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Hot Button / Lynn Ashby

Good by to Free Newspapers

April 1, 2010

All good things must come to an end, and now this includes free newspapers. The change is most welcomed because I’m tired of standing on the street corner holding up a sign, “Wil rite fur food.” As we all know, the media are (remember the word is plural) in bad financial shape. So are hotels, airlines, university endowments, auto makers and whatever you do to turn a buck. But it’s the press we love to hate, and we get pleasure out of the Fourth Estate’s dilemma. The Germans call it schadenfreude.

The press, however, has an additional problem: the Internet. Ever since the advent of Al Gore’s invention, we can go to our computer and read virtually any newspaper in the world for free. But no company can afford to give away its product, although Toyota dealers are considering the idea. Thus newspapers are dropping like Tiger Woods’ endorsements.

As a solution, some papers have tried to charge for their news stories on the Internet, but the accompanying ads and readership dropped so much that the charge plan was abandoned by most papers, excluding the Wall Street Journal, the Financial Times and Newsday which still charge unless you’re a subscriber. The New York Times says that it plans to do the same. Now into this fracas comes the Intelligencer Journal-Lancaster New Era in Lancaster, Penn., whose nameplate must take up most of Page 1.

The paper, which plans to implement the idea this spring, says it will start by offering news that no other paper on Earth gives its readers (pause to think): local obituaries. Brilliant! If there are enough subscribers, the paper will add local sports. That way, anyone who moves away from Lancaster – and apparently there are a lot of them – can keep up with their departed friends and the Fightin’ Fungi back home. The editors say if the plan works it may generate several hundred thousand dollars which would be enough to hire on more reporters. (The Intelligencer Journal-Lancaster New Era Globe, Mail and Post-Chronicle must pay better than most papers.) If the plan doesn’t work, they’ll dump it and try something else.

Those developing this operation say it is enormously flexible. Some readers may want just obits, others, only sports. Long distance readers may be able to pay a flat fee or pay by the clicks. Papers can offer the headline and first few paragraphs for free and charge for the rest, along with photographs, etc. Maybe, as many of you tell me constantly, you just wish to read a certain columnist. Papers can give print subscribers free access or charge them for archives. Customers could pay with their credit cards or with gold coins, pelts or fire water. The target is to be user friendly. Customize your selections.

This new revenue source may help an industry which is hurting, but to be fair and balanced – as we like to say at Fox — much of the media’s wounds are self-inflicted. Or they were caused by non-journalists who got rich doing something else, and, like meddling pro sports teams’ owners, these amateurs think if they are smart at this then they are smart at that. They aren’t.

As we’ve discussed before, in 2007, real estate tycoon Sam Zell thought he could buy and run a newspaper. Silly man. He paid $8.2 billion for the Tribune Co., which owned the Los Angeles Times, the Chicago Tribune and the Chicago Cubs. Zell put down – ready? — 4 percent of the total price and borrowed much of the rest. His deal went sour and on Dec. 8, 2008, the Tribune Co. filed for bankruptcy. Chicago’s other daily paper, the Sun-Times, is also bankrupt, and it top executives are in prison after fleecing the paper.

I think we see a pattern here. Private-equity investors bought the Philadelphia Inquirer and Philadelphia Daily News in June, 2006, borrowing $450 million of the $562 million purchase price. The company went bankrupt, while executives received $650,000 in bonuses. Two years ago, Avista Capital Partners bought the Minneapolis Star Tribune for $530 million, which included more than $400 million in IOUs. The company has filed for Chapter 11. Knight-Ridder was torn apart and killed off by a financier who made money on the deal. And on and on.

Some people, for purely political reasons, attribute the decline and fall of the media to their slant (usually to the left). True, liberal Air America went bankrupt because it was founded and run by people who had not a clue how to operate a radio network (see “newspapers” above). A few years ago, the liberal New York Times paid $1.2 billion for the Boston Globe, borrowing heavily. Last year the Times tried to sell the Globe for a pittance if someone would only take over the debt. No buyers. The Times also owns part of the Boston Red Sox, which no one wants to buy, either.

Liberals clearly are bad business people who ….wait. The Citadel Network, which runs mostly conservative radio and TV shows, was so pro-Iraq War it wouldn’t even show a program listing the names of the fallen Americans. Citadel just went bankrupt. The conservative Wall Street Journal is worth about half the $5 billion that Rupert Murdoch paid for it two years ago. This recession is an equal opportunity downer.

Maybe the Intelligencer Journal-Lancaster New Era Globe, Advertiser & Telegram will find the solution, because millions of readers want what newspaper journalists produce. Almost 50 million Americans buy a newspaper daily, and nearly 117 million read one. But the freeloaders read, too: An additional 66 million unique visitors read newspapers on Web sites each month. Also remember that your newspaper is the feed stock for virtually all the news you hear or see on talk radio or TV or especially the blogs. It is no wonder that more people read The New York Times today than ever before. They just don’t pay for it. Until now.

Ashby charges at ashby2@comcast.net

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