Circling the Wagons

The Commercial Appeal takes drastic measures to cut costs.



When I worked for The Commercial Appeal in the 1980s, the bureau system was one of the strengths of the newspaper and gave it a regional presence. So I was sorry but not surprised to hear that suburban bureaus may go the way of regional bureaus as the paper circles its wagons and tries to shrink its way to prosperity.

Bureaus in towns like Tupelo, Greenville, Jackson (Tennessee), and Blytheville were like baseball's farm clubs where young reporters could get a tryout, a big coverage area, regular bylines on a customized page or two in the paper, and a lot of early deadlines in return for very little money. Some excellent reporters, including columnist Rheta Grimsley Johnson, came out of the bureaus and went on to establish national reputations. More recently, the CA has invested heavily in suburban bureaus, getting reporters out of its building at 495 Union Avenue.

I bring this up not by way of nostalgia but as one more indication that the daily newspaper as a Memphis institution is, if not on the way out, a pale imitation of what it once was. The CA had bureaus in Arkansas, Mississippi, and West Tennessee because it also had readers in those areas. The geography of Greater Memphis, once a source of strength, became a liability because of printing, distribution, and staffing costs.

According to Audit Bureau of Circulation reports on March 31, 2008, the CA's Sunday paid circulation was 190,828, while other days averaged 149,898. Shelby County accounted for 135,761 Sunday papers and 119,888 dailies. Internal documents obtained by Memphis magazine show that in November the Shelby County circulation numbers had fallen to 123,687 Sunday and 99,958 daily.

So the CA, like other dailies, laid off employees, raised subscription prices, and relied more on freelance writers and freebies to fill its pages. Just how bad are the financials? We don't know. The CA is owned by the E.W. Scripps Company, a chain that does not break out the accounting for individual properties. Editor Chris Peck declined to comment about layoffs and bureaus. But bad is a relative term: the Scripps newspaper division, and presumably the CA, which is one of its largest properties, makes money.

According to public filings, Scripps newspapers earned $58 million in profits on $431 million of operating revenue in the first nine months of 2008. Not great, but hardly a General Motors-style loss either. Daily newspapers make money so publishers keep printing them. Online ads brought in $28.7 million, only 7 percent of this year's revenue at Scripps. That could improve as sales people force advertisers to buy both the print paper and the jazzed-up online version. But the print-Internet debate obscures another issue.

It makes no sense for a daily paper in Memphis to be owned by a company in Cincinnati that closed its hometown paper last year. There are no Memphians among the major stockholders. The big brainstorm of 2008 — splitting the newspaper division from the broadcast division in July — has been a flop. In four months, the post-split stock price has fallen steadily from $11 to $3.75, defeating the stated objective to "provide the company with a cushion against trading of the shares below $5 a share."

A newspaper cannot serve both readers and corporate masters and shareholders who demand dividends and rising share prices. So what's next?

"I can see a day within five or ten years where dailies become once a week — a weekend print wrap-up of news you followed on the Internet already," says Susan Adler Thorp, a Memphis print journalist for 30 years who now does media relations. "In some form the CA will survive. Memphians have always had a love-hate relationship with their newspaper, and that in itself will help."

David Arant, chairman of the journalism department at the University of Memphis, thinks print subscribers may have to pay more but "as long as there is a market they will keep cranking out papers and providing home delivery."

Arant's big concern is that there won't be enough revenue from whatever sources to pay for the reporting a democracy needs.

"I don't want to have to rely on citizen journalists who have a point of view," he says. We're still looking to the future, trying to grow new journalists, but you've got to have some jobs out there."

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