Trying to nail down specific operating costs from one newspaper is next to impossible. That information, naturally, is proprietary and confidential, as I came to find out in my handful of phone calls. But that doesn’t help anyone who is trying to analyze a newsroom’s business plan from afar. I know I will not be hired as an accounting consultant any time soon, but I really want to understand just how tough it is to survive as a newspaper in 2008. Are these massive layoffs necessary? Where else could be cut before personnel have to go?

I shot an email to Paul Kauppila, a reference librarian that works specifically with the school of journalism here at SJSU. The resources he pointed me to were invaluable (a list of which I will post PDQ), and I ended up crawling on my hands and knees bookhunting through the section of the library that dealt with newspaper issues.

I found something.

It was out of date, but it was the first hard numbers I came across. According to Philip Meyer in an essay that appears in “-30-: The Collapse of the Great American Newspaper” (page 75), a typical newspaper of 100,000 circulation in 2001 would have annual operating costs that look like this:

And income looked like this in 2000:

The advertising income was split up like this:

The obvious problem is, these are extremely outdated figures now. The newspaper industry has seen a drastic shift even since these 2001 figures were compiled, and especially with the rise of sites such as Craigslist and CareerBuilder that took away significant classified dollars from a newspaper’s gross income.

I mean, take a look here. Not too long ago, classifieds earned 40% of an entire newspaper’s income. Just to break even on that $55.48 million of operating expenses, classifieds would have to earn $22.2 million a year. Just classifieds. That was easy back in the day when newspapers had a monopoly on classified listings. That income has been since practically decimated.

I know there are updated numbers floating out there somewhere. Complicated Google searches didn’t turn them up in time to write my accounting paper on this subject, but the reference librarian forwarded me these links that I am going to delve into in order to continue this series: The Newspaper Guild, the National Newspaper Association, the Newspaper Association of America and the Audit Bureau of Circulations.

The next post will list some of the books and scholarly research we were able to dig up.

UPDATE: Bingo. Updated figures are here. I will expound later when I have a chance to digest.

ANOTHER ETA: I just found this fantastic interview with Craig Newmark. He is personally keen in saving quality journalism, even though his Craigslist is scapegoated for killing the news industry. Read his comments here.

Tags: business of news

Category: business of news