Lee Drutman: Opportunity in newspaper's breakup
Wednesday, March 22, 2006
BERKELEY, Calif.
DEFENDING his company's $6.5 billion purchase of the Knight-Ridder newspaper chain, McClatchy Co. Chief Executive Gary Pruitt last Thursday took to the opinion pages of The Wall Street Journal, where he argued (in "Brave News World") that all those skittish investors who think newspapers are a dying industry are, in fact, dead wrong.
"Far from shrinking," Pruitt wrote, "our audiences are growing steadily. Simply put, more people want our products today than wanted them yesterday."
From Pruitt's vantage point, newspapers are indeed a growth industry. But this is only because the McClatchy Co. has pursued a strategy of operating papers exclusively in growth regions. The average McClatchy market is projected to experience almost 12-percent population growth in the next five years. That's why, of the 32 Knight-Ridder papers that McClatchy bought, McClatchy intends to keep only the 20 in the faster-growing regions (average five-year projected growth: 11.1 percent), and ditch the 12 in the slower-growing regions (average five-year projected growth: 4.8 percent).
But what happens to those papers in the slower-growth regions?
Take The Philadelphia Inquirer, a paper with a great tradition that has fallen on hard times. In the 1980s, The Inquirer had half a million daily and a million Sunday subscribers, and was regularly winning Pulitzer prizes. Now the subscription rate is down to 357,000 daily, 715,000 on Sunday, and still falling.
When I worked there as a staff writer, in 2000-01, I watched in disbelief as the paper let many of its best people go, to appease the cost-conscious Wall Street investors. Space for local coverage kept disappearing, and the suburban newsroom where I worked took on a graveyard-like atmosphere, with three or four abandoned desks for every one that was occupied.
Occasionally, cheerful e-mails from Knight-Ridder CEO Tony Ridder would come across my in box, telling me about the company's stock price. I was puzzled then, and I'm puzzled today.
Over the last 25 years, the average profit margin for corporate America has been 8.3 percent. But last year the 13 largest newspaper chains turned an average profit margin of 20 percent. The most profitable, such as McClatchy and Gannett, turned a profit margin of 30 percent; Knight-Ridder, 19 percent.
By contrast, last year ExxonMobil -- whose record profits have drawn angry calls for a windfall-profits tax on the oil industry -- turned only a 10-percent profit margin.
Yet even with these fat newspaper profit margins, newspaper stocks are tumbling. On average, newspaper-company share prices last year fell 20 percent. As a result, newspapers cut and cut; last year, another 1,500 full-time newsroom jobs vanished.
Apparently, Wall Street investors think that newspapers will shrivel up and die in the age of the Internet, making them a poor investment. True, newspaper circulation continues to slip (in 2005, daily circulation was down 2.6 percent; Sunday, down 3.1 percent), and print ad-revenue growth is slow (in 2005, up about 1 percent). Nevertheless, by any standard, newspapers are still ridiculously profitable.
So what if newspapers are not a growth industry? Isn't that okay?
Perhaps, in the buyout and promised breakup of Knight-Ridder, there is finally an opportunity to accept newspapers for what they are -- and not what Wall Street thinks they should be.
Consider that McClatchy wants to unload the 12 papers in the slower-growth markets; given Wall Street's pessimism about the industry, these papers can probably be had relatively cheaply. Surely there are investors out there who care enough about the future of journalism to snap up these papers, make them private, and be happy with a 10-percent profit margin -- which would allow plenty of room and resources for solid journalism, free from the destructive pressure of quarterly-earnings reports.
The Newspaper Guild has discussed buying the 12 papers, and making them employee-owned. There is also the notable model of The St. Petersburg (Fla.) Times, a highly regarded paper owned by a nonprofit foundation, the Poynter Institute. And most national opinion magazines, such as The Nation, are also run as nonprofits.
In many ways, what happens to these 12 papers portends the future of the whole newspaper industry. If another big chain buys them, we will probably see more cost cutting, less meaningful reporting, and more self-fulfilling prophecies of newspapers' becoming irrelevant. But what if a new-old model of newspaper ownership emerges: one that values journalism as a public service and is content with a profit margin that matches the rest of corporate America -- or, better yet, considers newspapers treasures, to be treated as nonprofits?
Who knows? We may even see a newspaper revival.
Lee Drutman, a former reporter at The Philadelphia Inquirer and The Providence Journal, is a frequent Journal contributor and co-author of The People's Business: Controlling Corporations and Restoring Democracy.
