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Newspapers Suffer Spate of Layoffs, Decline in Circulation, Ad Revenue, Stock Price: A Roundtable Discussion on the State of the Industry

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We take an in-depth look at the state of the newspaper industry. In recent months, more than 6,000 print journalists have lost their jobs, newspaper circulation is down, and so is advertising revenue, page counts and stock prices. We host a roundtable discussion with Bernard Lunzer, president of the Newspaper Guild; former New York Times correspondent, Chris Hedges, now at the Nation Institute; and Linda Jue, director of New Voices in Independent Journalism. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: We begin today by examining the state of newspapers in this country. Newspapers have been one of the primary sources of news the world over for more than 300 years. They have endured despite onslaughts from radio, television, and, most recently, the internet. But newspapers in the United States, are they now on their final leg?

Nearly 6,000 newspaper journalists across the country have lost their jobs in recent months. The same period has witnessed a sharp decline in newspaper stocks, advertising revenues, page counts and circulation. On Monday, shares in AH Belo Corporation plunged, and the owner of the Dallas Morning News said it would cut 500 jobs.

Job cuts have also been drastic at Tribune-owned newspapers, including the Chicago Tribune, the Los Angeles Times, the Orlando Sun-Sentinel, Newsday and the Baltimore Sun. Real estate mogul Sam Zell took over the Tribune Company six months ago.

A recent study by the Pew Research Center shows that coverage of international as well as national news has suffered as a result of the cutbacks. Nearly two-thirds of American newspapers cover less foreign and national news now than they did three years ago. Only four American newspapers even have foreign desks.

Today, a discussion on the state of the newspaper industry. We’re joined by three guests. Bernard Lunzer is president of the Newspaper Guild and vice president of the Communication Workers of America. He joins me from Washington, D.C. Chris Hedges is a senior fellow at the Nation Institute. He spent nearly two decades as a foreign correspondent for the New York Times and is co-author of the new book Collateral Damage. His latest article for Truthdig is called “Bad Days for Newsrooms and Democracy.” He joins us here in the firehouse studio. And we’re also joined on the telephone from San Francisco by Linda Jue. She is the director of New Voices in Independent Journalism and the past president of the Society of Professional Journalists, Northern California Chapter.

I want to welcome all of you to Democracy Now!, and I’d like to begin with Bernard Lunzer. Could you give us a sense, from your perspective as a leader of the major union for newspaper workers in the country, what is happening in the newsrooms right now?

BERNARD LUNZER: Well, there’s just a lot of fear, almost a sense of panic in many places. You know, in two months alone, there will be additional 2,000 cuts with Belo’s announced cuts yesterday. And so, there’s just a lot of fear and uncertainty. People don’t know. Those that can are looking for other jobs. Those that can’t are concerned about the workload that’s left behind and what kind of product is going to actually be produced. So it’s a very scary time. And as the stocks continue to plunge, you know, there’s more fear that — you go through one round of buyouts, and then you end up with layoffs, and then you wait for the next round. So that’s sort of what’s happening right now on the ground.

JUAN GONZALEZ: Well, Bernie, I’d like to get this clear. Most of these newspapers are not actually losing money, right? When the Knight Ridder disappeared and was bought out by the McClatchy Company, it was still getting about a 15 percent return on sales every year. So, why are they going through this enormous, basically, collapse of the industry?

BERNARD LUNZER: Well, the market has put considerable pressure on them, for sure. And it’s a problem. I mean, there’s real concern that the current ownership model is not going to survive and that new forms of publications and new ownership models are going to have to take over. So, clearly, Wall Street is a big part of the problem as the stocks decline. The profitability is still probably fairly healthy in some cases. But you have to remember, newspapers were used to getting 20, even 30, percent profit margins during the heyday, and they were addicted to those profit margins. You know, [inaudible] McClatchy, who was in the McClatchy chain, who said, you know, the problem with newspapers is that they were too profitable. And that continues to be a problem. There’s a legitimate revenue problem. Clearly, in the case of Sam Zell and some of these others, Avista Capital in Minneapolis, they paid too much, they’re over-leveraged, there’s too much debt. But part of it is just the problem with too much belief that they have to get profits that are not there.

