Newspapers have money. Sometimes, a lot of money. They just don’t think it’s enough.
I suppose that the years of layoffs, furloughs and salary freezes have given people the idea that newspapers are broke. In fact, those actions have helped newspaper companies’ bottom lines. I’m sure that some newspapers are barely breaking even. A few may even be losing money. But they are the exception, not the rule. Most newspapers have profit margins that, while not what they were in the 90s, would still make other local businesses quite happy. Here’s the illustration: Warren Buffett isn’t buying newspapers if he doesn’t think they make money.
So, the real question isn’t “where is the money?” The real question is, what is the newspaper spending its profits on? And the follow ups: Is it investing in the future? Is it investing in its staff? Is it reducing the profit-taking so that more can be funneled back into the operation? Is it reducing its investment in the newsprint product so that it can increase an investment into digital news creation and distribution? Or is it mimicking Slim Pickens in “Dr. Strangelove,” riding the moneymaker to the end.