When I think about the importance of journalism, I am reminded of my relationship with my younger brother. My brother is an ardent conservative. I am a liberal. We have been arguing for half a century. Most of those arguments are both frustrating and fruitless. He quotes Rush Limbaugh and I quote Barack Obama, and we have a pretty hard time finding common ground.
But we both read The Wall Street Journal. When one of us backs up our argument with a story from it, we actually have an interesting and satisfying discussion.
Journalism plays a critical role in my relationship with my brother. And I believe it plays a critical role for the community as a whole. Without an agreed-upon set of facts, we cannot have a community-wide discussion. We cannot have a functional democracy.
In most American communities, the daily newspaper supplies much of the content for this community-wide discussion. In Sacramento, that means The Sacramento Bee. At the weekly SN&R, we add to that discussion. But the Bee has historically done the heavy lifting.
But the times, they are a-changing. Over the last 10 years, daily newspapers have lost their traditional revenue sources. Like many other daily newspapers, the Bee has had to make cutbacks. The Bee editorial department is a shell of its former self, and the paper no longer makes a thump when it hits the front doorstep. On most days, it soundlessly arrives at fewer and fewer doors.
But the Bee still provides core news coverage, not only for its readers—if truth be told, most other media also use it as the primary source for their stories. Sacramento needs a strong daily newspaper. And that is why the McClatchy Company’s recent quarterly financial report is frightening.
It is frightening because the company’s print advertising dollars continue to decrease dramatically (down more than 16 percent from a year ago), while its digital revenue, which is the hope of the future, remains essentially flat. The continued trading of print dollars for digital dimes has forced McClatchy to cut staff and sell assets, including its real estate holdings. The overall revenue has dropped more than one third since 2010.
Still owing nearly a billion dollars from its ill-advised purchase of Knight Ridder, McClatchy is running out of options. If its print advertising revenue continues to decline at the same rate, McClatchy will need to cut something like $90 million per year, or around 8 percent, out of the budget. It can be done. But it can’t be done year after year. At a certain point, survival will become impossible.
Either the decline in print advertising has to stop, or vastly more money needs to be made in digital. And it needs to happen soon. What is frightening to my brother and me, and to anyone who cares about journalism, is that neither of these outcomes seems likely.