Wednesday, March 22, 2006
Monday, March 20, 2006
Can you go a year without buying frippery? She did -- LA TIMES book review
http://www.calendarlive.com/books/reviews/cl-et-book20mar20,0,5687797.story?coll=cl-books-reviews
BOOK REVIEW
Can you go a year without buying frippery? She did
Not Buying It My Year Without Shopping Judith Levine Free Press: 276 pp., $25
By Lee Drutman
Special to The Times
March 20, 2006
ON a crowded New York City subway car, the day after Thanksgiving, sitting between "two members of a wet, overstuffed, and ketchup-smelling family of Christmas shoppers," author Judith Levine gets an idea: "What if I (along with my live-in partner, Paul) undertook an X-treme trial of non-consumption, a Buy Nothing Year?"
Levine (a Brooklyn- and Vermont-based writer who a few years ago earned some notoriety and a Los Angeles Times Book Prize by arguing that "sexual expression is a healthy and happy part of growing up" in "Harmful to Minors: The Perils of Protecting Children From Sex") tells us that she has maxed out her credit cards. She is alarmed by the social, environmental and economic costs of America's love affair with shopping. She wonders, "[C]an a person have a social, community, or family life, a business, a connection to the culture, an identity, even a self outside the realm of purchased things and experiences?"
And so, a great experiment is born: "Starting January 1, 2004, Paul and I will purchase only necessities for sustenance, health, and business."
Ah, but what counts as "only necessities"? A daily copy of the New York Times (even in Vermont)? Necessity. But eating out, paying for entertainment and even Q-tips? Verboten. In May, when the "final shard of Body Time rosemary-mint aromatherapy soap slides down the drain," Levine glumly announces: "Now we'll make do with Ivory."
As she goes through the year with her purse tied behind her back, she finds she is left out. (The pair let their friends in on the project and do not let themselves take handouts.) They find that social life, especially in New York City, revolves around going out — to meals, movies and other merriments that do not count as necessities. Without her usual fix of modern distraction, she admits feeling "bored … lonely, antsy."
She wonders: Is shopping really so bad? Is anti-consumerism merely, as a colleague puts it, "the Puritanism of the left?" Advertisers are up to no good, in Levine's eyes, for assaulting us with our inadequacies and fears so we will buy more, but "I don't want to tell the girls in the store that it's wrong to want those frivolous shoes, because I don't want to risk suggesting they give up the sexy dream of dancing the night away."
Levine seeks out others who are trying to consume less. In Brooklyn, she links up with the Voluntary Simplicity movement and its promise of "frugal consumption, ecological awareness, and personal growth." She finds a ragtag bunch trying to get their personal lives in order, obsessing over "clutter." She wonders whether "cutting back my personal consumption will do any more than make me feel better." She also joins the Take Back Your Time movement, which advocates for a work-less, spend-less economy. Shortly after joining, she gets the following e-mail from the group's organizer: "Our planned event for TAKE BACK YOUR TIME has been canceled so that you can Take Back Your Time." Upon further inquiry, Levine learns that she was the only member of the group who actually had time to attend.
It is only in Vermont that Levine finds a few people who are truly "off the grid." There is Richard Czaplinski, who lives in a solar-powered cabin and bought his last pair of shoes, for a quarter, 15 years before. Czaplinski calls his radically simple existence "nirvana." But such self-sufficiency is also a full-time job.
At the end of the year, Levine has saved $8,000, enough to pay off her credit cards and has learned that "where getting and having are concerned, enough is significantly less than we, and Americans generally, think it is." Well, surprise! She seems chastened by the experience, glad to have gotten in touch with what Paul calls "embracing the ordinary." But she also needs socks.
What makes "Not Buying It" stand out among the many books about consumerism is the personal approach. By following Levine's progress, the reader gets to appreciate the difficult trade-offs and tensions in not consuming. Her entertaining prose also does a good job of integrating a number of important academic works on the subject, making them relevant and digestible. The academic works, in turn, lend Levine's story some thought puzzles.
The trade-off to the personal, however, is a certain myopia. At one point, Levine offhandedly shares that she has heard a story on NPR that one-quarter of America's working families are living in poverty. But she quickly moves on to the next subject, never stopping to think about the relationship between America's consumerist mentality (low, low prices!) and its alarming poverty (low, low wages!). Similarly, there are occasional worries that rampant consumerism might be destroying the environment. But recycling is difficult and expensive, she complains, and "saving the earth is something of a bourgeois consumer privilege, too."
No doubt, Levine really does care about these bigger issues. Yet by focusing primarily on the personal choices and consequences of not shopping, Levine may be telling us far more about the mind-set of American consumerism than perhaps she even fully realizes.
*
Lee Drutman is co-author of "The People's Business: Controlling Corporations and Restoring Democracy."
