When I debated with Glenn Greenwald, this is the kind of financial problem I was talking about. I have various problems with the Times, but in many ways they provide the broadest and deepest hard news coverage in America. They are also finding it very hard to stay profitable, even after adding all sorts of fluff like the Style section. That's the economic reality constraining editors.
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the 'comments' section covers many of the reasons why the NYT is sucking wind..
People, file under: Ripley's, get tired of being thought of as Fools--the NYT's declining influence/revenues should be a textbook example..
also, your title was correct, as opposed to: "That's the economic reality constraining editors."--the Economic reality constraining editors is, hardly ever, discussed in public...
That is not the argument. The argument is not that the news hole should be bigger. The argument is why is the news hole filled with stories that are of less consequence than, say, the president approving the use of torture. Or the routine violation of the 4th amendment.
The idea that Keller thought he would lose readership if he published a story that became a best selling book is just silly. He killed Risen's story for political reasons, not economic.
Debate? Hahaha!
Debate? Hahaha!
What day do they provide the money supply data? I suppose Investors Business Daily provides it as well.
Megan,
When I want you opinion I'll give it to you.
The problem isn't making a profit. The problem is that the stock market gods insist that the Times make a bigger profit every year. That isn't going to happen in this environment.
"stock market gods"= people who own the company
Newspapers traditionally got a major share of their revenues from classified ads. Today they're almost certainly losing many ads to Craigslist.
Peter-- Indeed. On those grounds, I highly recommend this post by David Bernstein: http://volokh.com/posts/1158866596.shtml
Dipstick-- I can understand disagreeing with our gracious host. The misogyny and contempt you've displayed in the past few threads has been truly disgusting, however. I am amazed she has left your comments untouched. Seriously, if you feel Ms. McArdle doesn't contribute anything to the debate, then there's lots of other blogs. I avoid Eschaton for precisely that reason, as one example.
Megan, in what way does this at all indicate that people don't care about John Yoo?
The article doesn't claim that the New York Times is losing money. "Financial problems" means that their profit margins aren't as large as they'd like. From an old article about the newspaper business.
It could very well be that if newspapers were a little less concerned with John Edwards's hairstyle and Obama's bowling scores and a little MORE concerned with blatant criminality in the conduct of our elected officials they could sell a few more papers. I personally am not interested in plunking down two bucks to read the Lifestyles section.
Also, what occurred between you and Greenwald wasn't a 'debate', it was a smackdown. It would be nice if you and Drezner et al would just have the grace to admit it when you're wrong, when GG goes to all that trouble on your behalf to make it so, so obvious.
It could very well be that if newspapers were a little less concerned with John Edwards's hairstyle and Obama's bowling scores and a little MORE concerned with blatant criminality in the conduct of our elected officials they could sell a few more papers. I personally am not interested in plunking down two bucks to read the Lifestyles section.
Also, what occurred between you and Greenwald wasn't a 'debate', it was a smackdown. It would be nice if you and Drezner et al would just have the grace to admit it when you're wrong, when GG goes to all that trouble on your behalf to make it so, so obvious.
Give this a try, these are words that I've used before and it really didn't hurt a bit: "You know what? You're right. You're absolutely right, I made a mistake and I admit it."
You might be surprised at how good it feels to be a true adult.
Nuttella,
I'll do you one better. Most Americans don't care about torture. (Maybe 30%, including you, me, and our hostess, do)
When the Times broke that story on the "black sites", there was a great deal of outrage. Because the Times had revealed classified information. Not because our government has been disappearing people. Not because some of those people were tortured.
Because the Times was viewed as disloyal.
If the great and good American people don't care about the fact that we are torturing people, why would they care what twisted legal reasoning Yoo produced to justify it?
And Bernard, just because you agree with Greenwald, that does not imbue his points with irrefutability. He's right that the media is a disgrace, but his explanation as to why strikes me (and quite a few other, smarter, people) as unconvincing.
You can conclude that everyone who disagrees with you is an idiot. Or you might wonder if your arguments are not quite so airtight as you first thought. In my experience, the second is true far more often than the first.
In my last post, I wrote, "The article doesn't claim that the New York Times is losing money." To be more specific, and more directly address Megan's point, there's no evidence that the New York Times is in danger of going into the red. "Financial problems" means that profit margins are down, not that they are "finding it very hard to stay profitable".
Frank Blethen, publisher of The Seattle Times, made a similar point in his testimony to Congress.
Howard Kurtz reiterated this point on CNN last year.
And from the 2008 "The State of the News Media" report:
Robert Torray, chairman of Torray LLC, which holds newspaper stocks including Gannett Co. and Tribune Co., told Bloomberg News the same thing.
Megan is wrong that the New York Times's trouble is due to people not wanting to read hard news. It is the direct result of two things:
1) the internet allows people to get all their news from a variety of sources all day long, sometimes in real time. We don't have to wait to read about events in tomorrow's paper and locals don't even have to buy the paper for movie listings (e.g. moviefone.com) or classified ads (e.g. Graig's List).
2) The paper's unrelenting liberal bias has made it popular with its liberal east coast base readership but it has lost credibility outside that base. I used to buy the Sunday NY Times when I was in law school in Dallas and my parents had the Sunday NY Times delivered to their home in Oklahoma in the early 1990's. No more, however. Daniel Okrent admitted to the paper's liberal bias and if I want to be fully informed on any given topic I know that I must consult other sources. Apparently, many former readers agree with me.