JUAN GONZALEZ: Linda Jue, I was with you this past weekend at the UNITY Journalists of Color convention in Chicago, and you mentioned especially the impact on the Bay Area in one of your presentations in one of the workshops, the impact on the Bay Area of journalists.

LINDA JUE: Yeah. MediaNews owns twenty-nine newspapers in northern California, and they’ve just gone through their fourth layoff in a year. And the estimate’s that probably over a thousand employees, and we’re expecting more, to be laid off.

So — and I think, you know, more than just the employment issue, the coverage of those communities that — where the MediaNews papers are located have been severely affected. But what they are telling the employees that are remaining is that, you know, the coverage is going to stay the same, even if — and maybe even get better, but they’ll just find different ways to do it. And, you know, what’s surprising to me is that many of the employees actually believe this, or they want to believe this. So the impact is — it’s pretty bad. It’s pretty bad. And I think there’s a kind of a post-traumatic shock syndrome going on now with the employees that have been laid off.

JUAN GONZALEZ: Chris Hedges, what about that, that the coverage is going to get better with all of these reductions in staffs, and especially the foreign coverage — you were a foreign correspondent for many years at the New York Times — and the fact that so many of these operations now, even newspaper operations, have shut down their foreign bureaus? What’s the impact, especially in an increasingly globalized economy like we live in now?

CHRIS HEDGES: First of all, we’ve already seen a deterioration in the coverage, so the notion that it’s going to get better, I think, has just not borne out. You know, increasingly, newspapers in print form are replicating — trying to replicate the web and, to a certain extent, trying to replicate what we see on television, which has been a complete disintegration of serious newsgathering.

But I think the important issue here concerns the internet. There has been an assumption, which I think is false, that newspapers will make the transition to the internet, that the internet is just another delivery system. And it’s not. As Marshall McLuhan understood, every new technology creates its new reality, often an invisible reality. And newspapers, big and small, have long had websites now, but they have not made that transition. Only ten percent of ad revenue goes to the internet. In terms of national figures, it’s about $21 billion a year, which is a very small percentage of revenues. And I think that the crisis that is hitting newspapers across the country, which we’ve just detailed, is at its core, because — is a kind of realization and is a kind of panic that newsprint is dying, at least the large big dailies. We’ll still get those sort of free dailies they hand out on the metro, designed to be read in twenty minutes, which are essentially advertising rags with virtually no reporting. But the large newspapers are dying, and the internet is not going to replace them. They are not going to make that transfer from newsprint to the internet. And that is what is the crisis. And I think that the crisis is one that is severe not only for the newsgathering industry, but for our democracy as a whole.

There’s been a terrible corruption, of course, of the newsgathering industry, in large part because — courtesy, thanks to the Clinton administration, we now have five corporations essentially controlling everything that we read, see, hear and ultimately think. And then, of course, that fusion of entertainment and news is one that has been completely — has been devastating to those of us who care about impartial and honest newsgathering.

So, you know, what we’re seeing is people retreating into sort of these intellectual ghettos in the internet, where people — where very little reporting is done. I mean, I think if you look at the blogosphere, it’s very clear that there’s a parasitic quality. They feed off of the wire services and the newspapers, which probably account for about 80 percent of all newsgathering. When that’s gone, we are just going to descend into kind of packaging and partisanship and propaganda. And what my deepest fear is, that the future of news will end up looking like the Drudge Report.

JUAN GONZALEZ: I’m sure there’d be lots of people who conduct blogs who would question your use of the word of them as “parasites.” Some people advocate that actually this is the beginning of a new era, very much like the early newspapers in the early 1800s, where you’re basically getting a whole new medium, opening up the opportunity for more citizen journalism, and eventually this will filter itself out into new developed media companies. What’s your sense of that?

CHRIS HEDGES: I could believe that if there was reporting on the internet. You know, most of the bloggers don’t even pick up a phone, much less go out and report a story. Reporting a story, especially doing an investigative piece, is laborious, expensive, time-consuming. And, you know, I don’t want to elevate journalism beyond what it is. It’s a trade, like being a carpenter or anything else. But it does take a certain amount of skill and a certain amount of knowledge. And I — there are few sites — ProPublica, Slate, Truthdig, which I write for — you know, that do this, but, of course, they’re very, very small operations when compared with a city newsroom. Newspapers, at their best — and there has been a steady decline in their quality over the last couple decades — but at their best, they send people out to cover City Hall, local politics, arts, theater, sports. I don’t see that that’s going to be replicated on the internet, and that really frightens me.

