Here's the scoop on the newspaper industry.
Publishers have announced more than 1,000 job cuts this year at big metro dailies, inside the newsroom and on the business side. And once again, editors and reporters wonder if their journalistic mission will suffer at the hands of Wall Street's demand for profit margin improvement amid slumping ad revenue.
Newspaper executives don't have it easy, either. They face a challenge from the Internet, consolidation among big retailers that want to spend less on newspaper advertising and an increase in newsprint costs.
The balancing act is an old story, but the pain is fresh and can emerge in unexpected ways.
The New York Times Co. has announced job cuts of 700 people this year, and at least one industry analyst says the company's most recent round of layoffs is inadequate. Tribune Co., owner of the Chicago Tribune and Los Angeles Times, owes the IRS an estimated $1 billion after a U.S. Tax Court ruling this week disallowed a tax-free reorganization. Tribune inherited the pre-existing tax dispute when it bought Times Mirror Co. in 2000. The deal still is hurting Tribune's once-sparkling profit margins.
Closer to home, the Post-Dispatch has seen major changes in recent months.
Since June, the newspaper has been acquired in a $1.42 billion buyout of Pulitzer Inc. by Lee Enterprises of Davenport, Iowa; rolled out a redesigned newspaper; offered early retirement to many workers 50 and older; and encountered newsroom dissent over a lengthy correction.
Newspapers take pride in thriving in turmoil, chaos and deadline pressure. What's more, they throw off an enviable amount of cash, even in bad times.
Take Lee Enterprises, for example.
Lee's operating profit margin for the nine months that ended June 30 was 22 percent. General Electric Co.'s consolidated operating profit margin at midyear was 13.5 percent. Boeing Co.'s St. Louis-based defense business is thrilled to get anything above 10 percent.
In a speech Wednesday at Washington University's Olin School of Business, Lee Enterprises Chairman and Chief Executive Mary Junck said no competition comes close to a newspaper in delivering the same amount of news, information and advertising.
"We command the lion's share of the market," she said. "I will concede we have more competition than ever."
To be sure, newspapers have been battling declining circulation for decades as double-income households have left families with less leisure time. The Internet also has changed the playing field.
Newspaper analyst John Morton of Morton Research Inc. said the latest round of job cuts is not necessarily a dire reading of the industry's health.
"The news staffs of the newspapers affected have all been pretty fat by industry standards," Morton said. "The cuts don't leave these newspapers in what I would call a weakened condition."
Post-Dispatch Publisher Terrance C.Z. Egger said the newspaper's voluntary retirement offer - unveiled last month - is designed to adjust costs to revenue, and do it in a way that allows employees to make a personal decision without pressure. He said about 260 union and non-union employees have expressed interest in reviewing the package.
"Because of rising operating costs and a continuing difficult revenue environment, we need to reduce our staffing levels in some areas," Egger wrote in a letter to employees.
Shannon Duffy, the St. Louis Newspaper Guild's newly hired business agent, said he's been told by Post-Dispatch officials that there is not a target for the number of employees that need to be cut. Still, inside the newsroom, staffers wonder if there will be layoffs if not enough people take the voluntary buyout offer.
"I am very confident that by giving our employees a generous offer and a personal choice we will get where we need to be," Egger said.
For now, it's too early to say how many employees will take the offer. Egger said he'll have a good idea next month.
The decision to offer a voluntary buyout was made in St. Louis, but in consultation with Lee Enterprises. The newspaper says it would have taken the same action if Pulitzer had not been sold.
Newspapers cut jobs
Among the newspapers that have announced job cuts this year:
The New York Times Co.* 700
San Francisco Chronicle 120
Philadelphia Newspapers Inc.** 100
San Jose Mercury News 52
Newsday (New York) 45
Post-Dispatch - About 260 employees are eligible for retirement buyouts
*Includes The New York Times, The Boston Globe and other publications.
**Includes the Philadelphia Inquirer and Philadelphia Daily News.
