Debate Growing: Should Readers of Corporate Newspapers Cut Their Subscriptions

Thursday, January 02, 2020

GoLocalWorcester Business Team

Record cuts in media in 2019 - not just newspapers

Gannett, the new parent company of the Worcester Telegram and literally hundreds of newspapers across the country, is poised to lay off upwards 3,500 workers in the next two months.

The company needs to cut $300 to $400 million in costs according to the company and reports. "With $400 million or more in cost reductions to deliver, it was clear that the company would be cutting more than 2,500 jobs — likely 3,500 or more. Reports also indicate that much of Old Gannett leadership in high-ranking sales position was surprised to get the quick axe this week," writes Ken Doctor, a leading media analyst.

Now, some are calling for readers to drop their subscriptions to corporate newspaper chains and shift their readership and support.

Politico’s media writer Jack Shafer recently penned a column that proposed the move. “It’s not a popular thing to say, but journalism may be approaching the point where dedicated news consumers might take a hard look at their local newspaper and—in the interest of better journalism—cancel their subscriptions.”

“But when you pay for a newspaper, you’re also making a decision to send money to whoever owns it. And if you really care about local news, you might want to think twice about continuing your subscription to one of the 50-plus dailies operated by Alden Global Capital…Alden is cannibalizing its papers for profit in a way that should repel subscribers.”

One newspaper guild is urging readers to support their paper despite the cuts.

Memphis News Guild Tweeted about the cuts and that they were informed of additional cuts coming to the Gannett owned Memphis newspaper -- the Commercial Appeal.

First the Guild Tweeted, “We still don’t have concrete information from the company about potential job cuts in other departments, including advertising, or among managers not covered by the Guild. (Ours covers rank-and-file employees in the newsroom, advertising as well as some employees in other areas.”

And then Tweeted, “To readers, we ask that you continue to subscribe and support our work. The only way The CA can grow and prosper during these challenging times for local news is through your support.”

Gannett and McClatchy stock performance over 30 day period

Wall Street Not Buying

For the two largest newspaper groups in the country, Wall Street is in the selling mode. Both Gannett and McClatchy have seen their stocks plummet over the past month.

Gannett’s stock has fallen from a 52-week high of 11.99 to a Tuesday closing of 6.38. And, McClatchy’s stock is in free fall, dropping from a 52-week high of 8.25 to .449 per share — a 96 percent decline.

Expectations of 3,500 staff cuts at the Providence Journal's parent company

Record Media Cuts — Not Just Newspapers

Business Insider reports that, “In the past month, layoffs and cuts have hit Gannett, the CBC, and Highsnobiety, bringing the total number of media layoffs in 2019 above 7,700, according to Business Insider's tally. For comparison, it's estimated that some 5,000 media jobs were cut from the market from 2014 to 2017.”

New media has also had a difficult year with Gawker closing, Vice and BuzzFeed among others seeing significant cuts.

See the list of media cuts to date HERE in Business Insider.