April 23, 2009
She Broke the Pressmen's Union

I worked all my life as a reporter and an owner of newspapers, and a publisher of papers owned by others. David Simon (see the second post down) is correct in all respects. The owners called newspapers “franchises,” which should give you the idea.

Here’s a story: I was at a publishers’ convention when Katherine Graham entered the room to speak. I was standing beside the Knight brothers, of the old Knight Newspapers chain. They were very short and stood on their chairs to see her.

Hundreds of publishers rose cheering as Mrs.Graham went by. I heard one Knight brother say to the other, “They’re clapping because of Watergate aren’t they ?” The other answered, “Are you kidding? They’re clapping because she broke the pressmen’s union.”

I’ve heard publishers brag that they got a 40 percent profit from a few of their newspapers. Their newspapers were just horrid. The owners would talk a lot about “clean markets” meaning that the paper was a monopoly without unions. I could go on and on.

The point that I’ve been making for years is that the owners starved their papers big time. And when a strong competitor came along, they were so flustered, they decided the best defense was to give what was left of their product away.

Perhaps the newspaper, as we’ve known it, would have died anyway because of the web. But the owners’ overweening greed made the industry an easy mark. Even before the web, newspapers were going down hill fast, losing readership.

One newspaper circulation manager told me a few years ago that his department had to re-sell 25 percent of their circulation each year just to stay even. Now that same paper has a market penetration of only 35 percent of the households in its area.

Yet even today, as the papers cut and cut, the owners continue to demand 20 percent margins. They are eating themselves alive, screwing their readers, their advertisers, and their employees.

They have no answers. For instance, the chief executive of Lee Newspapers for the past decade decided to bury that otherwise strong company under a mountain of debt to buy the Pulitzer newspapers. Then it was trading at $36 a share; now it is 36 cents a share. She’s still the president, drawing a salary of millions.

The stories are endless.

But no longer is A. J. Liebling’s insightful remark —“Freedom of the press is guaranteed only to those who own one” — true. Now local news websites are popping up, at a startup cost which is 4.5 percent of the capital needed to start a daily.

A thousand young voices will rise up to challenge the remaining dailies and the newspaper business will soon become what it was when the founders wrote the Constitution: lots of “papers” in each town and city.



Posted by Bill Doolittle at April 23, 2009 11:02 AM
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I think the bloggified newsmedia will be better than the old paper newsprint media before long. If it isn't there already.

Posted by: Mahakal on April 23, 2009 12:40 PM
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