A Columbia grad student using Philadelphia newspapers as a lens through which to view the collapse of the industry has reached a startling realization: the whole time the (once-respected!) Philadelphia Inquirer and (once slightly less respected) (I can say that because I used to work there!) Philadelphia Daily News were grappling with declining circulation and unending job cuts, someone was making a lot of money off that! (Most notably this guy and a few south Floridian clients.) In fact, the smaller the newsroom staff got, the higher profit margins soared! By 2000 margins reached 19%. So then-owner Knight-Ridder cut some more jobs and got even higher!Yes well that is how this "market" thing works, folks. Though the commenters don't have to think it's fair! It sounds like "Reaganomics," they say. ("Also known as neo-liberalism.") On the other hand, as Inquirer business reporter Joe DiStefano points out. all the money former Knight-Ridder CEO Tony Ridder made certainly makes him look a lot smarter than any of his journalists wanted to give him credit for back when they were complaining about his stupid business strategies! Which brings up an important point: if anything good comes of the death of print journalism — no seriously, fuck trees — maybe it will be that more journalists finally grasp basic market principles. The grad student writes:

The first problematic aspect of the public / chain ownership model? The relentless focus on the quarterly bottom-line to the exclusion of a long term plan. In October 2000 the New York Times wrote this: "By almost any business measure, the Knight Ridder newspapers in Philadelphia would be deemed a success. Since 1995, profit margins at The Philadelphia Inquirer and The Philadelphia Daily News have more than doubled, reaching close to 19 percent after years of single-digit doldrums. Good? Absolutely. Good enough? Not for long. For 2001, the target margin is 21 percent. And now there is talk about 5 percent budget cuts at the papers, if not more. Anxiety is as plentiful as oxygen in The Inquirer's newsroom."

Because the relentless focus on quarterly results really is a bitch…for every company with a ticker symbol! Certainly, there are companies with controlling shareholders who take an interest in their long-term financial health. But they are the exceptions that prove the rule. You do not exactly get to be the controlling shareholder of a shitload of companies by being a big sap. If you are a "sap," you tend toward silly pursuits like journalism, which invariably break your heart, at least until you learn to appreciate the absurd game of clinging to an industry that incorporates variables other than the three required to conclude a PEG ratio. Philly Newspapers Under Knight Ridder By The Numbers via Romenesko