This week's bankruptcy filing by the Tribune Co. was a landmark event, one of those "it can't really happen" moments that brought renewed attention–especially outside the industry–to the plight of newspapers. While there are unique elements to Tribune's problems, it's nonetheless the first of many similar game-changing shockwaves that are likely to roll through the newspaper industry in coming months. The industry landscape may look very different a year from now.
The structural changes wrought by the Internet are real and will continue; they're being multiplied by the worst advertising market in a generation, which has only begun to rock newspapers' already fragile balance sheets. Anybody in the advertising or media business will tell you that the past couple of months have been devastating; things may get worse after Christmas, as a wave of bankruptcies ripple through retailers who are suffering from poor holiday sales because of the ailing economy. Entire industries that are key sources of advertising, like autos and banks, are down on their heels, and the economic problems are deepening the already bleak outlook for real estate and job classifieds. It's not a pretty sight, and it's going to mean a lot more pain for newspapers as we head into the new year.
So let's look at a few of the doomsday scenarios we're likely to see among the nation's major newspapers (and some of the smaller ones) in 2009.
More downsizing. The excellent PaperCuts newspaper layoffs map is tracking more than 15,000 newspaper layoffs and buyouts in 2008; the pace will continue unabated in 2009. Think there's nothing left to cut? Think again. And this time, there will be very few generous buyouts. The slashing will be done via straight layoffs, aimed at all newspaper departments, as publishers slash costs.
More bankruptcies. Tribune's bankruptcy filing, under the weight of billions of dollars in acquisition debt, won't be the last. Highly leveraged newspapers in Minneapolis and Philadelphia, as well as debt-laden companies like Journal Register and Gatehouse, are more than a little vulnerable to seeking protection from their creditors. Indeed, it's a bit hard to see how they avoid it, especially now that Tribune has paved the way.