News Biz: It could be worse, says Morton

The latest look at the news business by analyst John Morton in the December / January issue of the American Journalism Revew is heralded with these headlines:

It Could Be Worse
Although not nearly as profitable as in the past,
the newspaper industry is still making money.

“It's no secret that this is a stressful time for the newspaper business,” Morton writes. :”Already struggling with the challenge of the Internet, it now also confronts a grim economy. With revenue, profit and circulation plummeting, the result has been buyouts, layoffs and downsizing on a massive scale.:”

“Just how seriously has the industry's financial performance been affected?” Morton asks.

It may be bad, but the industry as a whole remains profitable. Here’s his report:

“Companies that have reported results for the first nine months had a weighted average operating profit margin (the total of operating profit divided into total revenue) of 11.3 percent. This is still above what is typical for most non-media businesses, but well below newspapers' average for last year's first nine months (16.6 percent) and continues the decline in average profitability that began after 2002's peak of 22.3 percent. The previous lowest average in all the years I have been keeping track was 13 percent during the 1991 recession. Cost-cutting, not better business, kept the current average margin from dropping even lower.”

Click on the headline to read Morton’s full report.