The Murder of the Times-Picayune: Part Two

PROFITABLE... JUST NOT PROFITABLE ENOUGH

A prominent lie told by those who want to excuse the murder of the Times-Picayune is that the newspaper ceased being profitable.

The Times-Picayune, as a seven-day-a-week paper, was profitable. Was it as profitable as selling cocaine? No. Was it as profitable as Wal-Mart? No. But it was profitable, even notably so among U.S. dailies.

Rick Edmonds, at the Poynter Institute, breaks down the numbers behind the Advance Corporation and Newhouse family decision to kill the Times-Picayune. He finds that cutting print editions is actually a money loser. It's the layoffs of 600+ staff across the South that make this profitable for the Newhouses, outweighing the loss of advertising income.

So despite NOLA.com Content Director James O'Byrne's asseverations about the burdensome costs of printing and distributing the newspaper-- or "Inkasaurus," as he calls it-- it's the firings of his former co-workers that are the real money-saver.

Edmonds uses data from Kantar Media in Ad Age and CJR to calculate that the Times-Pic's 2011 revenues were roughly $100 million. Profitable... just not profitable enough.

Writing for Fortune, Dan Mitchell establishes that the Times-Picayune has been continuing to make good money for its owners, inconvenient for those seeking to fit the murder of the Times-Picayune into a cliche print-is-dead narrative. "Advance's decision," Mitchell concludes, "isn't an investment in the digital future -- it's simply proof that Advance wants to squeeze every nickel it can out of the operation as quickly as possible."

One invaluable component being liquidated along with local jobs and a seven-day edition is the community's goodwill, described by Reuters blogger Jack Shafer as "the newspaper’s standing in the community and the habit of advertisers and subscribers of giving it money." It was the community's goodwill towards the Times-Picayune, especially post-Katrina, that made the newsstand and home-delivery price increases a couple years back palatable; it's why people were willing to pay more for a reduced page count. Shafer explains:

One reason an owner would want to extract a newspaper’s goodwill value before selling its physical assets – its real estate, presses, computers, trucks, paper, ink, etc. – is that traditionally, goodwill is where most of a newspaper’s value has resided. When [author of The Vanishing Newspaper] Meyer asked two newspaper appraisers to estimate how much of a newspaper’s value was locked up in goodwill versus physical assets, both gave him the same answer: 80 percent goodwill, 20 percent physical assets.

Stunning percentages. But in the marketplace, human affection is just another commodity to be traded on, albeit one that in New Orleans has evaporated perhaps more rapidly than the Times-Pic's owners expected.

For an organic example of how far that goodwill's fallen, look at everyone laughing, and riding, and cornholing when the robust new NOLA.com sent a bunch of naughty filler text live on the site's mobile platforms. The universal vicious glee over this mistake shows how badly we want to see these new-media technocrats toppled and humbled.

The community is rightly angered and feels injured by the loss of its newspaper. Back at Fortune, Dan Mitchell quaintly suggests, "There is a public-service component to newspapering that is often at odds with the pursuit of maximum profits... The question is, at what point does the pursuit of profit begin to do serious harm to the communities served by newspapers?"

Longtime New Orleans advocate Harry Shearer takes this argument further, suggesting in the Columbia Journalism Review that newspaper owners' mania for moneymaking violates a social compact:

The newspaper business lives off the benefits of free speech... Should there be a societal expectation that the proprietors of such privileged enterprises owe a little something back—perhaps a calm acceptance of a lower profit margin than could be attained, say, in the car-leasing business?

What these naive, starry-eyed idealists don't seem to understand is that Advance, owner of the NOLA Media Group, is a business. The Newhouses, who own Advance, are businessmen. For them, no entity will ever be profitable enough, not even when every silver dime has been wrung from it, not even when every last drop of goodwill's been monetized.

Capitalism demands that profits not merely continue but increase, always. When profits stop increasing, capitalism demands the very infrastructure of the enterprise be taken apart and sold, which is where the Times-Picayune is at.

Of course what we call "democracy" relies on, or assumes, an informed public, and a free press is theoretically tasked with keeping that public informed, but capitalism has no room for such things. Just as the more restrictive doctrines of religion eventually give way to convenience, lofty notions of "the free press" get scrapped for copper sooner or later in a world where only profits matter. An informed public isn't cost-efficient.

Even in this so-called Information Age, it's hard to deny how woefully underinformed the public already are. Replacing a record high-penetration newspaper ("a print edition that has the highest penetration among metro dailies in markets our size and larger") with a shitty website in a city with record low-penetration internet access ("Louisiana is ranked 44th out of 50 states in terms of broadband subscription, with just 51 percent of residents subscribing") has no relation to ethics, nothing to do with technology or our local reality; it's only about profit.

An informed citizenry holding the state accountable is an idea outdated as daily newspapers. In China, where they have in many ways perfected capitalism, the state has settled into its proper, pure role as a coercive, tax-funded adjunct to the business interests of the ruling class. We in the U.S. must cloak this approach in the language of encouraging and rewarding "job creators," but in China no such prevarication is necessary. Their state's apparatus of oppression nakedly and undilutedly exists to serve the absolute wealthiest. Consolidated, centralized control of media is one piece of that.

We're running to catch up, because capitalism demands it. Those petty privileges America's upper-middle-class took for granted-- that Bill of Rights stuff poor Americans never got in the first place-- were just inefficiencies for the global market to iron out. It's already too late to argue. All that's left is watching the pisant "free-market" advocates who mistakenly & inaccurately conflated their interests with those of the Romneys and Newhouses find out the hard way which side of the 99% divide they're really on.

The tarted-up tinpot tiny-town tyrants of Comus and Rex, who for all their faux-royal folderol couldn't even get an audience with the real decision-makers at Advance, are swallowing that bitter pill right now. Not even their generations of slave-earned wealth can buy them the newspaper they think they deserve. Oh, they're rich... just not rich enough.

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THE MURDER OF THE TIMES-PICAYUNE

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a six-part series on the destruction of New Orleans' daily newspaper

Part  One - Two - Three - Four - Five - Six

written by Jules Bentley