Newspapers in Financial Trouble?

The newspaper industry's financial trouble has become news itself lately. But here in New York state's capital, the Times Union is still turning a profit.

Even so, workers at the Times Union understand that these are trying economic times for everyone. We've offered pay cuts and furloughs to save the company money and save our colleagues’ jobs. The company is not interested, and instead has insisted we surrender our seniority rights and protection against outsourcing. The main problem isn’t that your printed newspaper is no longer a profitable enterprise.

The problem is that newspapers enjoyed such a high profit margin for so long (some well over 20 percent at points, second only the pharmaceutical and financial industries, according to Time magazine) that many conglomerates leveraged themselves heavily to buy newspapers up. The problem is these corporations got into so much debt that when newspaper profit margins dipped, it wasn’t enough to keep up with their unnaturally high debt service. The Tribune Company in Chicago found this out the hard way. Not so for the privately-held Hearst Corporation, who recently paid $500 million in cash for its new skyscraper corporate headquarters in Manhattan.

While crying poverty, however, the Times Union has refused to open its financial books to prove its dire predictions. It may not be a rosy picture, but it’s far healthier financially than a lot of companies that aren’t slashing a third of their staffs. Former publisher and current Hearst Senior Vice President Mark Aldam will tell you unions and workers are to blame for newspapers’ plight.

Here in the Capital Region – where our paper continues to turn a profit - we like to think that it’s the local reporters, editors, artists, sales people and customer reps that have made the Times Union what it is today. But despite its staff’s dedication to producing a product readers look forward to, we’ve all had to endure extreme corporate cost-cutting measures. As a result, readers have seen several popular sections dropped from the paper, or consolidated into only one. Local bureaus closed. Television listings have been cut. The OnTV section is threatened to be cut out altogether.

We don't believe making a lesser product – or outsourcing local reporting to far-off cities – is the answer.