Conventional wisdom on newspapers: Even though they’re in steep decline, they’re still useful cash-generators — for owners who aren’t choking on debt and who aren’t expecting preposterous returns. But newspaper observer Alan Mutter, taking stock of two proposed sales, says things may be changing. Even owners who don’t have to sell now want to dump their assets:
The potential sale of the San Diego Union-Tribune and Newark Star-Ledger at the worst time in the history of newspapering can mean only one thing: The publishers don’t think the business will get any better.
If they did, they would slash expenses, hunker down and quietly prepare to sell their papers during the next rebound in the economy.
With the publishers deciding, instead, to pursue potential exits at a time buyers are few and far between, the irresistible conclusion is that they foresee only a steady wasting of the assets they have held for multiple generations. Their willingness to consider dumping their papers at what most likely would be fire-sale prices amounts to a repudiation of the business that built their family fortunes.
Because Copley and Advance do not appear to be under pressure to divest assets to raise cash to pay down debt, they would seem to be in a position to wait for a more propitious time to sell. Their lack of patience suggests a lack of confidence that better days lie ahead, at least with respect to these two properites.
On a parallel track, the NYT’s David Carr, preparing to eulogize the Star-Ledger, also notes that this paper’s story is different than the ones we’ve been used to hearing:
This is the place in the column where the knowing scold would point the finger at the evil, greedy owners and talk about their relentless pursuit of profits above all else. That’s some other column. The Newhouse newspaper chain, which also said last week that it would shut down its news service in Washington after the presidential election, owns 27 newspapers and has managed to manoeuvre through the past few years of downturns without brutal cuts or a major diminishment in journalistic ambitions. It has also invested in papers to the point where many of them are regional standouts, including The Oregonian in Portland, and The Times-Picayune in New Orleans, where it financed and supported the paper even as many businesses — much of the advertising base — deserted the place.
But history and goodwill protecting newspapers from plummeting ad revenue — ask the storied Washington Post, which saw print ads drop 22% last quarter.
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