Newspaper Newsroom Investment

Wall Street analysts, typically cheerleaders for budget tightening, were skeptical about this round of newsroom cuts. Peter Appert of Goldman Sachs told Editor & Publisher that the Philadelphia and San Jose downsizings were “dramatic to the point where readers will notice” and circulation and ad losses might follow.13 Visitors to San Jose who compared the paper today to the paper of a few years ago might be hard pressed not to notice. Consider that the business section of the paper — one of the core franchises of the Mercury News — five years earlier had a staff of more than 45, editors told the Project. After the latest round of cuts, the number was closer to 25.

The immediate signals suggested that investors thought management might have overreacted, or reacted the wrong way. Knight Ridder and New York Times shares fell the week their cuts were announced; by the year’s end Tribune had not moved the stock-price needle upward with all its talk and action on cost containment.14

Newspaper managers believe that using buyouts rather than layoffs has the advantage of making departures self-selective and sending many long-time staff people out the door with generous settlements. But buyouts also raise the suspicion that newsroom managers have an agenda of replacing the best paid with lower-salaried beginners and perhaps tilting staff to more computer-savvy young people in the process. Whether intended or not, it seems difficult to dispute that experience, institutional memory and deep knowledge of the local community are all casualties of this method of staff reduction.

As always, there were encouraging exceptions to the negative news-staffing trends. McClatchy newspapers, which has consistently trumpeted the business value of news investment, basically kept news staffs whole, even as it failed to increase circulation company-wide for the first time in 20 years.15 Most of the privately owned Advance Newspapers, controlled by the Newhouse family, are generously staffed. Two of Advance’s largest properties, the Oregonian in Portland and the Star Ledger in Newark , were among the very few papers to keep circulation even in 2004 and 2005.

In contrast with the New York Times, some national newspapers, including the Washington Post, kept their basic newsroom staffs whole in 2005 and appeared to be increasing news investment online, which we will explain more below. Moreover, there is a cadre of independents, led by the St. Petersburg Times, Arkansas Gazette, and Bakersfield Californian, for whom larger-than-standard news investment (and slightly more modest profit margins) are a consistent commitment and central to business strategy.