US newspapers still profitable

Posted by Betsey Reinsborough on December 1, 2009 at 4:21 PM

Good news out of Texas today. According to the CEO of the Texas Observer, Carlton Carl, even amid the copious layoffs and budget cuts, most newspapers in the United States are turning a profit.

The Texas Observer is, funny enough, a bi-weekly not-for-profit political news magazine.

Despite the 160 American newspapers that have been shut down in the past couple years and the 30 000 staff who have been fired or laid off in the same time frame, the typical American newspaper is making money.

This good news, however, begs the question: if the papers are making money, then why all the closures and layoffs?

According to Carl, newspapers might be making money, its just not enough money for their owners. "The big secret of all this is that almost every daily newspaper in the United States is profitable. They are maybe not as profitable as those folks on Wall Street would like to see, but they are profitable nonetheless." The Wall Street owners, who were used to 30 percent profit margins, are now scrapping by on much lower returns.

Plus, there is always the chance that the only reason there are still profit margins at all is due to all of the cuts that have been made by the papers.

This also leaves out the current losses of many British newspapers, most particularly the Guardian, which reported this story. Why the huge discrepancy between the papers in the two countries? How will this news affect the continuation of layoffs in the States? Especially since, as Roy Greenslade points out in his article, most newspapers are not keeping the fact that they are making money a secret from staff or customers.

Source: Media Guardian