The financial worth of newspapers, measured by rate of decay ... by gimleteye

Yesterday, McClatchy announced cost-cutting measures that must be very upsetting to Miami Herald employees. Publisher David Landsberg wrote a memo, "This morning, McClatchy announced that it is freezing its pension plans and temporarily suspending the company match to its 401(k) plans, effective March 31." Talk about distress signals.

Landsberg goes on, "Here at the Miami Herald Media Company, we have seen an unprecedented loss in advertising revenue, with quite a few of our retailers and auto dealers going out of business or leaving the area. In addition, employment advertising revenues continue to drop to all-time lows and real estate remains very weak. These challenges are clearly driven by a deepening recession that is hurting our economy. We are still developing our plan to address this extraordinary economic challenge."

I don't believe Landsberg has a plan, any more than his immediate predecessors did-- except to the extent it meant skewing the reporting of the news toward the paper's big advertisers. In its avoidance of reportage that alienated advertisers-- like the explosion of unsustainable development in South Miami Dade--the Herald and other mainstream media blinded themselves to the unfolding economic disaster built on unsustainable credit and the explosion of debt and also lost the trust of readers.

It is clear enough that the costs of newsprint and distribution can't outlast this economic crisis. The moment for private equity investors to step in and rescue small regional and local newspapers has passed; it's an unattractive scenario to measure the worth of a newspaper by its rate of decay.

There's a bigger issue: can democracy survive without print newspapers? I wonder if my fear is a generational bias. Perhaps the Herald needs to go all-electronic and all local with its reporting. Will advertisers trust that format?