects of the business — particularly in the face of the fact that McClatchy’s stock lost about 5 percent of its value as investors headed south in the three days after the acquisition.


Pruitt has had a golden career to date, without a misstep of any magnitude. But while Pruitt’s heart may be in the right place (after all, we’re not exactly rooting for the death of newspapers here at CJR Daily), we’re sorry to report that his arguments this time around boil down to little more than hype and spin.


Pruitt writes that “circulation began dropping at a rate of 1 percent every year from 1990 to 2002. Certainly as a percentage of households, newspaper readership has fallen considerably. Meantime, total newspaper advertising volume peaked in 2000 and has slipped 4 percent, according to the Newspaper Association of America.”


But he fails to also note that print circulation declines appear to be accelerating. In November 2005, the Audit Bureau of Circulations reported that newspaper circulation fell at a rate of 2.6 percent per year between April and September of last year. All but two of the top 20 circulation newspapers lost circulation over that same time; the San Francisco Chronicle lost more than 16 percent. Meanwhile, advertising revenue, adjusted for inflation, has been extremely stagnant. As the Wall Street Journal pointed out, over the last 18 years it has increased only 4.4 percent — versus 161 percent growth in GDP.


Pruitt argues that “no competitor in local markets has held onto audience as well as newspapers have. Others proliferate — more TV channels, more radio stations, infinitely more Web sites — but the number of daily papers stays steady. While we rarely face direct competition, our competitors see more all the time.” While Pruitt sees this as a good thing, it’s not — the reason media investors are pouring more money into television and not into newspapers is that the market for television is expanding, while the market for newspapers isn’t. And, truth be told, newspapers are competing against the new media outlets for advertising dollars — and losing.


Pruitt tries to buttress his point with an analogy: “When the Steelers faced off against the Seahawks in SuperBowl XL last month, 90.7 million people turned in, television’s best day of the year. But on that Sunday — indeed, on an average Sunday in 2004-2005 — about 124 million people read the Sunday newspaper. Look at it this way: We won Super Sunday, 12-9.”


That’s just disingenuous. Look at it another way: a single broadcast of a football game attracted as many people as every Sunday newspaper in the entire country put together — all 900 of them. (About 141 million people watched at least six minutes of the game.) And then think about the costs of putting out those 900 newspapers, versus the cost of a single TV broadcast (for which ABC charged about $2.5 million per 30-second spot).


Pruitt writes that, “Even among young people, supposedly lost to newspapers forever, 39 percent read weekday papers and 49 percent read on Sunday.” But that, too, is on the decline. A Carnegie Reporter study noted that, based on Newspaper Association of America data, the number of 30-to-39-year-olds reading papers every day from 73 percent in 1972 to 30 percent in 1998, and daily readership among 18-to-24-year-olds dropped 14 percent just between 1997 and 2000. (According to a Washington Post focus group reported on by the Washington City Paper, young people wouldn’t even want a paper if is were given to them for free — because they wouldn’t want old newspapers cluttering up their apartments.)


Finally, Pruitt writes that “Adding the unduplicated reach of newspaper Web sites to newspaper readership shows that, far from shrinking, our audiences are growing steadily. Simply put, more people want our products today than wanted them yesterday; this is hardly the profile of a dying industry.”


But, as Pruitt should know, the problem isn’t a matter of demand; the real problem is that online readers aren’t as valuable to newspapers as print readers are. That’s because while readers have moved online, the ad dollars that support newspapers haven’t migrated to the Internet as quickly. (Pruitt also writes that newspapers “have competition from Google and others,” which at this point in time is simply silly; by making online information searchable and linking to newspaper stories on Google News, Google is probably helping newspapers by driving traffic to their Web sites.)


Newspapers face both the grim reality of declining print circulations, and the challenge of monetizing online readership.


And maybe they’ll crack that equation. As Maxwell King, former editor of the Philadelphia Inquirer, recently observed, “[S]omeday, somewhere, someone very sharp is going to figure out how to re-attach revenue to content generation. Then, boom, we’ll have a new media that is viable. I hope we live to see it.”


But Wall Street is betting that we won’t; that newspapers won’t be able to figure out the right way out of a dark tunnel. We devoutly hope that The Street is wrong — but it’s going to take a lot more than cherry-picked statistics, false analogies and wishful thinking on Gary Pruitt’s part to make tomorrow work.


We wish him luck.

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Bryan Keefer was CJR Daily’s deputy managing editor.