Yesterday Journal Register Company filed for bankruptcy protection. The move did not come as a surprise. The New York Stock Exchange delisted the company last April after its stock fell to 16 cents a share. This year the stock was trading at 0.5¢, giving the entire company of 200 newspapers a market value around $200,000, or $1,000 per paper. Revenue was down by 20 percent in the last three years, and the company figures it can continue to operate if creditors agree to reduce its debt load by about half.
Journal Register’s aggressive cost-cutting strategy that was supposed to boost the profitability of its newspapers has instead become a symbol of the local newspaper’s decline. Newspapers keep getting thinner and thinner. It’s now commonplace to see a town council meeting take place with no reporters in attendance. Many local newspapers have been reduced to a single staff writer. The same local news story may appear in five or ten different papers (under a different headline in each paper). A paper may contain just three local news stories, as the editor tries to mix in enough press releases, wire service reports, and letters to make it still look like a paper. But the decline in content has led to a decline in readership and in advertising revenue. And as papers lost their uniqueness and local color, the civic pride in reading them also disappeared.
Always conservative in their political leanings, local papers have become more so. This might be reassuring to their regular readers, now mostly over 60 years of age, but it makes it harder for them to draw in new readers, as the newspapers seem out of touch with what is going on in the world.
And that, of course, is the opposite of what a newspaper is supposed to be. Newspapers caught on in a big way a century ago because they were brash, surprising, and cheap. Now they are just the opposite, staid, formulaic, and expensive, in an age when it’s already hard to get people’s attention. As Business Week put it last week, a paper today has to be meaningful enough to draw people away from Twitter and Facebook. Someone may yet find a way to break through the media clutter and make a local newspaper relevant to a town, but what the Journal Register bankruptcy filing tells us is that cutting costs and cutting content is not a way to get that done.
Update: Sunday night, during the Oscars, the Philadelphia Inquirer was also bankrupt. Philadelphia Newspapers Incorporated reported that it had filed for bankruptcy protection in order to restructure its debt.