Publishers Pull Out All the Stops

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Between the rise of the Internet and a slump in the advertising market among print publications, newspapers across the U.S. are instituting drastic measures to reverse their ill fortunes. To reduce costs, many are shrinking the size of their pages and slashing their staffs.

All too often, the bloodletting only slowed the inevitable, and the newspaper company ended up for sale anyway.

Knight-Ridder, one of the largest newspaper chains in the country, was swallowed up and spit out in pieces by a competitor. Tribune (TRB Quote), another publishing giant, went on the auction block, and the private equity sharks are circling. Weakness at the New York Times (NYT Quote) provoked a showdown with Wall Street over its corporate structure, and investors are eyeing some of its top properties.

For next year, the outlook remains grim. Cyclical conditions weighing on the industry are expected to get worse. Domestic auto dealerships, traditionally a large advertiser in local newspapers, are suffering from too many cars and too few dealers. Job growth and related employment advertising is slowing, and the once red-hot real estate market is expected to remain chilled.

That means newspapers will still struggle to find new ways to generate revenue streams and use the Internet to their advantage.

Some publishers will simply get out of the game. Tribune's largest shareholder, the Chandler family trust, has forced the conglomerate into cooperating with the whims of Wall Street, pushing the company to sell off its assets, which include The Los Angeles Times, the Chicago Tribune and a slew of other media properties.