the audit

Tuesday Links: Circulation, Mouthpieces, Galleon

October 27, 2009

One of the critical questions for what remains of the newspaper industry’s near-to-medium-term future is how much of the recent circulation collapse has been intentional. Newspaper companies spun the news yesterday that the huge falls were part of a strategy to cull unprofitable circulation and focus on core readers. That’s great if true, but is it? And if so, when does it stop?

Robert MacMillan of Reuters sneers at the newspapers’ line, noting they don’t talk about the customers who quit subscribing for other reasons. Mark Potts is equally skeptical and wonders how many lost subscribers were due to the dwindling quality of the papers, many of which have had their newsrooms gutted. There’s no doubt the papers overextended into unprofitable areas and with unprofitable subscription packages and have and are paring those back. But they’ve been using this excuse for some time now, and at a certain point and with some papers already, you could make the case that all circulation is unprofitable, in which case the industry can keep spinning as it withers.

If the industry really wants us to believe it, then it should show us some numbers.

— John Kay in the Financial Times continues to fight the regulatory acceptance of too-big-to-fail institutions, noting that:

The politicians they lobby sound increasingly like their mouthpieces, espousing the revisionist view that the crisis was caused by bad regulation. It was not: the crisis was caused by greedy and inept bank executives who failed to control activities they did not understand. While regulators may be at fault in not having acted sufficiently vigorously, the claim that they caused the crisis is as ludicrous as the claim that crime is caused by the indolence of the police.

— Matthew Goldstein of Reuters does some sleuthing in the Galleon hedge-fund insider-trading scandal, finding that one of its former portfolio manager’s outside activities would have raised red flags at most hedge funds and could be another example of the fund playing fast and loose with the rules.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.