Sunday, March 29, 2009

Consolidation Is No Cure for Journalism Crisis

Craig Aaron writes:

Just a few years ago, the average profit margin for newspapers was over 20 percent - with some bringing in twice as much or more. But that did not satisfy the newspaper executives or Wall Street. Instead of investing in the quality of their products and innovating for the future, the big media companies have been obsessed with short-term gains. Instead of bolstering their newsgathering or adjusting to the new media landscape, companies like McClatchy, Tribune and Lee Enterprises used these astronomical profits to buy up other properties.

While federal regulators rubber-stamped these mega-mergers, the media giants took on massive amounts of debt. Even though newspapers themselves are still profitable, their corporate bosses are drowning in IOUs.

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