Robert Picard: FTC Staff Wrongly Claim Newspaper Losses in Journalism "Reinvention" Document

The media economist and blogger says most newspapers still make money. So why "save" a profitable business with average margins of 12%? (ht Matt Creamer, BreakingMedia)

The FTC’s staff ignores the fact that most newspapers are profitable (the average operating profit in 2009 was 12%), but that their corporate parents are unprofitable because of high overhead costs and ill-advised debt loads taken on when advertising revenues were peaked at all time highs. It also fails to make adequate distinction between longer term trends affecting newspapers and the effects of the current recession. The staff thus blends the two together to give a skewed picture of the mid- to long-term health of the industry.