Newspaper Closings, Buyouts, Layoffs, And The Future

Jan 1, 2007

 As the newspaper industry enters a new year searching for new ways to find more readers, younger readers, and hopefully make some money (or stop losing so much of it), as circulation continues to decline and advertising losses grow while long-standing newspaper chains dissolve and individual newspapers are sold off – because investors what a bigger return on their money – there’s more bad employment and economic news for journalists.

On Friday the King County Journal in Kent, WA, announced that it’s closing on January 21, putting 40 full-time employees of the daily newspaper on the streets, just weeks after new owners Black Press Ltd. bought the paper, and in Ohio several newspapers owned by Cox Ohio Publishing, including the Dayton Daily News, were restructured and staff positions were reduced after more than 100 employees were offered early retirement buyouts.

Based in Victoria, BC, Black Press purchased the King County Journal and its nine affiliated non-daily newspapers in November from Horvitz Newspapers. The new owners said the Journal had been losing money for years, and after the Journal’s closing their nine twice-monthly newspapers will begin publishing twice a week. But even with these changes, 40 of the Journal’s newsroom employees will still be laid off.

The Seattle Times reports that the King County Journal was Washington’s eighth-largest newspaper, and that when it ceases publication in January it will be the first time in more than 30 years that there’s no daily newspaper being published in the county’s fastest-growing suburbs.

Buyouts, layoffs, financial losses, and newpaper closings were an end-of-the-year theme at other American papers as well.

In October, The Mercury News in San Jose, CA, laid off 8.5 percent of its workforce, a little more than 100 employees, the second time in less than a year it reduced staff. In November 2005 it offered voluntary buyouts to 52 newsroom employees.

And in Toledo, OH, the general manager of The Toledo Blade says the newspaper will end the year losing close to $5 million dollars, and that wage and benefit concessions must come from their union workers in eight different bargaining units in order for the paper to make money in the future. About 200 workers from five of the paper’s unions have been locked out of work for more than five months now in contract disputes.

Faced with dwindling revenue, some newspaper publishers are trying to cross lines that have never been crossed before in journalism. At The Indianapolis Star managers revamping the newsroom had asked unionized news employees to write advertising copy, an ethical consideration that is considered taboo in traditional journalism circles. The strange request seemed to come in the face of disappearing advertising and drastic measures to cut costs, and it was building toward a labor dispute when Star managers announced on December 20 that, for now, newsroom staff would not be required to write advertising copy for “advertorials.” At the same time, they refused to rule out the possibility of it being requested again at some point in the future, according to reports in The Indiana Business Journal.

The Project for Excellence in Journalism reports that newspaper circulation losses that started building slowly over a fifteen year period began to really accelerate in 2004, then got three times worse in 2005, and in 2006 newspaper publishers’ best hopes were not about solving the problem but instead were to find a way to “slow the bleeding.” In that last two year period, daily circulation fell 3.5 percent and Sunday circulation fell 4.6 percent. The Project reports that the biggest papers were the hardest hit, with the top 50 papers losing up to 4.2 percent of their daily circulation. And at the same time about 1 percent of American newspapers go out of business yearly.

At Columbia University in New York, Maury M. Breecher reports that more than half of America’s newspapers have Internet versions of themselves, that one-third of the newspaper Web sites are allowed to “scoop” the print version, and that up to 20 percent of newspapers’ Web sites say that at least half of their content is original, and not repackaged from the print version, up from 7 percent reported in 1996.

As to where newspapers spend their money, Breecher reports that newspapers today spend up to 75 percent of their gross income buying newsprint, and then printing and delivering the paper. For owners looking to cut costs while attracting younger readers online, it’s easy to see how an expense as large as three-quarters of the revenue pie can become a target for the financial analysts.

According to the Project for Excellence in Journalism’s surveys, the shift to online news reading is only a part of the circulation problem. While online newspaper readership rose 15.8 percent from September 2004 to September 2005, the project says there’s also a steady trend growing where seven-day subscribers are switching to be occasional buyers of the newspaper. Also, readers are turning to niche and youth publications that are distributed for free, often in transportation hubs.

The argument about whether newspapers of the future will still be printed on paper or are only available online is one that’s not likely to be resolved in the coming year. But meanwhile, in the central lowlands of Scotland, scientists in Paisley have been working on what they call the “newspaper of the future,” an iPod-like computer for reading news. Developed at Paisley University’s Thin Film Centre, in partnership with DuPoint-Teijin Films and Plastic Logic, and funded by a nearly $500,000 grant, the developers say the pocket-sized device can be used to download a newspaper in the morning and receive updates throughout the day. - Donald Winslow