Monday, December 8, 2008

Tribune Company Files For Restructuring Bankruptcy, But the Unanswered Question Is How Can Its Newspapers Compete With Free News on the Internet

Today the Tribune Co. filed for restructuring bankruptcy. At the Chicago Tribune newspaper’s web site, Tribune reporters had this to say (here):

Chicago Tribune parent Tribune Co. filed for Chapter 11 bankruptcy protection today in Delaware so it can restructure its debt. The company said it has sufficient cash to continue to operate its media businesses, including publishing its newspapers and running its television stations and interactive properties, without interruption…. But the situation at Tribune Co., which has suffered from industry-wide declines in advertising revenue that have eroded its cash flow since the deal was done, is emblematic of the squeeze felt throughout the media business overall, and newspaper companies in particular.
The Chicago Tribune newspaper is the historical and perhaps psychological core of Tribune Co., which also owns other newspapers. To be sure, the recession has depressed newspaper advertising revenue, and the credit crisis has made it difficult for the Tribune Co. to handle its unusually high amount of debt. But these factors simply place the Tribune closer than most peers to the bleeding edge of the internet razor that is slicing through the newspaper industry. In the newspaper business, much of the advertising, the main source of revenue, is gone for good.

More and more people get their news and information from the web, and this trend will only accelerate. It is not clear how much value there will be for me, as an average customer, in the printed product. But the web site is a different matter. While I can easily get national and world news and information free on the web -- I don’t need the Tribune to supply me with that -- I need the Tribune for local news, which is hard to get elsewhere.

The Tribune needs to develop a compelling web news and information product that I’ll be willing to pay for; say, $30 a year. It would need to be focused on local news and commentary. The opinion must be balanced and fair, rather than predominately from the liberal point of view, and must not slant straight news stories. I recently posted a commentary titled “Sinking Liberal Newspapers Throw Readers Overboard, & the Chicago Sun-Times as a Case in Point” (here) about how the Chicago Sun-Times has responded to the newspaper crisis by becoming ultra-liberal not only in its opinion but in its reporting of straight news stories. Not very smart; I don’t need that.

It’s not clear that the Tribune understands that I really need it only for local coverage. For example, in yesterday’s print Sunday Tribune, about two-thirds of the front page of the sports section consisted of a giant picture of a college football player and an accompanying article. He plays for a Florida school. The stories of the college basketball games of Illinois, DePaul, and Notre Dame from the day before – all major teams with huge local followings – were somewhere inside, not as important to the editors as a story about a star player in Florida. I can read about star Florida players somewhere else for free.

The product people running the Chicago Tribune and the Chicago Sun-Times newspapers seem asleep at the wheel, at their best, or recklessly destructive, at their worst. They will not survive without a clear understanding that they need to provide news, information, and opinion that I cannot get elsewhere for free, in a balanced and fair way, at a price I’ll be willing to pay.

Additional local coverage and comments at Illinois Review (here) and Marathon Pundit (here). Also, see Hugh Hewitt (here); and see Michele Malkin's update (here) on the state of decline in the newspaper business. UPDATE: Tom Roeser weighs in (here), and John Hinderaker at PowerLine comments on the general state of the newspaper industry (here).
John Michael Greco