The Tampa Bay Times, owned by the Poynter Institute, a nonprofit devoted to educating journalists, made its second round of layoffs this year. Hearst, which many people consider the best-run newspaper chain in the United States, laid off staff at its Connecticut papers. Industry observers worry this means that third-quarter results from the industry will be as bad as, or worse than, they were in the first half of 2018.
The Tampa Bay Times cuts totaled 16 in its newsroom. The Hearst Connecticut layoffs included 30 people in all. Some of these people were laid off. Others received buyouts.
More evidence of trouble in the third quarter came from the results of A.H. Belo Corp. (NYSE: AHC), which owns the Dallas Morning News. It posted a loss of $1.0 million, compared to a profit of $2.6 million last year. Overall revenue collapsed 19% to $49.1 million. Circulation revenue fell 5% to $17.9 million, compared with the same quarter a year ago. Many newspapers have tried to produce online subscription revenue to offset print circulation dollars. The struggle has been largely unsuccessful around the local newspaper industry, with the sole exception being the New York Times.
Even if the third-quarter results for the balance of the industry are not as bad as those of A.H. Belo, they could decline between 8% and 10%. This kind of drop almost certainly means layoffs now or in the near future. A recession next year almost certainly would steepen the decline.
The culprits for the disintegration of the newspaper industry are often listed as Google, Facebook and Amazon.com. Among them, research shows, they hold two-thirds of the nation’s digital ads. The total market has been estimated at over $125 billion.
The newspaper ad market is not that simple. Daily newspapers have undermined their own ability to sell online subscriptions because they have lowered the quality of their products with repeated layoffs. It is a downward cycle that will be hard to arrest.
The third-quarter financial results for newspaper companies almost certainly will be as bad as the first half. Next year could be worse.