Media is changing around us and this article gives you a quick idea of just how bleak it is becoming for some companies. Similar problems are facing my hometown paper, The Plain Dealer, also owned by the Newhouse Family. The strong will survive and The Media Store is committed to helping independent local radio, newspaper and billboard operators thrive in the age of digital!
Re-print of article from Wall St 24/7
The Times-Picayune, the primary newspaper in New Orleans, was founded in 1837. It was just announced that it had been sold to its major rival. The deal will result in the layoff of every member of the Times-Picayune staff. It is another reminder of how hard the traditional newspaper industry has fallen.
The Times-Picayune has been owned by the extremely wealthy Newhouse family, via its Advance Publication umbrella. The company also owns newspapers in Michigan, New Jersey and Ohio. The family additionally owns Conde Nast, which publishes a number of magazines, including Vogue. Conde Nast has lost money for several years, has gone through several series of layoffs and recently added a new chief executive officer.
The Times-Picayune online operations use a brand called NOLA.com, and the entire Advance Publications New Orleans operation became known as NOLA Media Group. In 2012, the company decided to cut the paper's publishing frequency to three times a week from seven. It only printed the paper on Wednesday, Friday and Sunday. The moves were meant to save money. Competition from a rival paper caused the NOLA Media Group to return the frequency to seven days a week in 2014. The Baton Rouge-based The Advocate moved into New Orleans with its own paper and started to take business from NOLA and The Times-Picayune.
The owners of The Advocate, John and Dathel Georges, are the buyers of NOLA. It was their decision to fire the staff of their newly acquired company. In total, 161 people lost their jobs.
The deal shows two themes about the newspaper industry as it continues to implode. The Newhouse family has a net worth of over $12 billion, but they were not willing to use some of that fortune to save a major daily newspaper. The Georges family, on the other hand, was willing to take over the money-losing property, but only if it could cut its expenses to zero. The Georges have gambled that the brand is enough to keep subscribers and advertisers. It will use the infrastructure of The Advocate to support the bet With the 161 staff gone, that is a very little risk at all. The major financial cost to seller and owner was only the end of one of America's oldest major city newspapers.
Every city has to look to the New Orleans decision and consider whether it could lose its newspaper as well. Some cities have watched their major papers gutted already. Among the most well-known of these was the decision of owner Alden Global Capital to fire about a third of the Denver Post newsroom staff in 2018. Newspaper executives and city officials across the country attacked the decision as another example of a rich owner refusing to support local journalism. Alden's newspaper operation, Digital First Media, is in a battle to control the largest newspaper chain holder in the United States, Gannett, owner of over 100 newspapers, including USAToday.
It is hard to imagine that the decision about the Times-Picayune will not be followed by similar ones in other cities, or that the current owners of papers will continue to cut costs until there are none left. On a rare occasion, an extremely rich owner will save a newspaper. This has happened in Minneapolis, Philadelphia, Las Vegas and Boston. It is not a model the entire industry can count on. On the contrary, the rich owner of the Times-Picayune decided that it was not worth another dollar of investment.