If you’re looking to brighten up your day, don’t bother reading Mark Potts’ latest blog entry. Riffing on a financial analysis by Alan Mutter, Potts speculates about what could happen to newspaper companies as the biggest titles enter penny-stock territory. It isn’t pretty.\

The scenarios are similar to those we’ve suggested before. At some point, newspaper companies become too cheap for investors to ignore and the vultures move in. The lucky companies will get picked up by buyers who have a vision and an interest in sustaining local journalism (help us, Rupert!). The unlucky ones will become the property of someone whose agenda is solely profit and asset value.

Most investors who would buy in under those circumstances are not Mudochs and Zells; they are speculators and gamblers. They’ll be looking for an opportunity to flip their holdings for a quick profit and they won’t particularly care how they reach their goal. In the worst case, Potts sees print editions being axed entirely and newspapers stripped down to delivery routes and printing presses for the sake of distributing advertising circulars. Impossible? Digital Equipment Corp. went from the second largest computer maker to a rounding error on H-P’s balance sheet in five years.

A more positive scenario is a new ownership that cuts costs deeply and tries to reinvent the organizations around the value of their brands. Neither option is very appealing to the employees of these organizations, however. Let’s hope there are still some publishing entrepreneurs out there who see newspapers has having more value than just the sum of their assets.

Stockholders of E.W. Scripps Co. can’t be too pleased today after Standard & Poors downgraded the company’s debt rating five full notches from “A” investment grade to “BB+” junk bond status. The good news is that Scripps Network Interactive, which was split off from the newspaper-heavy E.W. Scripps just two weeks ago, got an “overweight” rating from J.P. Morgan, which set a 12-month price target of $55, about 35% above the current share price.

Anonymous Sources Alive and Well

Slate’s Jack Shafer has an interesting approach to analyzing the continuing use of anonymous sources by major newspapers. He created a few Google Alerts to look for words like “anonymity” and then looked at the stories to see if the secrecy was warranted. In most cases, he finds that that the anonymous quotes are  either obvious, self-serving or contribute nothing to the story. Shafer ranks the value of the quote on a 0-5 scale and maps the whole thing out on a Google spreadsheet. The result is a good argument for better editorial oversight at the Times, the Post and other big dailies.

In most cases, Shafer finds that anonymity is unnecessary on the part of the reporter, the source or both. In some cases, the anonymity is baffling or silly, such as anonymous sources speculating about things that any rational person would speculate about. The columnist reasons that this is an example of reporters citing a source for the sake of showing people that they talked to someone. Of course, the quote and the source could be made up, so it doesn’t really matter.

There’s no overarching point to the exercise other than to demonstrate how generously these “anonymice” are still used in the most respected publications in the US just five years after the Jayson Blair scandal called attention to the problems of that practice . Shafer notes that the paper reporters love to hate – USA Today – prohibits anonymous sourcing.

Miscellany

• The Bay Area Newspaper Group – East Bay, which has been the target of union organizing activity recently, laid off 29 people at the Contra Costa Times on Friday, saying the decision had nothing to do with union-organizing activites at paper. Laid-off employees disagree and plan to challenge the move.
• David Paulin comments cynically on a recent American Journalism Review piece about journalism schools sending their students on overseas reporting assginments. He notes that at a time when news organizations are cutting back sharply on foreign correspondents, students eagerly spend thousands of dollars to go to remote and even dangerous places to file stories in the hope that they might possibly get picked up by a major newspaper without compensation. We guess it’s not exploitative when those being exploited volunteer for the opportunity.
• We suppose we must reluctantly acknowledge one of the silliest publicity stunts in recent memory. That would be the Durham, NC reporter-turned-lawyer who is suing the Raleigh News & Observer for breaching his contract as a subscriber by laying off 70 people and cutting back on news pages. The lawyer says he’s not interested in the money and is trying to issue a wake-up call to the industry. The N&O‘s executive editor says the lawyer should pay the newspaper more for the great value he’s getting. We are amazed at the volume of coverage this dumb story has generated. And we suppose we are also now part of the problem.
• The Death Watch apparently stirred things up at the LA Times pressroom, which has banned employee tours, apparently out of safety concerns. As one of the last civilians who snuck in before the new rules went into place, we want to thank Edward Padgett and tell his supervisor that we were never in any danger.

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This entry was posted on Wednesday, July 16th, 2008 at 11:27 am and is filed under Fake News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.