LINDA JUE: You know, let me jump in here for a second, if I may.

JUAN GONZALEZ: Linda Jue, yes?

LINDA JUE: I actually — I’m not sure that I agree entirely with what you’re saying, Chris, because I am witnessing, actually, in the Bay Area numerous new enterprises starting to come up, being formed actually by journalists, to find new business models that would be — that will sustain very good journalism, you know, and ethical reporting. And so, right now, I think maybe, you know, I would say that things are up in the air, and yes, the newspaper model is disintegrating, I agree. I think print seems to be on its way out. I wouldn’t exactly — you know, I’m not yet ready to call the last rites on it. But I do think that there are some viable models out there that are coming out that we haven’t heard about. And I would say that, you know, there are actually new services that have been out there for even maybe close to five or six years now that are trying to make up for the loss of reporting and quality coverage that we’ve been seeing decline over the last years. So I wouldn’t totally rule out that the internet can’t fill in that vacuum.

We had — the Society of Professional Journalists, Northern California, held an expo, a journalism expo, in Silicon Valley that was co-hosted by Yahoo and brought together a couple of hundred journalists to actually look at that question. And it was quite surprising to see the number of enterprises and the new models of collaboration and new revenue models that they’re cooking up that would not be solely advertising-based. And so, I’m a lot less pessimistic than you are about what’s going on.

CHRIS HEDGES: Well, I’ve got —-

JUAN GONZALEZ: Chris Hedges?

CHRIS HEDGES: You know, revenue is the key. ProPublica receives essentially outside donations, funding, the same with Truthdig. You know, and if you can’t -— I mean, reporting, especially if you do foreign reporting — I mean, my — the first year I was the Balkan bureau chief during the war in Yugoslavia, my first-year budget for the New York Times was $600,000, and that didn’t include salary. It’s — you know, and to do investigative reporting is — it’s — I just don’t see where the money is going to come from to support it.

LINDA JUE: Yeah, well, you know, actually, foundations are actually beginning to look at that more, and there are new cooperative models that are being proposed right now, business proposals that are being proposed right now that I know of, to deal with the issue of foreign reporting and also to deal with the problems of in-depth investigative reporting. In fact, my program is one of them. My program is actually aimed at developing more investigative reporters of color to pursue public interest journalism. And there are other programs like that that are just, you know, beginning to pop up all over the place. Now, granted, they’re not going to have the kind of scale yet that, you know, larger news organizations have and are used to, but I think the actual — the new theme here, in terms of these new enterprises, is actually smaller, faster and cheaper, sort of like NASA. And I think that’s the way we have to go.

JUAN GONZALEZ: Well, Linda, we’re going to take a break, and when we come back, we’ll continue this discussion. We’re talking with Linda Jue, former head of the Society of Professional Journalists, Northern California Chapter; Chris Hedges, a former reporter for the New York Times and now with the Nation Institute; and Bernie Lunzer, the new president of the Newspaper Guild. We’ll be back in a moment.


JUAN GONZALEZ: We’re talking about the state of the newspaper industry. Our guests are Bernard Lunzer, the president of the Newspaper Guild and the vice president of the Communication Workers of America — he joins us from Washington, D.C. Chris Hedges is a senior fellow at the Nation Institute. He spent nearly two decades as a foreign correspondent for the New York Times and is co-author of the new book Collateral Damage. His latest article for Truthdig is called “Bad Days for Newsrooms and Democracy.” He joins me here in the firehouse studio. And joining us on the telephone from San Francisco is Linda Jue. She is the director of New Voices in Independent Journalism and the past president of the Society of Professional Journalists, Northern California Chapter.

I’d like to get back to Bernie Lunzer. We contacted the Tribune Company to invite them on the program. They declined, but they did send us a statement. Gary Weitman, the senior vice president of corporate relations, writes, quote, “We have gotten a great deal of attention for the actions we’re taking at our newspapers to address the issues we, and our peers, face — declining ad revenue, secular difficulties facing our major advertising groups, and the expansion of media choices available to consumers. Clearly, as you recognize, we are not alone. I would point out, however, that at the end of the day, we have the largest newsgathering staffs in our markets and the 2nd and 3rd largest in the country in Chicago and Los Angeles. That is true even after implementing the staff reductions to which you refer.”

