Fannin on the dotcom pillage

Not to get into that debate, either, because it's irrelevant to Fish's astute point -- the problem is not the profits NOW; it's the outlook 2-3 years from now that's a huge, huge problem ...

But the chain I work for has had at least one paper with profit margins of more than 30 percent very recently. And at least two of the other papers are above 20 percent.

 

Here's something to consider about those profit margins. Many do continue to operate at about 20 percent for their shareholders, but since ad revenue is down they're cutting the shit out of everything to maintain that margin - most importantly newshole and staff. Sooner than later there's going to be nothing left to cut ... and then what happens?

 

This thread is depressing the holy hell out of me. Somebody daub my tears and make me feel better.

 

Sorry to go George Allen on this but the future is now. The problem as I see it is that the profit margins are out of whack; to please Wall Street and shareholders, newspapers are forced to hit a "false" mark as a money maker. NEWSPAPERS ARE NOT LOSING MONEY. If that was the case then I could see crying gloom and doom. The problem in the future is to maintain the false profit margins newspapers are shrinking instead of expanding. Ya gotta spend money to make money, folks.

 

Actually, I think something good will eventually come out of the ashes. It's all cyclical. Big chains have just about bought all the newspapers, shareholders have just about squeezed them dry and then what? I think you'll see smaller companies man up and buy the local newspapers and go back to making a solid profit off of local advertising until the big companies come back ...

Just a theory.

 

If they're worried about profit margins eroding, then invest some back into the product.

Only complete morons would look at the situation and say, "Well, shit, we only made 20 percent this year instead of 25, and our core customers are getting older.

Let's offer them less for their money. Cut some staff."

 

'Zactly, Zeke.

 

Maybe I'm missing something or nodded off during my last corporate session. I have a feeling that those here describing robust margins are papers with parents that have multiple holdings (i.e. television, radio, etc.). Their companies are stronger than 20% profit. But, I would be amazed if a paper is still swinging 20%. Perhaps, the last two quarters. The last two quarters saw significant drop in newsprint.

We'll get a better idea of the hard numbers after the 4th quarter ends and those public companies file their year-enders with the SEC.

 

Write brained again sums it up succinctly, perfectly.
It's the "nick-a-vein" mentality that's killing us. We're cutting ourselves -- nicking our veins -- and we're still alive, but time and further cuts will make us weaker.

 

I would be careful quoting or citing John Carroll and Dean Baquet. Although wonderful editors, that paper still hasn't recovered -- any may never -- from their spending and strategy of closing county bureaus and eliminating most of the local coverage from that paper.

Oh, and this...30%? Does this sound like a paper with a 30% profit margin?
I love the euphemisms throughout for "layoffs."

 

And, Buck.
We've long worn the same uniform on this issue.
I don't argue papers' profitability now -- other than exaggeration or misrepresentation of that profitability. I hate being or representing a doomsayer. It's really not my personality.
But, it troubles me to see so many not realizing the degradation of our profession, my profession. And if we don't remedy our shortfalls and refocus our efforts now, our mission will be for not.

 

I think a lot of papers are spending more money to make money - just not in the areas WE would like them to. They're losing advertising, so they spend more money on circulation and advertising initiatives that range from desperate to gimmicky. A lot more money is going toward the internet for that very reason.

It's another reason for layoffs and hiring freezes on the content side. Obviously, we all feel that spending money to make the editorial product better is the way to go, but that strategy is probably too long-term and a bit risky for execs.