Monday, March 9, 2009

Newspapers circling the drain...

I worked at the Worcester Telegram & Gazette for a bit more then five years. The T&G was grouped together with the Boston Globe as the New England Media Group by their parent organization, the New York Times.

It was my favorite job ever and I doubt I'll ever have one that combines the interesting challenges with the terrific co-workers I had. Newspapers have a surprisingly complex workflow where many different, discrete pieces are brought together to produce the final product. From an Information Systems perspective, it's a really mentally stimulating industry.

Today clearly it's an industry circling the drain. While the industry would've been challenged by the economy and techonological changes, the true yoke around it's neck is the debt levels taken on over the last 20 years -- an example of the widespread use of capital in the U.S. in unproductive ways. Even when parent companies spent cash to buy other newspapers they did so at the cost of not making other, wiser investments. Money being spent to spend money, rather then careful and considered investments.

Does make you wonder how much greater our productivity gains from Information Systems over the last 25 years would've been had we not had so much poor and unproductive money shuffling going on.

Today TIME came out with an article on papers likely to go under soon, they figured 8 out of the following 10:

1. The Philadelphia Daily News.
2. The Minneapolis Star Tribune
3. The Miami Herald
4. The Detroit News
5. The Boston Globe
6. The San Francisco Chronicle
7. The Chicago Sun-Times
8. The New York Daily News
9. The Fort Worth Star-Telegram
10. The Cleveland Plain Dealer

Some I don't believe will disappear -- the Boston Globe needs a serious Chapter 11 bankruptcy reorganization to say the least, but it's a media market that needs someone to serve it.

My experience with the San Francisco Chronicle is only secondary -- they sold the T&G to the New York Times about a year before I joined the T&G. What I saw coming into the T&G is the past owners had been too frugal -- milking the profits while not making reasonable investments to improve efficiency. Assuming the Chronicle was run with similiar tight reins the most reasonable assumption to explain their current predicament is the debt load from Hearst's take over of them -- $660 Milllion for a paper with a circulation of 480,000.

To be continued...

1 comment:

Rebecca Foster said...

I saw this article as well. And I regularly read, which reports on such things in a snarky way. I am looking at buying a Kindle so I can download newspapers directly, insurance against the Chinese firewall. I don't know that I'll ever read a paper newspaper again, but I am still very interested in what they publish. They need to consider I am far from alone in this train of thought.