Bernie, your response? You know that Tribune has been at the center, at least in this latest wave, of the various layoffs and buyout programs at the various newspapers.

BERNARD LUNZER: Right. We’re very concerned. And, of course, I’ve watched very closely what’s happened at the Baltimore Sun, the loss of all the international bureaus and that kind of coverage. But it’s important to note that what they’re doing is having a great effect on local coverage, as well — great losses there. We think, in many cases — the other day, Sam Zell made the statement that he’s not going to sell any more newspapers in 2008, but we think in some cases that it might be better if Zell were to consider selling more of the empire and breaking it off.

We hope that local ownership would actually create more responsibility and more response back to the local market and to local communities that really are going to be the ones that are the biggest losers in this. We see — you know, less is less. And we need to say that out loud. Subscribers are not fools. They can see that these products have been diminished. So you have this danger of getting into this cycle. We’re hearing that Tribune Company is going to save journalism through all these cuts. That’s not what we’re seeing. That’s not what we’re feeling. We’re feeling that basically it’s just a self-fulfilling cycle of a downward spiral.

JUAN GONZALEZ: Now, what about — the old model was that these chains began to grow — Gannett, Knight Ridder, obviously the Hearst and Pulitzer chains earlier on in the century — but then you had these major media conglomerates across platforms. But now, apparently, many of these companies now are in trouble, because they took on too much debt or because their shareholders are demanding a maximum return.


JUAN GONZALEZ: What about — but you’re saying that the return to local — more locally owned companies would solve the problem? What if those are just private venture capitalists, as they are in many of the instances now, private equity groups that are taking over these local publications?

BERNARD LUNZER: Well, we can see that’s not a great solution. Minneapolis is an example of that. Avista is a private equity firm that bought the Star Tribune, and that has not worked out well, and they’re trying to, you know, manage their debt right now. They’ve missed some payments. So there is a problem with the market. And we talked about alternative publications, but there is a, you know, real question of as to whether or not we can build employee stock-owned papers, whether we can build co-op models. There are different models. And some of us are starting to believe that we may have to rescue newspapers from the market itself for these things to survive, for any quality journalism to survive.

LINDA JUE: Yeah, that’s right. I think that’s absolutely right. The ownership model is what the problem is. One of the things that I want to bring out is that the Northern California Chapter of SPJ is beginning to conduct a study on the impact of coverage on the communities as a result of these layoffs from MediaNews, beginning with MediaNews, since that seems to be the most recent and most public layoffs. And we will be looking at other newspapers. But we are looking at the effects on the twenty-nine communities, because there really hasn’t been any documented data on the reduction of quality of coverage.

And, of course, one of the questions that we’re also looking at is whether or not journalists are willing to actually become owners of some of these newspapers themselves. So, you know, I think the ownership question really needs to be addressed. And one of the biggest areas of coverage that is missing is the coverage of the newspaper buyouts and layoffs as a really good, aggressive business story. I think if we had much better coverage on what’s going on with the business by the journalists themselves, we’d have a much more informed public about the actual consequences.

JUAN GONZALEZ: I’d like to ask Chris Hedges, on this ownership issue, Frank Blethen, who’s been one of the maverick publishers of the Seattle Times — he’s always been opposed the media concentration — has been recently putting forth the idea that maybe the government should get involved through tax policies in helping to foster the continuation of local newspapers, just as it does in other areas of the economy — not necessarily to get involved in the content, but just to preserve local newspapers and their ability to function. What’s your sense about the ownership issue?

CHRIS HEDGES: Well, that’s the BBC model, where you impose a sort of small tax on everybody to sustain a serious newsgathering as part of a functioning democracy. That’s not a bad model. I think if you look at the family-owned newspapers — the Washington Post and the New York Times, I guess the last two big family-owned papers —- you just saw an attempt, essentially a hostile takeover by hedge fund managers. They did get two seats on the board.

JUAN GONZALEZ: That’s with the New York Times.

