Newspapers, Writing's on the Wall

This column was originally published on RealMoney on Sept. 13 at 8:50 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

Every time I think that my business is challenging, I think of what the newspapers face. The newspaper game, for the last decade, has been one of cost cuts and mergers. There's been no growth in the business.

Now, with regulatory authorities frowning on any further mergers, with the cost cuts already in place to the point where you might just as well run Associated Press copy throughout if you make more job eliminations and with newsprint and delivery costs through the roof, a bleaker situation looks, alas, even more bleak than I thought.

Nobody controls costs as well as Knight-Ridder(KRI Quote). But its negative announcement this morning reveals these newspapers as the ultimate value trap. They are losing on every line item. Now it's auto classifieds; they are down big. ...