About Me

  • I'm CEO of Newspeg.com, a social news-sharing platform. I've spent 20 years at the intersection of traditional and digital journalism. I've helped to invent ways to read and interact with the news and advertising on computer screens and iPads, and before that, I wrote news stories on typewriters and six-ply paper. I co-founded WashingtonPost.com and hyperlocal pioneers Backfence.com and GrowthSpur; served as editor of Philly.com; taught media entrepreneurship at the University of Maryland; and have done product-development and strategy consulting for all sorts of media and Internet companies. You can read more about me here.

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« For Crisis Sake | Main | Thinking Creatively...About Advertising »

November 16, 2008

Comments

InkStained

It occurs to me that the companies that put quality journalism ahead of profits, i.e. New York Times and Washington Post, are doing generally better than the average.

Mark Potts

InkStained: Not necessarily. As noted in the post, Washington Post stock benefits greatly from the company's investment in the Kaplan test-prep business, which actually bring in the majority of the company's revenue and profit. New York Times Co. also has diversified somewhat, most notably into Internet company About.com. Otherwise, their newspaper divisions are struggling just like everybody else's.

edward

A few quibbles. I don't see why Sir Rupert's holdings aren't included. Is this just an American newspaper problem, or a global problem. I think the latter, but newspapers overseas benefit greatly from relying more on circulation than their U.S. counterparts. This results in a perverse situation where American newspapers cut back outlying circulation to retain their core advertisement areas attractive to advertisers. Perhaps if the industry relied less on bloated ad revenues, and more on keeping readers, this "crisis" would not be as acute.
Secondly, you include Scripps, but fail to note that the company this year split in two, with HGTV, the Food Channel and Internet operations creating their own company. It is hardly fair to compare the current price of SSP stock to that of six months ago without noting this. If you put the pieces together, the stock is down, but hardly as dramatically as you state.
Thirdly, I would note the worst-performing stocks have something in common that is dragging them down, and that is debt. I believe what we are now facing is a product of over-leverage, and the newspaper industry unfortunately loaded up with debt in the glory days, and now faces the headaches of deleveraging. The distress of the newspaper stocks reflects agreement that many of these companies won't make it to the sunny shores when this recession ends.

Mark Potts

Edward: Murdoch's News Corp. is included, though, as noted, News Corp. consists of much more than newspapers. And the Scripps that is listed is the newspaper-only version, following the breakup earlier this year. Note the footnote--the numbers are adjusted for the breakup. It's as apples-to-apples a comparison as possible.

Rajiv Vindaloo

The WaPoCo is doing better (due to diversification, as noted above), but the NYTCo is not nearly as well-diversified. Henry Blodget wrote an excellent post last week (over on Clusterstock IIRC; I'm posting from an iPhone so I can't dig out and paste the link) that made a powerful argument to the effect that the NYT is in much deeper financial trouble than you would think from its stock price. Basically, it looks like they're going to have a hard time coming up with the cash to meet a humongous debt payment due next year ... Something like $100 million as I recall.

Honestly, the way Blodget wrote it (though he didn't say as much himself), you come away with the impression that the best thing the Times could do financially was to literally shut down the NYT altogether, sell off the Boston Globe and focus entirely on whatever else remains.

carl

Perhaps a gov't bail out is in order? Watch out auto companies!! LOL!

Solitude

Saying newspapers face Competition from the internet is much the same as saying horse drawn carriages face competition from automobiles.

It isn't the simple fact that there is an alternative that is the problem. It is the vast superiority of the alternative.

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