Web Only / Views » February 9, 2012
The Gray Lady’s Decline
As The New York Times ‘right-sizes’ its editorial staff, the death of print media approaches.
The Times is the Bank of America of American journalism. She's too big to fail, but she's listing with a cracked hull in a cold sea.
The nation’s most powerful newspaper, The New York Times, faces a sixth straight year of profit loss. The unions are forced to save editorial jobs by taking salary cuts. How does one make a living in print journalism anymore?
As Mike Elk reported last month on this website, in an effort to trim its overhead costs, in December the company froze the pensions of its foreign citizen employees and threatened to cut their health insurance benefits. A frozen pension means the company will no longer be contributing to that employee’s retirement account. The company is trying to cut pensions across the board, for both union and foreign nonunion employees, from The International Herald Tribune in Paris to foreign citizen Times staffers posted worldwide. (Contract talks with the Newspaper Guild union continue.)
For those who care about good reporting, high-quality journalism at the Times–the kind that lets Apple CEO Tim Cook know someone is watching how his company treats suicidal Chinese factory workers–is not disappearing. There will just be less of it. And the people who report it will earn less. In some places, like The Huffington Post, curious news junkie freelancers might even do it for free. At this point in the history of American journalism, it’s all just a matter of numbers and time.
The Times is the Bank of America of American journalism. She’s too big to fail, but she’s listing with a cracked hull in a cold sea. The 589 people who signed a Newspaper Guild letter to Times CEO Arthur Sulzberger Jr. on December 23 know this well. Sulzberger is “right-sizing” the paper, which means downsizing in market speak. Wages and benefits account for the bulk of the Times’ production costs, and they are falling. In the first nine months of 2011 ending September 25, the paper spent $373.1 million on wages and benefits, down from $376.2 million in the same period in 2010. Total revenues in 2011 are projected to be $233 billion, a 2.7 percent decline from 2010, when total revenue was $2.4 billion, even though the economy improved last year.
What’s happening? It’s not the economy. It’s us. We are no longer reading newspapers. In September 1998, the Times had around 1.06 million papers in distribution daily on a six-month average, according to the Audit Bureau of Circulations. By September 2010, it had about 876,000 papers in circulation. At The Boston Globe, also owned by the Times, circulation went from 470,000 in 1998 to 220,000 in 2010. The newspaper union accepted a 6-percent wage cut (original proposed cut was 23 percent) in 2009 to keep jobs. Despite this, the Globe remains a money-losing enterprise.
Management doesn’t know what to do. Reporters are faced with job insecurity and lackluster pay growth, if any growth at all. Shareholders aren’t happy either. The company has clearly become a bad investment; its share price is down more than 85 percent since 2004. The company itself is moving away from newspapers; in December it sold off its 16 regional newspapers (save the Globe) for just $143 million in cash.
The Times is the last bastion of investigative national journalism. Good articles take months and require a team effort of at least two people, a reporter and an editor with a stake in the article’s accuracy and impact. The paper produces (and hires) some of the best minds in the business. But it has a major problem, one that goes far beyond divides between ownership and unions.
What does it all mean? My hunch is that the company will get healthcare benefits concessions out of its overseas employees. The union cannot save them. Advertisers have more outlets to choose from and falling circulation forces them to look elsewhere, too. Already, the result is less money for journalism, and less pay for journalists and editors. Some will argue that the advertising model needs to be changed. Or maybe the old newspapers out there need state sponsorship. But a BBC-type public service model is unlikely in a country whose politicians make defunding National Public Radio a major budget-slashing goal.
Slowly but surely, there will be less coverage, more errors and less oversight at the Times. It’s already happened to once-mighty newspapers in Boston, Chicago, Los Angeles and Miami. The Times is the last hold out, unless the numbers improve.
In the mean time, there will be room for younger hires who can live on $39,000 a year in Boston, or $65,000 in New York. Senior level reporters will have to move to management in their 40s, or hope their book deal makes them rich before they’re 50. By then, most will be forced to abandon ship anyway, unless a miracle happens.
Correction: The original version of this story referred to “suicidal Taiwanese factory workers,” when in fact Apple contractor Foxconn’s factory complexes—in which some workers have committed suicide in recent years—are in China.
A longtime reporter and foreign correspondent for Dow Jones and the Wall Street Journal, Kenneth Rapoza is an In These Times columnist who writes about the news business. His work has also appeared in The American Prospect, The Nation and at Salon.com. He can be reached at [email protected]