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.
If you bought a copy of the national edition of the Sunday New York Times this weekend, guess what? That $5 newspaper cost more than one share of New York Times Co. stock, which closed on Friday at $4.25. (The New York edition of the paper is $4.)
That's just one illustration of how dramatically newspaper stocks have dropped in the past few months, accelerating a steep and steady decline that began in 2007. Indeed, newspaper stocks have dropped by an average of 77 percent just since the overall economic decline began in earnest in mid-September. That's double the 38 percent drop in the broader S&P 500 stock indicator in that six-month period, striking proof that the newspaper industry is doing even worse than the overall faltering national economy.
And those latest figures, all as of the close of business on Friday, actually represent an improvement from the record lows most newspaper stocks touched earlier last week, before the market's latest attempt to rally.
Wait, there's more (or less): The combined market value of the nation's publicly traded newspaper companies (not counting the industry's two diversified behemoths, News Corp. and The Washington Post Co.) is now just over $1.3 billion.
That means that a package of big industry names like Gannett, McClatchy, Lee Enterprises, AH Belo and Gatehouse (and a few others), comprising dozens of daily and weekly newspapers, could be purchased today, in total, for just a bit more than the $1.1 billion the New York Times Co. paid for a single newspaper, the Boston Globe, in 1993. (Barclays Bank reportedly recently valued the Globe at just $20 million.) That same group of companies was worth $7.2 billion in September. Most of these newspaper stocks also cost much less per share than the papers the companies print.
There aren't really any surprises here—everybody in the newspaper business knows that things are bad, and that's why layoffs abound and several companies have moved into bankruptcy protection. Overall, most newspaper stocks are down more than 90 percent in the past couple of years. But the latest numbers illustrate just how bad things are—and how much worse newspaper shares are performing than the stock market overall.
Maybe that $5 Sunday Times will appreciate in value somehow as a collectible. In that case, it would be a much better buy than a Times stock certificate.
PS: The decline of the newspaper industry is not an American-only phenomenon. Here's a report from Britain that sounds eerily familiar. If anything, mid-sized newspapers are being hit harder there, but that partly reflects differences in how the two country's newspaper markets work.