A couple of weeks ago, a newspaper where I once reported was essentially given away by its owner. The Tampa Tribune, which had an estimated value of about $400 million less than a decade ago, was sold for $9.5 million — a 98 percent markdown.
However, the paper’s land and building are worth $10.7 million. So the Tribune — about the size of the St. Paul Pioneer Press — was unloaded for less than its owner could have gotten by closing the doors and selling the riverfront property.
Media General was so eager to exit the newspaper business that it was willing to pass up more than a million dollars to wash its hands of the struggling outlet.
Why should you care about a newspaper in Tampa?
Because the Tribune’s sale was just one of several disturbing news items that surfaced recently about the newspaper business, which continues to circle the drain. (The Star Tribune — for now — may be a happy exception, as my MinnPost colleague David Brauer and I have both reported.)
Gannett, the nation’s largest newspaper publisher, reported its third-quarter results last week. Gannett makes a good proxy for the newspaper business as a whole, because its 80 or so newspapers are in all parts of the country and include large, medium and small outlets.
The company beat Wall Street expectations — but only because its TV stations are flush with ad dollars from the Olympics and political campaigns.
Ad revenue at Gannett’s newspapers continued to slide, down 6.6 percent in the quarter. Gannett put a happy face on the news, noting that the rate of decline was less than in recent quarters. But no business can survive for long if it’s delighted when its revenue falls only 6 percent every three months.
What’s more troubling is that Gannett’s revenue from digital advertising grew only 4.7 percent.
Ever since the Internet started destroying the print advertising business in earnest — around 2005 or so — newspapers have counted on rapid growth in digital revenue to make up for their losses on the print side.
But their rosy scenarios of endless double-digit growth in digital dollars haven’t panned out. The publicly traded newspaper companies, which must report their financial results, in recent years have consistently shown only single-digit gains in digital revenue — if not declines.
Digital advertising sells for much less than print; newspaper people refer to “trading print dollars for digital dimes.” And now newspapers’ fragile base of digital advertising is threatened by mobile, which is cheaper yet. Those digital dimes are becoming mobile pennies.
Perhaps the most frightening news came from a study by the Pew Research Center. Pew reported that only 23 percent of Americans read a print newspaper yesterday. A decade ago, 41 percent reported reading a print newspaper the previous day, meaning that daily print newspapers have lost nearly half of their readers in just 10 years.
Ah, but they must be reading it online, you say. Not so much. The Pew study found that 38 percent of Americans said they regularly read a daily newspaper, in print or online. But that number, too, has dropped significantly. Only eight years ago — in 2004 — 54 percent said they regularly read a daily newspaper.
To twist a line from one of the great newspapermen, Damon Runyon: Some genius in the newspaper business may discover the magic formula for survival. But that’s not the way to bet.