Am I dim or just grumpy?

Maybe I am just being grumpy, but I am still stunned by the poorly written press release from the Newspaper Association of America (menioned in earlier post). I am probably more stunned by the fluffing of the numbers and the stiff direct quotes (obviously written by the PR folks -- nobody speaks like that!) from leadership, however, than I am by the ungrammatical and flackified writing.

From the press release:

"In addition, on average newspaper Web sites have contributed to a 13.7 percent increase in total newspaper audience for the coveted 25- to 34-year-old demographic and a 9.2 percent increase for 18- to 24-year-olds (Scarborough)."

Compare those numbers to ones listed in an Editor&Publisher story:

"Bear Stearns analyst Alexia Quadrani noted slowing online growth in a brief to investors regarding Q1 results. She pointed to Yahoo’s difficulties over the past twelve months, The New York Times Co.’s About.com -- where revenue advanced 26% in Q1 compared with 98% in Q1 2006 -- and the revenue shortfall at E.W. Scripps' Shopzilla as evidence of the slackening pace.

In Q1 2006, online advertising for the companies that Bear Stearns covers, rose 35% versus 22% for Q1 of this year. 'A double digit revenue growth profile is still impressive,' she wrote, 'However, at 7% of revenues on average, the rate of deceleration is a bit of a concern as this online segment may not ever become a sizable enough contributor to offset losses in the print world.' "

Granted, they are looking at different numbers, but there is not a hint of negativity in the NAA release. I visited the NAA site and poked around a bit and found the same thing. Reading through the site leads one to conclude that the newspaper industry, thanks in no small part to the NAA, is healthy and on the upswing. It is?

Just for chuckles, I visited GuideStar.org, which provides information about non-profits. (I visit the SEC site to get background on public companies.) I don't know what the dues are for NAA, but the most recent IRS Form 990 showed some mighty high salaries -- including nearly $1 million in total compensation for the president -- for an organization whose hype is bigger than its help.

Newspaper profit margins and private ownership

I have been watching with some dismay as newsroom budgets are not just cut, but slashed, and as newspapers are bought and sold left and right in an attempt by publishing companies to increase the bottom line or dump "loser" properties. It's either please the shareholders and their never-ending desire for more and more share value or let someone else try.

In 2006, a "bad" year for newspapers, publicly traded companies sported an average profit margin in the 17-18% range (1). Granted, that is down from the 2000 numbers, which were 22% to 29% (2). Both are above average for most industries: about 8.3% over the past 25 years ago (3). For comparison, ExxonMobil, which is being hammered for record profits while prices at the gas pump skyrocket, sported only a 10% profit margin in 2005 (3).

I have to admit I don't understand how money, profits and the stock market work exactly, but it seems to me that trying to please shareholders is the main problem. That has led to cutting newsworkers as if they were simple workers on an assembly line. But newsworkers create the product in a way that assembly line (or other typical) workers do not. Cutting newsroom budgets is like cutting important ingredients that are critical to your product. Yet that seems to be the management answer. That's good: cut the heart out and then wonder why the patient dies.

So I am all for the private people who are buying newspapers. Run smartly, newspaper companies can still make money if they don't have to keep voracious shareholders happy.

(1) http://www.cjr.org/issues/2007/2/Kuttner.asp
(2) http://www.pbs.org/newshour/bb/media/jan-june01/profits_3-22.html
(3) http://www.commondreams.org/views06/0322-28.htm