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One would have to be professionally medicated to ignore all of the bad news concerning the newspaper business. There have been well-chronicled declines in subscriptions, circulation, display ad revenues and classified ad revenues. Despite the fact that newspaper internet sites generate many more readers (it has been estimated that at least 20 times more people read the online version versus the print version), the online revenue is insufficient to make the newspapers profitable. As a result, industry layoffs continue and many newspapers have written their own obituaries.

Many media experts have fixed the blame for the traditional newspaper's decline on the changing tastes of readers - especially younger readers- favoring the internet. This is, of course, part of the problem, but there are several other, more complicated reasons, for the depressed state of the industry.

The technology that led to a fragmentation of all media and concurrent competition for the limited time of readers have made the daily newspaper more of a relic and less of a resource. The grim reality for newspapers and broadcast networks is that with cable, the internet and mobile media, there is no dominant mass media and there hasn't been for many years.

However, this change in media habits is not the only reason for the demise of the daily printed newspaper. That sound of howling that's coming from the fourth or fifth generation of wealthy newspaper scions is the result of a self-inflicted shot in the foot.

Stop the Presses!

A recent report by John Puchalla, a debt analyst for "Moody's," highlighted some antiquated allocation of operating funds on the part of companies that own daily newspapers. His report noted that just 14 percent of cash operating costs, on average, are devoted to content creation while about 70 percent of costs support the print distribution model and corporate functions. The other 16 percent is allocated to advertising sales, which is critical task that drives the majority of the newspaper's revenues.

It doesn't take Tim Geithner to figure out that this allocation of capital is insanity masquerading as a business plan. Readers buy newspapers for the content, not for super jazzy, high-speed printing presses and paper. Plus, nobody gets paid - including the writers, photographers, secretaries and the poor Schlemiels who invested in the newspaper company - unless some silver-tongued ad sales person brings home a lot of full-page ads.

One fundamental way for newspaper

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