Business of News: Newspapers Should Be Transparent About Their Financial Challenges

In my first summer as a copy desk intern (electric typewriters were in use), I heard the managing editor engaged in a lively but frustrating telephone conversation with a reader that ended in an unsatisfied sigh.

Trying to save money and newsprint, the managing editor had recently dropped the daytime TV listings. An elderly reader was upset because he could no longer see in the TV grid that “The Andy Griffith Show” was on every weekday at 3 p.m. “But it’s the same schedule every day,” the managing editor told him. “The schedule never changes.”

“Doesn’t matter,” Pete, our ancient rim man on the copy desk, observed. “He thinks you took something away from him and you can’t explain that away.”

Today we are taking a lot more than TV listings away from readers. We remove reporters, photographers and copy editors. We take away local content. We shrink the size of the paper.

And we try to explain it away.

I read letters from editors to readers filled with sophistry and vague promises to “preserve what’s most important to you—the reader.” This goes on from my local newspaper (which just moved up its final deadline to about 8 p.m. so baseball box scores are regularly one day behind) to the New York Times where the editor explains that losing copy editors will not affect the quality of the newspaper to a Phoenix-area weekly that just laid off reporters.

I call bullshit.

Readers know when they are being short-changed. And we damage our credibility when we are not honest with them. We should tell them that these are painfully difficult times for our industry and we want to keep bringing them a local paper. This means we cut expenses, just to stay in business.

Yet we tend to cover our own business with the finest in kid gloves and pink clouds. Job cuts and layoffs are reported piecemeal and rarely put into perspective. We don’t report the profitability of the parent company or its corporate tax rate. We cover the challenges facing our local non-profit community, but never mention how the newspaper’s support for those non-profits has been drastically cut.

And we have the nerve to demand transparency from the government agencies and businesses we cover.

If our currency is credibility, we cannot create a climate of trust with our readers when we are dishonest about our business’s troubles. We want readers to respect our mission; to reject the president’s claim that the media is dishonest. But when it comes to reporting our own financial challenges, we are dishonest.

The rarely reported truth of the news industry is that our owners and corporate leaders took their companies public in the late 20th century and put those profits in their pockets. Stock options became de riguer in our compensation packages. (I was one of those given lucrative stock options.) Instead of spending those enormous profits on research and development, we allowed our industry to be disrupted by innovators such as Craig Newmark and Jeff Bezos. They understood the secular change to the advertising model that too many of us dismissed as another cycle or passing fancy.

While other companies routinely sought millions from angel investors and spent it developing the websites and later the apps that took away the newspaper market for readers and advertisers, we spent less than half a percentage point on research and development.

Now we are scrambling to catch up, but we are like lumberjack staying atop a rolling log that is moving downriver fast.

Our credibility and our future depend on honest reporting about ourselves, so if you want to re-establish credibility with your readership, here are four things I would do:

1. Pay a local retired journalist to write a quarterly report to your readers and advertisers that details your circulation, profitability, advertising sales and employment numbers.
2. Convince Poynter or one of the other large newspaper organizations to do the same report for largest corporate owners.
3. Give a regular report on the amount of local news you are producing.
4. Give an annual state of your business report and invite the public to tell you what they want to know. Shape the report around their questions and not just the numbers that make you look good.

Tim Gallagher is president of The 20/20 Network, a public relations and strategic communications firm. He is a former Pulitzer Prize-winning editor and publisher at The Albuquerque Tribune and the Ventura County Star newspapers. Reach him at tim@the2020network.com.