CHRIS HEDGES: With the New York Times. And the Sulzbergers do have a sense that, you know, this is a business, but it’s also a public trust. Whether that model can be sustained -— the New York Times itself is going through difficult times. Its stock is down to about $12. It has gone through layoffs and buyouts, as well. I mean, part of it is ownership. Part of it is just the antiquated nature of newsprint as a conveyor of information. And I think that, just as we saw with the rise of television — had an impact on newspapers — now we’re seeing the internet.

I just — I want to go back just to the internet quickly, because it’s not totally about ownership; it is about the medium itself. The average reader of the paper copy of the New York Times spends forty-five minutes reading the paper. The average viewer of the New York Times website spends about seven minutes. The internet is not designed for a literate society. We are moving into a post-literate society, a society where information and of course a very limited quality is portrayed primarily through images. The internet can make that fusion between print and images. But the medium itself will determine the content. And to somehow look at the internet as simply another delivery system is a mistake. So there are many factors that go in here.

Ownership model — I think that we have to face the fact that the newspapers are no longer efficient, in terms of economic terms and in terms of speed. I mean, you see that soul-searching that was done when I was at the paper, well, everybody already knows what the news story is, so we have to focus on news analysis, we have to focus on investigative pieces, because people no longer get their news, the news event, from the newspaper itself.

JUAN GONZALEZ: Linda, what about this issue that medium is a message, that the internet itself defines a new way, a not necessarily a more complete or comprehensive way, for people to get their information?

LINDA JUE: Yeah. I have to say that, for the longest time, I actually, you know, followed the same line of thinking as Chris. And what I’m slowly coming around to is understanding that, yes, the internet does not — is not a good medium for delivering long-form, in-depth reporting. And I don’t think that we should try to, you know, plug a square peg into a round hole that way. But I think that, realistically, we have to look at ways to generate attention, to use the internet to drive attention to longer-form reporting that can be found elsewhere, including print. And, you know, I think that one of the biggest mistakes being made right now is the rush to try to grab the attention of young people by developing news in short bites so that they can be transmitted over the cell phone. There’s just no way that you can do that and really do justice to the news. So, I agree. I think there are issues around that, but I think we have to come to terms with the fact that the new media exists, and we have to figure out ways to drive people’s attention, you know, capture their attention first using the new media and then driving them back to possibly print or even back to broadcast or other media.

JUAN GONZALEZ: And, Bernie Lunzer of the Newspaper Guild, what strategies is your union or the Communication Workers of America developing to try to confront this new reality that you’re facing for your members?

BERNARD LUNZER: Well, a couple of things. One, we have been pursuing for some time employee stock ownership strategies, and we’re hoping to actually have an announcement very soon, where we might have finally been able to bring one of these to fruition. I can’t comment on it right now. But we believe there is going to be a future for print, but we’re not naive. We also understand that there has to be innovation. We’ve been willing to bargain concessions where necessary, but we think the biggest mistake is that the owners and the publishers have not been talking to the frontline workers about that kind of innovation. So, what we’re trying to do, where we have to do concessions, we want to trade that for real involvement, real committees that are able to work on a better business model, on the future of the product. We still believe that there’s a place for quality journalism, that people will want it.

I don’t mean to plug a product, but, you know, the Times Reader, which is a software that allows you to view the New York Times online in a whole different way, is an example of just sort of one transition of how longer stories can be read on the internet. There’s a lot of room for innovation, not just in news, but also in advertising. And we think that they have squandered a lot of time.

One plug I want to put in, Juan, is that we also need to fight the push to more consolidation. The FCC changed the rules in December that would allow for more cross-ownership. We’re pushing very hard. There’s a bill in the House right now we’re trying to get pushed through that would reverse those rules. We think if there’s more consolidation, more cross-ownership between broadcast and print, there will be less innovation. And I would tell you that most of the people you talk to in broadcast understand that broadcast is only five or six years behind print, in terms of the effect that the internet is having on the traditional delivery systems.

JUAN GONZALEZ: Alright, well, I think we’re going to have to leave it there, although this is an issue that we’ll continue to cover. I’d like to thank our guests: Bernie Lunzer, the president of the Newspaper Guild and vice president of the Communication Workers of America; Chris Hedges, senior fellow at the Nation Institute, former correspondent for the New York Times; and Linda Jue is the director of New Voices in Independent Journalism. Thanks to all of you.

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