From two to one to zero

Maybe not at these prices, but you can't underestimate the power of the brand name. At least when the San Francisco Chronicle calls, the person on the other line knows what it is. That alone isn't going to save seven-day-a-week printed papers, but it's something that can be leveraged. Into what, who knows?

 

Even if a newspaper or newspaper chain is making a 10 percent profit, but needs to make at least 20 percent to pay off its loans, then the newspaper is working in a business model with diminishing returns. I would imagine most newspapers owners were used to 30 percent profits and leveraged their debt using that threshold. Thus the dilemma. A 10 percent profit margin is healthy for most businesses, except those that need to make 30 percent to pay off their loans.

 

Like the rest of the country, the newspaper industry is starting to pay for spending money it didn't have to begin with.