Local newspapers staying healthy
Despite declining advertising dollars, Rockbridge area newspapers have managed to avoid the bad debt, widespread layoffs and revenue losses plaguing the national newspaper industry.
Regional newspapers haven’t been so lucky.
Employees of The News Leader in Staunton will be forced to take a five-day unpaid break this year because of financial troubles, along with employees of the other 85 daily newspapers owned by Gannett Co. in the United States.
According to the Newspaper Association of America, total print and online newspaper advertising revenues fell by $8.9 billion in the third quarter of 2008, an 18 percent drop from the prior year.
The immediate reason: Car dealerships and real estate companies, which are two major sources of advertising revenue, have cut advertising costs following the recent decline in those industries.
That means less revenue for newspapers, many of which depend on ad dollars for a significant part of their revenue.
But local papers are by no means immune to the industry’s woes.
“The last [months], I would say since October, are among the worst business conditions I’ve seen in the last 30 years,” said Jerry Clark, editor and publisher of the Rockbridge Weekly.
Clark estimated there has been a 10 to 15 percent decrease in advertising revenue from last year.
“We’re all having to be innovative,” he said. “The practices that you would normally espouse in excellent times are not necessarily the rule of thumb now ... there are some things that are necessarily going to suffer.”
With tighter finances, the paper may not be able to invest as much money in covering events, he said.
Matt Paxton, publisher of The News-Gazette, said his paper was hardest hit at the end of 2007.
“We were saying, well, there may not be a recession other places, but there certainly is one in advertising,” he said.
Paxton cited the decline in ads from car dealerships and real estate agencies as a reason for the initial financial stress.
“Those are big categories for any newspaper,” he said.
Since the initial drop, Paxton said, he has seen revenue stabilize in recent months, in part because the paper has made its advertising rates more competitive.
Paxton added that the newspaper has no plans to cut staff. If the News-Gazette needed to cut costs, it would use fewer freelance writers and increase the work load of its current staff, he said.
Doug Harwood, publisher and editor of the monthly Rockbridge Advocate, has managed to avoid a significant downturn by tapping into a niche market.
“I’ve been extremely fortunate,” he said.
Harwood said advertising revenue has remained steady; he makes enough from subscriptions and newsstand sales alone to break even. He credits that, in part, to the fact that the Advocate isn’t published online.
“There’s sort of a vacuum [of news] here, except for the newspapers, which is a good thing,” he said.
Harwood thinks that his newspaper’s local approach and the town’s older, well-educated demographic both contribute to his success. He said that while the paper isn’t growing or becoming more profitable, he has been sheltered from the loss of advertising that has hit other newspapers in the county.
But all the local publishers said they are glad to be dodging the financial troubles experienced by big public companies such as Gannett Co. and The New York Times Co.
Unlike the metropolitan dailies, the local weekly and monthly papers have managed to keep things simple and stick to a business model that sells.
“I haven’t bought a baseball team, don’t plan on it,” Harwood said. “I haven’t bought a building, I haven’t tried to take over 150,000 newspapers with somebody else’s money, so the paper doesn’t really have any debt, and I don’t really plan on getting any.”