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Pandemic reflected in newspaper industry’s struggles

The impact of the COVID-19 pandemic on the newspaper industry may be a reflection of the coronavirus’ impact on the nation’s health.

It is killing some and forcing others into changes they wouldn’t have imagined months ago. Just as the demand for health care has intensified, so has the demand for accurate information provided by newspapers.

Across the country and around Washington, however, newspapers large and small are staggering under the loss of revenue as some of their regular advertisers evaporate. And this comes on the heels of an unprecedented era in American journalism, when 1 in 5 newspapers in the nation closed over the past

Some, like The Spokesman-Review, are suspending a day of print publication, with other papers cutting even more days of the week.

Publisher Stacey Cowles said that by suspending the print edition of the Saturday paper at the end of April, the newspaper can avoid reducing staff hours at a time when there’s heightened demand for the local stories, photos and graphics they produce.

“What are people paying for, if not local content?” Cowles said. “We’re working even harder than usual.”

Some publications, like the Tampa Bay Times, are suspending five out of seven days of a news “paper” and hoping readers will follow them online.

Others, from Boston to Denver to Southern California, are announcing staff layoffs or furloughs. Some are even closing their offices entirely.

“We’re seeing revenue down anywhere from 30% to 70%,” said Josh O’Connor, president of Sound Publishing Co., which had newspapers ranging from the daily Everett Herald to small-town weeklies around the Puget Sound.

They’ve suspended publication for 20 of their free community weeklies, which relied on ad sales to cover the costs of personnel and printing.

“When Main Street has been literally rolled up … we just don’t have the revenue to fund those operations,” O’Connor said.

Some of the reporters have been assigned to work for publications still operating.

15 years.

The Everett Herald is on more solid footing, but that daily newspaper is still seeing a significant decline in revenue, and cut some staff members from 40 hours a week to 24 or 32 hours.

Pat Grubb, the publisher of Point Roberts Press, operates the Northern Light, a free weekly in Blaine, Washington, and other communities along the border between the United States and Canada. At the the start of the year, he said, 2020 was shaping up to be the company’s best in several years.

That was five weeks ago. Two weeks later, the start of social distancing and business closures began affecting major advertisers like casinos and restaurants.

“Boom. They went,” Grubb said.

Hours were reduced for the 11-person staff and the company began cutting costs wherever it could. He also did something the company had been thinking about for a while – asking for a contribution of $24 a year, or less if a reader couldn’t afford that amount. In a full-page ad, Grubb explained that because of the coronavirus crisis, this paper’s old business model “is no longer tenable.”

As of last week, the paper had received 352 responses, some of them with more than the paper requested. Grubb was also cheered by the comments and compliments that came with the checks.

It was like the Sally Fields’ acceptance speech for her Oscar, he said. “They like us, they really like us.”

Unlike some industries that were enjoying a boom in recent years because of the nation’s strong economy, many newspapers were struggling and some were closing even before the pandemic hit. For years, hedge funds have been buying up newspapers of all sizes, sharply reducing staff and the local content they produce, along with selling off assets to make high, short-term profits.

That is creating “news deserts” in some areas of the country, and “ghost newspapers” with little or no local coverage in cities and towns that once had strong local papers, said Frank Blethen, publisher of the Seattle Times. Over a two- or three-year period, the funds milk the profits out of a paper for their investors, then sell what’s left of it, he said.

The COVID-19 pandemic is accelerating those timetables for some hedge-fund owners, stepping up furloughs and layoffs because “they’re good at not losing money,” Blethen said.

Locally owned newspapers like The Spokesman-Review and the Seattle Times are not immune from the same economic pressures, such as the loss of some advertising to the internet and the closure of some national retail advertisers.

“We’re as concerned about the future as everybody else,” Blethen said. “We’re looking over the abyss.”

But if there is a “silver lining” to the current crisis, it’s this, he said: “It’s become abundantly clear our free press is on life support.”

That realization could become a “catalyst to do something,” which he hopes will include more local ownership, possibly by community groups, of newspapers sold off by hedge funds and “reform of the internet for the public good.”

Both The Spokesman-Review and Seattle Times have seen increases in subscriptions, both for their print editions and their online product, as they increased local content. But that doesn’t make up for the loss in advertising revenue, which is declining further with an economy on partial quarantine to fight the pandemic.

Many newspapers charge for online content through what’s known as a “pay wall” that only allows limited number of stories to be read without subscription. But when the COVID-19 outbreak started, The Spokesman-Review and others put all stories about coronavirus outside the pay wall, allowing any reader to access them.

Some industry analysts have criticized that decision. It’s noble, Howard Saltz, former publisher and now faculty member at Florida International University, wrote this week for the Poynter Institute. “But it makes no sense.”

With revenue down and demand for your product up, it’s a bad business strategy to give that product away for free, Saltz wrote. To journalists’ refrain that “news is essential,” he counters that so are food, clothing and medicine. The supermarkets, retail stores and pharmacies aren’t giving those away for free.

The Spokesman-Review has tightened up slightly the coronavirus stories available for free, Cowles said. But anything involving public health and stories by the paper’s lead medical reporter, whose salary is partially funded by grants and the nonprofit Report For America, will remain outside the pay wall.

The federal response to the looming economic crisis also could result in newspapers applying for loans that could become grants if a company keeps employees on its payroll.

The Spokesman-Review is looking into that, Cowles said, although he expects the available money to be snapped up quickly. There’s also a reluctance of getting too reliant on federal programs for an entity that has government watchdog as one of its key roles.

“We can’t be too dependent on the government, whose hand we might choose to bite,” he said.

But in the current emergency, there may be a good rationale to request that grant.

Most publishers and industry analysts say the newspaper industry won’t be the same when the economy recovers from the COVID-19 pandemic, but no one is sure what it will look like in six months or a year.

“Like COVID-19, I think we’re going to get through this,” Cowles said. “But the transition is tough.”

Around the country

A quick glance at how newspapers around the country have dealt with financial woes of the industry, which have been accelerated by COVID-19:

  • The Gannett newspaper chain, including USA Today, is furloughing employees. Many who make $38,000 a year or more will be required to take a week of unpaid leave.
  • The (Cleveland) Plain Dealer, the largest newspaper in Ohio, laid off 22 newsroom employees on Friday. The Plain Dealer is part of Advance Publications, which also owns the Oregonian, the largest newspaper in Oregon. The Oregonian cut home delivery to four days in 2013.
  • The Tampa Bay Times reduced print publication from seven days a week to two – Sunday and Wednesday. Last month, the Times laid off 11 journalists.
  • MediaNews Group (MNG), formerly Digital First Media, owned by the hedge fund Alden Global Capital, made unannounced cuts this week. The Denver Post, already hard hit by cuts, laid off 13 employees and the Boston Herald laid off six.
  • MNG’s Southern California papers, including the Orange County Register, the Los Angeles Daily News and nine others, lost six newsroom employees and sports and features staffers were furloughed for two weeks.
  • The Dallas Morning News announced pay reductions for the newsroom staff. A 3% cut for those making less than $45,000 and an 8% cut for those making more than $45,000.
  • The Adams Publishing Group, which owns dailies and weeklies in 22 states, including the Idaho Press in Nampa, reduced work weeks from 40 hours to 30, a 25% pay cut.
  • Lee Enterprises, the fourth-largest newspaper chain in America, announced pay reductions or furloughs equivalent to two weeks of salary.