I personally am not interested in plunking down two bucks to read the Lifestyles section.
This isn't actually the idea. The idea is that people plunk down their buck and a quarter for the most important part of the paper, the front page, where there is no advertising. (There used to be little tiny two line personal ads at the bottom of the front page, now that I think about it.)
Then, as they are flipping through the rest of the paper, an article in the Lifestyle section, miraculously close to advertisements about products relevant to that article, generates revenue from those advertisers.
The farther from the front page you get, the thinner the Chinese wall between editorial and business becomes
And that's Glenn's point. The news hole is not filled by the stories that the market demands. Or, rather, to the degree that it does make such demands they are diffused over a long period of time making a judgment wrt the accuracy and relevance of the news chosen to be featured. The market doesn't say "run a bumiller piece on McCain fundraising" rather than "go with an update on the state of NSA wiretapping from Lichtblau."
Such long term judgments do get made. I watched network television news when I was a kid. Now that it has become nearly substanceless, I don't. If the Times front page consisted of stories deemed to be of immediate interest to their readership, like tips on using collagen more effectively, or whether Airborne is really a quack nostrum, their readership would eventually fall, while the WSJ's and the FT's would rise. But they don't dictate what Keller runs above the fold for any given story.
I suppose the flip side of this argument is USA Today, which is a sports paper that happens to have some news on the front page as cover.
Shorter heedless: running stories about important issues like government-sponsored torture is not profitable because most people are collaborators in evil. Shorter me: I agree.
Ned Ludd:
It reminds me of the old story about Walter O'Malley(who used to own the Brookyln/LA Dodgers). He came into the office one day bitching about losing $500,000. People in the office were upset. They thought they might be getting laid off and such. Later, after O'Malley left the office, one of the people asked the baseball GM why he wasn't upset as everyone else was. The GM said, "Walter is mad because he $500,000 and not $1,000,000."
Megan got steamrolled by a real journalist and she calls it a "debate."
Ludd: NYT posted a loss in the first quarter. Also, profit margins aren't really the relevant metric. Suppose business A has 20% profit margins and B has profit margins of 5%. Is A better? You don't have enough information. You need to know how much capital you need to invest to get those returns.
Suppose A is earning $20 million a year, and requires a lot of investment in fixed assets like presses, buildings, delivery trucks, etc: perhaps $2 billion. 10% return on capital is pretty good. Now cut profit margins in half on a lower revenue base. Not so good for a business with a lot of risks attached. What do you do when your press needs to be replaced?
Not-so-short me: Running stories about "important issues like government-sponsored torture" is not so profitable because some of us just plain do not trust the major media to not re-write the news to fit its political agenda, or to not try to disguise its opinions as objective "news."
All I ask is that they drop the sanctimonious crap about "presenting the news in a purely objective fashion" and actually admit that they might not be the absolute pinnacle of neutrality. Well, that's not really all I ask, but it would go a long way towards improving their credibility problems.
Honesty, even in overt bias > fake "balance" & "objectivity"
Funny you should say this, because it's a great example of the sort of "news" you get from the major media. Not real, solid facts that are supported, but sound bytes and incomplete (or just plain misleading) statistics put forth by the exalted editors who know what's best for us and want to shape our opinions.
Mainstream media: dramatic but inconsequential.
[end rant]
Will McLean —
I responded to your post but it got stuck in The Atlantic's spam filter (too long?). Anyway, here was my conclusion:
If you add up the numbers, the New York Times made $17 million and spent it on buyouts ($11.2 million) and bonuses ($6.2 million). I'd like to know who exactly is getting those stock bonuses. At CBS, Les Moonves gave himself a nice 28% boost in compensation as ratings and ad sales dropped. No idea if the New York Times executives are also sucking money out of their company as they plead poverty.
As for the buyouts, they are a result of the cost-cutting, not the cause of the cost-cutting.
So the profit margins for newpapers have reduced from 30% to 16%, yet they complain when ExxonMobile has a 10% profit margin!
Ludd:
Buyouts and stock award compensation are still expenses. And even if you set them aside as one time expenses, you only have a profit margin of 2%, at a time when the NYT's expenses for newsprint and delivery are rising rapidly.
Last year NYT had a profit margin of 6.5%, Lee 6.9%, Media General 1.15%, McClatchy had a loss. So far, 2008 is looking worse.
I quite like the style section, thank you very much!
Will —
If a profitable company gives away all its profits in bonuses and buyouts (bonuses for people who quit), it doesn't mean the company is on the verge of bankruptcy. Really, if things are so dire, what's up with $6.2 million in bonuses in a single quarter?
We saw this at CBS. CBS laid off people at three quarters of their stations, which leads to “fewer investigative stories, less fact checking and an increased use of promotional video news releases at their news outlets.”(LA Times) Three days later, we find out that Moonves, the “CBS Corp. chief executive, whose network is suffering from ratings and ad declines," gave himself a nice $8.2 million raise, for a total of $36.8 in compensation in 2007 (including $12.5 million in stock and option awards).(LA Times)
Regarding your 2% figure, newspaper profits are seasonal; like in retail, fourth quarter (ads for Christmas) is when newspapers make bank. In 4Q 2007, the New York Times made $53 million. A bad first quarter, which is typically slow and we're in an economic slump, does not mean OMG they can't make money with newspapers. The construction industry is in a slump, does that mean all the contractors should hand out big bonuses? Or just build shoddy homes, since the business has somehow fundamentally changed and nobody wants quality anymore?