Bailing Out One of the 20th Century's Best Business Models

What's black and white and red all over? Newspapers looking for a handout, that's what!


Here's a new holiday cocktail for you: Combine one part bailout seasoning with another part perennial journalistic self-pity, pour it out over the Christmas/New Year's publishing interregnum and presto!—it's time for patriotic men and women to get behind a government rescue of what was until very recently one of the most profitable sectors in the United States: The newspaper industry.

"We're more worthy of a bailout than the jokers on Wall Street," argued Kansas City Star columnist Jason Whitlock on Dec. 20. "You can't have a democracy without us. If newspapers are dying, so is our system of government."

Quite. Without Whitlock in the trenches covering the Big 12 North conference, how is the Republic to survive?

I kid (Whitlock can actually be a pretty interesting journalist) because I love. Newspapers, that is. Not necessarily their employees, and certainly not their employees' self-inflated, anti-competitive, and occasionally please-help-me-Washington ideas about how to get out of a mess largely of their own making. With a 100-year head start on putting the "new" in media and the "class" in classifieds, loyalists of companies that once printed money as well as papers now want the rules changed so that they can survive, or at least still afford private school.

Take former New York Times foreign correspondent Joel Brinkley, now a professor of journalism at Stanford (as an aside: how many industries are fortunate enough to have an entire wing of academia primed and ready as a backup employment plan?). Writing in the Dec. 21 San Francisco Chronicle—ironically, one of the papers that has embraced Web-based competition most effectively through the mere act of putting all its stories online, for free, at a static URL—Brinkley made the curious argument that giving news consumers what they obviously and understandably want (free news) was the biggest threat to print publications. "The newspaper industry," Brinkley suggested, "should ask the Justice Department for an antitrust exemption that would allow publishers to collaborate on a decision to begin charging for their Web sites….[I]f most papers in a region—San Francisco, Oakland and San Jose, for example—began charging for Web access at more or less the same time, many readers would likely subscribe."

Yes, and many (in fact most) likely would not!

Blaming the customer is the second-to-last refuge of any crappy industry, business, or organization (the last refuge being asking for a handout on Capitol Hill). As my ex-L.A. Times colleague and current Reason magazine Contributing Editor Tim Cavanaugh has noted in our pages, the paper we both short-timed for was filled with people making jokes about whether we could just "fire our readers." Over the recent holidays, an entire journalistic Festivus celebration of customer-blaming broke out over New Yorker finance columnist James Surowiecki's lament that, "The real problem for newspapers…isn't the Internet; it's us. We want access to everything, we want it now, and we want it for free." To extrapolate, if only us greedy human beings would realize that our very democracy was at stake, that we "are taking an active step in the formation of a country without a civic conscience," then we'd damned well volunteer to pay an unnecessary premium to keep our finest journalists in permanent six figures. Sounds precisely as convincing as the argument that enlightened voters will surely agree to pay extra taxes so that political campaigns can be financed through "clean" money.

At the risk of alienating what few old newspaper pals of mine still have jobs, the industry they (and I!) so cherish, which has suffered mind-blowing valuation losses and several dozen rounds of downsizing both in personnel and column inches, is still bloated after all these years, with costs that no publisher would dream of incurring if he was starting a newspaper from scratch in 2009.

In an era where there are no journalists left who don't have an e-mail address, newspapers still employ strange woodland creatures known as ombudsmen to "interface" with readers. On their first beer, newspaper hacks will talk bitterly about Jeff Jarvis and Mickey Kaus and Jay Rosen, all those ivory tower types who think newspapers could somehow be better with less staffing…and by the third they're talking smack about the writer across the hall who hasn't filed a thing in four months (and who never took any of the voluntary buyouts, for obvious reasons).

As I have had the privilege to experience, there still exists these 19th century things called "editorial boards," in which up to a dozen (though usually more like half that) wiseacres and a couple of dames sit around, listen to grandees, and between the lot of them write maybe 1,000 words a day of grave, unsigned, top-down wisdom about the State of the Union address (Hey! I wrote one of those!), or the latest fighting in Gaza. The opinion journalist Michael Kinsley, a man I once disdained but grew to have enormous respect for after learning what he tried to do with the L.A. Times opinion page, once wrote the world's most brutal (and ultimately self-defeating) memo on the insane economics of editorial boards…I can't find a public copy of it right now, but you can see a few of his similar sentiments here.

Suffice it to say, as one who is familiar with the numbers, you could probably print at least three Reason magazines (complete with website, blog, the whole nine yards) for the cost of one elite-newspaper opinion section, with its 14 pages a week. Are the elites three times better? You tell me.

Think of those economics—and of the fact that not one single ballyhooed newspaper poll organization added as much value to this year's presidential race as a lone Internet baseball geek named Nate Silver—the next time you see some politician push for government assistance to our endangered newspapers, or read some columnist confuse her own job security with the very health of the nation. Mark my words: This will not be the last time you hear about newspaper bailouts. Not if journalists have anything to say about it.

Matt Welch is Editor in Chief of Reason magazine.