Daily newspapers have been trying for their entire lifespan to adjust to the rigors of business change, and the cyclical impact of a news-consuming public. In today's current environment; the significant, if not massive, amount of public ownership of the print media conglomerates is such that profit margins will be squeezed for years to come. Little to nothing could or can be done given the drive to satisfy major stock holders, market analysts, and private equity firms.

And in spite of yearly protests by major clients, the warnings as to excessive profit margins always fell on deaf ears in corporate halls. Those profit margins often reached into the high '30's and even 40% in the lessor competitive markets.

Understanding the basic nature of news gathering, their organization structure, and the under pinnings of culture, background, and history explains some of the monetary greed. Newspapers, regardless of their 24 hour daily, rigorous turnaround, are still very slow to change. The warnings of pundits have not significantly altered this reluctance to embrace new methods of gathering both news and advertising. It has been, for too long, a very labor intensive business. The year of 2006 and 2007 has seen and will likely see the most layoffs, buyouts, and downsizing within the industry.

Every major wrinkle in the news world, the Internet, and retailing has portended a negative impact upon sales revenues and profit levels. These major paradigm shifts have been occurring with more rapidity over the last couple of years.

I will add a couple of very personal observations before continuing. This will help to elucidate, and educate as to the scope of the problem.

We hired an outside sales consultant in Tucson, Arizona to help us identify major strategic issues, and to set out on a new path of improved performance. That cost was in excess of $17,000. Yet, an attempt to negotiate an additional 25 cent an hour wage increase for an advertising assistant was refused. Likewise, we had at our disposal a marketing director at the beginning of my term but this post was eliminated shortly thereafter.

A second example. A major Top 10 newspaper market had a promotion budget of $600,000. After new ownership, the top "private" executives have made a commitment of $6 million in annual expenditures.

The solutions won't come easy but here a few. If "they" should so decide to be sharp, observant, a bit radical, and able to take risks.

1. Lease out small office space for reporters in remote locations located within the smaller community settings. Remote transmission of news to central locations.

2. More shared commercial printing options where possible.

3. A second and third print run for updated news editions. This may only include the "main sheet," sometimes referred to as the "A" Section.

4. Negotiated ad rates based on circulation gains; rebates and adjustments based on annual performance.

5. Advertising sales reps with greater personal sales time freedom. This may include a shift to a 4-day, 10 hour day. Where possible and plausible, some senior ad reps may be able to work out of home.

6. Maximum promotion of all Internet newspaper websites, and affiliated co-partners.

7. Reduction in corporate executive stock inducements. Pay based on performance, and not stock price fluctuations.

Newspapers have a real challenge. It will likely mean more ownership changes, and more hardship for some. The easy attempt to downsize middle management, and to turn-over the entire sales staff will not stem the final "tide."

Learn more about this author, Robert Twesten.
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