Newspaper advertisers can't reach the people they want -- the younger people, Jim Cramer said on TheStreet.com TV's Wall Street Confidential Web video Friday, in response to word from publisher Gannett (GCI) - Get Report last night that advertising is not so hot.
Advertisers want a particular demographic -- 18 to 35 years of age -- "and that cohort has stopped reading newspapers," Cramer told Gregg Greenberg, the host of Wall St. Confidential.
What people keep expecting is that somehow if the circulation, which tends not to be going down, stays steady, then advertising will stay steady, as well, Cramer said. "But the opposite is occurring ... because younger people don't read newspapers anymore."
Meanwhile, the people running these organizations, who tend to be in their 40s, 50s and 60s, are unaware of that. They're of the mindset that they can make deals "not recognizing the tremendous demographic shift away from newspapers," he continued.
They think if they change and produce edgier content, they'll be able to attract younger readers, Cramer said. But they need to realize that this shift "has directly to do with the fact that
newspapers are not the means that people
use to get information anymore."
"Newspapers are not businesses," he told Greenberg. "A business is something that grows and grows off of cash flow. When a business shrinks and has diminishing cash flow, it is not a business."
Cramer believes that what newspapers need to do is fire everyone. "When you're in trouble, what you do is cut people and get ahead of it on the expense side," he said. The chief financial officers at the newspapers need to realize that journalism is the most "expendable part" of their businesses and should just be cut out.
Fade to Blackstone
Moving on, Greenberg asked Cramer what it could mean for Wall Street if private-equity firm Blackstone goes public.
"It's important to be able to rip everybody off when you're hot," Cramer responded. "One of the things I love about Blackstone is they're very hot, so you just have to gouge the eyes out of retail."
"You've got to bamboozle as many people as possible to be successful on Wall Street," he continued. "This is the maximum bamboozle moment. I applaud them."
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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