Copyright 2006 Los Angeles Times
BOOK REVIEW
Can you go a year without buying frippery? She did
Not Buying It My Year Without Shopping Judith Levine Free Press: 276 pp., $25
By Lee Drutman
Special to The Times
March 20, 2006
ON a crowded New York City subway car, the day after Thanksgiving, sitting between "two members of a wet, overstuffed, and ketchup-smelling family of Christmas shoppers," author Judith Levine gets an idea: "What if I (along with my live-in partner, Paul) undertook an X-treme trial of non-consumption, a Buy Nothing Year?"
Levine (a Brooklyn- and Vermont-based writer who a few years ago earned some notoriety and a Los Angeles Times Book Prize by arguing that "sexual expression is a healthy and happy part of growing up" in "Harmful to Minors: The Perils of Protecting Children From Sex") tells us that she has maxed out her credit cards. She is alarmed by the social, environmental and economic costs of America's love affair with shopping. She wonders, "[C]an a person have a social, community, or family life, a business, a connection to the culture, an identity, even a self outside the realm of purchased things and experiences?"
And so, a great experiment is born: "Starting January 1, 2004, Paul and I will purchase only necessities for sustenance, health, and business."
Ah, but what counts as "only necessities"? A daily copy of the New York Times (even in Vermont)? Necessity. But eating out, paying for entertainment and even Q-tips? Verboten. In May, when the "final shard of Body Time rosemary-mint aromatherapy soap slides down the drain," Levine glumly announces: "Now we'll make do with Ivory."
As she goes through the year with her purse tied behind her back, she finds she is left out. (The pair let their friends in on the project and do not let themselves take handouts.) They find that social life, especially in New York City, revolves around going out — to meals, movies and other merriments that do not count as necessities. Without her usual fix of modern distraction, she admits feeling "bored … lonely, antsy."
She wonders: Is shopping really so bad? Is anti-consumerism merely, as a colleague puts it, "the Puritanism of the left?" Advertisers are up to no good, in Levine's eyes, for assaulting us with our inadequacies and fears so we will buy more, but "I don't want to tell the girls in the store that it's wrong to want those frivolous shoes, because I don't want to risk suggesting they give up the sexy dream of dancing the night away."
Levine seeks out others who are trying to consume less. In Brooklyn, she links up with the Voluntary Simplicity movement and its promise of "frugal consumption, ecological awareness, and personal growth." She finds a ragtag bunch trying to get their personal lives in order, obsessing over "clutter." She wonders whether "cutting back my personal consumption will do any more than make me feel better." She also joins the Take Back Your Time movement, which advocates for a work-less, spend-less economy. Shortly after joining, she gets the following e-mail from the group's organizer: "Our planned event for TAKE BACK YOUR TIME has been canceled so that you can Take Back Your Time." Upon further inquiry, Levine learns that she was the only member of the group who actually had time to attend.
It is only in Vermont that Levine finds a few people who are truly "off the grid." There is Richard Czaplinski, who lives in a solar-powered cabin and bought his last pair of shoes, for a quarter, 15 years before. Czaplinski calls his radically simple existence "nirvana." But such self-sufficiency is also a full-time job.
At the end of the year, Levine has saved $8,000, enough to pay off her credit cards and has learned that "where getting and having are concerned, enough is significantly less than we, and Americans generally, think it is." Well, surprise! She seems chastened by the experience, glad to have gotten in touch with what Paul calls "embracing the ordinary." But she also needs socks.
What makes "Not Buying It" stand out among the many books about consumerism is the personal approach. By following Levine's progress, the reader gets to appreciate the difficult trade-offs and tensions in not consuming. Her entertaining prose also does a good job of integrating a number of important academic works on the subject, making them relevant and digestible. The academic works, in turn, lend Levine's story some thought puzzles.
The trade-off to the personal, however, is a certain myopia. At one point, Levine offhandedly shares that she has heard a story on NPR that one-quarter of America's working families are living in poverty. But she quickly moves on to the next subject, never stopping to think about the relationship between America's consumerist mentality (low, low prices!) and its alarming poverty (low, low wages!). Similarly, there are occasional worries that rampant consumerism might be destroying the environment. But recycling is difficult and expensive, she complains, and "saving the earth is something of a bourgeois consumer privilege, too."
No doubt, Levine really does care about these bigger issues. Yet by focusing primarily on the personal choices and consequences of not shopping, Levine may be telling us far more about the mind-set of American consumerism than perhaps she even fully realizes.
*
Lee Drutman is co-author of "The People's Business: Controlling Corporations and Restoring Democracy."
Copyright 2006 Los Angeles Times
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