I’m long overdue for an update, and for that I owe you an apology. Several posts are in the works–I’m having trouble keeping my internal editor under control. In the meantime, I’m fascinated by this 1995 Philip Meyer essay on newspaper profitability.
It’s about how publicly traded companies are tempted to slash newsrooms, kill the goose that lays the golden eggs, blah blah blah. All quite true, and it makes good reading along those lines. But here’s the crazy passage:
Whether very many newspapers will spend the money to wholeheartedly practice genuine public journalism remains to be seen. The short-term economic pressures are against them. The first scenario produces visible and immediate rewards while the costs are hidden and distant. The second yields immediate costs and distant benefits. …
Take the case of a long term-oriented, nurturing company like Knight-Ridder. With total average daily circulation of 3.6 million, its newspapers would bring a total of $6.5 billion if sold separately at an average value of $1,800 per paying reader. (McClatchy paid the Daniels family more than $2,400 per unit of circulation for Raleigh’s News & Observer, but Raleigh is a better than average market). With 52.9 million shares outstanding at the 1994-95 high price of $61 per share, the entire company, including its non-newspaper properties, is valued by its investors at only $3.2 billion or around half the break-up value.