by Peter Hart

Corporate media are in a state of severe business shock, it seems—layoffs at newspapers large and small, due to advertising revenue drying up and readers ceasing to pay for a printed copy of a newspaper that they can usually read for free online. The state of the press has generated an enormous amount of attention in the press itself, with journalists and pundits offering any number of plans to "save" dying newspapers. Congressional hearings on the state of the media suggest that lawmakers are worried about what might happen next. And most of the commentary about the media business paints the situation as dire.

The news is "grim and grimmer by the day," wrote New York Times media reporter David Carr (5/4/09 [1]). "Journalism is collapsing, and with it comes the most serious threat in our lifetimes to self-government and the rule of law as it has been understood here in the United States," argued John Nichols and Robert McChesney in the Nation (3/18/09 [2]). A Time magazine cover story by former editor Walter Isaacson (2/5/09 [3]) was headlined "How to Save Your Newspaper."

Others are less certain that things are that bad. Veteran reporter and industry analyst John Morton, for example, wrote in the American Journalism Review (12/08-1/09 [4]) that profit margins at most papers were actually still healthy; looking at publicly reported earnings data for newspaper operations (excluding non-newspaper properties and some one-time costs and write-downs), Morton saw revenue declines of about 11 percent in the first three quarters of 2008—but a profit margin of about 11 percent as well. As Morton pointed out, this would be a healthy profit in most industries—just not in the newspaper world, where in 2002 average profit margins were about 22 percent.

As Morton and others have pointed out (e.g., the Washington Post's Walter Pincus-Columbia Journalism Review, 5­-6/09 [5]), some of the most dramatic stories involve big-city papers whose parent companies have overextended themselves, saddled with the debts from their new owners' takeovers or purchases of other properties at inflated prices. When real-estate mogul Sam Zell purchased the Tribune Co. in December 2007, for example, he gave the already-indebted media chain an additional $8 billion in fresh IOUs (Business Week, 7/30/08 [6]).

Morton's analysis is echoed by the industry itself. The Newspaper Association of America trade group took out full-page advertisements headlined "The Reality About Newspapers" that sought to debunk the sky-is-falling rhetoric, noting (among other things) that subscription declines across the board have been relatively small (7 percent since 2002).

In a lecture at the University of Kentucky (4/1/08), former newspaper editor John Carroll recalled his tenure at the Lexington Herald-Leader, which was (like most) a very profitable paper:

We made millions and millions and millions of dollars. Each year we made a bundle, and the next year we'd make even more. I wish I could tell you that this reflects the cleverness of the editor. What it reflected, in truth, was crude pricing power. Advertisers so desperately needed the Herald-Leader that we could jack up advertising rates almost at will. It was something close to a monopoly—not an illegal monopoly, but an amazingly lucrative near-monopoly.

Carroll added: "An economist would say that monopoly is a bad thing and that for a monopoly to crumble is good. In principle I agree, but I sure do miss the easy-money days. We thought they'd go on forever."

Many reporters and commentators seem unable to imagine journalism without newspapers, but are unable to articulate precisely what it is about them that is not transferable to other formats. "Thinking about a federal government in full frolic engorged by stimulus money without a robust Washington Post is not a pleasant prospect," wrote Carr (New York Times, 5/4/09 [1])—without explaining why robust online reporting couldn't fill that role. ProPublica, for example, features careful reporting on the various Wall Street bailouts, which involve larger sums of public money.

Likewise, former NBC anchor Tom Brokaw told a group of Minnesota journalists (Poynter Online, 5/15/09 [7]): "If any of [the most important] events were left simply to the bloggers or to people who Twitter or the radio talk hosts of America, how informed would the world be if that were the case?" Brokaw seemed unduly confident that his listeners would understand that people who read Glenn Greenwald, Juan Cole or Talking Points Memo, or listen to Amy Goodman, are necessarily less informed than those who get their news from, say, NBC Nightly News.

In questioning whether a much smaller Boston Globe would be able to do strong investigative reporting of important local institutions like the Catholic Church, the Washington Post's Howard Kurtz (5/11/09 [8]) mused: "Newspaper folks may have an inflated view of their self-importance, but what they do has an impact beyond their readers and advertisers. Local TV isn't likely to expose a crooked mayor, as the Detroit Free Press did. Bloggers aren't going to reveal secret CIA prisons."

But why not? It was the bloggers at Talking Points Memo (1/12/07 [9]), after all, who first exposed the Bush administration's politically motivated firings of Justice Department prosecutors—winning a Polk Award for their scoop (New York Times, 2/25/08 [10]). And the Washington Post didn't exactly reveal the CIA's secret prisons, either; it disclosed their existence, but kept their locations a secret at the request of the Bush administration (Extra!, 5-6/06 [11]).

Journalists are not wrong to think that the field of journalism has a unique social value. But as many in the corporate press are understandably focused on whether their particular jobs will be saved, these folks may be exactly the wrong people to explain what's going to happen to the media business.