AP scoops the big boys

The websites of the New York Times and Washington Post were the last among the major national media today to report that John Edwards is dropping out of the presidential race.

It took the NYT seven minutes to top its site with the Associated Press scoop that cleared the wires at 9.08 a.m. Eastern time. The Washington Post got the story on its site a moment earlier.

Before the Edwards story appeared at the sites of the two pre-eminent national newspapers whose reputations rest largely on their mastery of political news, you could see the AP story at such places as Drudge Report, CNN, Fox News, MSNBC, USA Today and the Los Angeles Times.

At a time when editors at places like the LA Times are struggling to preserve the resources to cover such things as the presidential campaign, it is ironic that one of the biggest scoops of the political season came not from the ranks of the elite but from Nedra Pickler of AP, whose work is widely and economically available in real time to even the smallest newspaper, website or broadcast outlet.

Editors who wonder why the suits look askance at their budgets may want to ponder this.

How activists aim to help NYT

The activist investors seeking four seats on the board of the New York Times Co. are trying to help rescue an endangered public trust, not challenge the ownership of the company, says one well informed source.

“The next three to five years hold great risk and great opportunity for the New York Times,” says an individual familiar with the efforts of Firebrand Partners and Harbinger Capital Partners, the two firms who disclosed Friday that they have teamed up to seek the four seats on the 13-member board available to public shareholders.

“This is not a fight about the dual-class structure” that gives members of the Ochs-Sulzberger family effective control over the company, said the source, who requested anonymity. “The focus is purely on ensuring the health of an asset that will face erosion if the business continues to erode.”

In a transaction that took more than a year of quiet planning, Firebrand, a New York-based investment strategist, secured the financial backing of the $20 billion Harbinger hedge fund to acquire a 4.9% stake in NYT Co. The stake is worth some $113 million at today’s market price.

The source said the investors, who regard the company’s shares as “dramatically undervalued in terms of their potential,” would not discuss whether they are buying additional shares. NYT stock today closed at $16.07, a gain of about 10% from the 52-week low it hit last week in the days before the activists revealed their plan.

News of the effort to secure the NYT board seats broke a day after Harbinger publicly disclosed that it had boosted its stake in Media General to 21% of the company. “That’s a different deal,” said the source. “The transactions are unrelated and it was an unfortunate coincidence.”

The investors are pursuing the seats on the NYT board because they believe the company to date has failed to make the business decisions necessary for it to flourish in the Internet era.

“The greatest threat to the New York Times is the continued diminution of its business model and destruction of shareholder value, both of which imperil the company’s ability to invest in and maintain the tradition of journalistic excellence that has made the New York Times one of the most trusted brands in the world,” said the investors in a letter to management filed with the Securities and Exchange Commission.

“The board is incredibly impressive and experienced but really has neither the zeal nor requisite focus on what needs to get fixed in the business,” elaborated the source in an interview. “A strategic audit of the business would reveal core and non-core assets. The sale of non-core assets would free up capital for significant investment in new media, which can grow more rapidly at higher margins” than traditional media.

Non-core assets could include the International Herald Tribune, the Boston Globe, the regional newspaper group, a minority interest in the Boston Red Sox and even the company’s new Manhattan office building. (Estimated values of these assets are here.)

“The focus and future is online,” said the source, who stressed that the group has no preconceptions about what assets might be expendable. “What needs to happen is significant investment to accelerate growth of audience and revenue.”

Likely areas for new investment could be free-standing Internet sites like About.Com, as well as deeper online coverage by the flagship paper of such topics as business, technology, fashion and other topics coveted by premium advertisers.

Three of the four activist directors nominated for the NYT board are Internet-savvy entrepreneurs, whose backgrounds and outlooks are likely to diverge significantly from those of many of the members of the current board. The activist slate consists of:

:: Firebrand founder Scott Galloway, the former chief executive of the Red Envelope online shopping service.

:: Gregory Shove, a former executive at AOL during its heyday.

:: Allen Morgan, a managing director at the prestigious Mayfield venture fund who has invested in everything from Tagged, a teen social site, to PlanetOut, the gay media company.

:: James A. Kohlberg, co-founder of the private equity firm Kohlberg & Co.

As an example of what the source termed the “constructive dialogue” the activists hope to achieve with the NYT, he cited the group’s purchase in late 2006 of 11% of Gateway, a pioneering mail-order computer company that had fallen on hard times. The activist group, which gained two Gateway board seats, eventually helped guide the sale of the company to Acer.

Does that mean NYT could be sold, too? “I can’t see that outcome, unless the family is willing to do that,” said the source. “This is a long-term play focusing on growth, a realignment of assets and a real doubling down on the core business.

“No one is trying to portray this initiative as some sort of a benevolent act,” he continued. “But the investors believe the enhancement of the public trust is not at odds with the goal of profit maximization.”

Don’t shoot the messengers

Chris Harte and Brian Tierney aren’t enemies of newspapers. They are just messengers reporting the danger the industry will face if it doesn’t adjust its economics to the new realities of the marketplace.

Sniping at them won’t change the message. So, hold your fire and listen closely to what they have to say:

Newspapers like the Philadelphia Inquirer and Minneapolis Star Tribune are getting dangerously close to defaulting on their debt – a development that would require far more draconian layoffs and expense reductions than anyone has imagined to date.

Worst case, and no one is saying the worst case is upon us, some newspapers could go out of business. Then, where would we be?

In the interests of saving as many jobs and as much quality journalism as possible, it’s time for journalists – and their colleagues in the sales, production, circulation and other departments – to stop whining about the glories of yesteryear and start thinking of creative ways to make or save more money.

The deteriorating economics of the industry were underscored for the third day in a row this week when publisher Brian Tierney told union representatives of the two Philadelphia dailies that their company will face “a dire situation” by summer if it he cannot cut operating costs by 10%, according to a Newspaper Guild press release.

The Philadelphia meeting was reported the day after Chris Harte, the publisher of the Minneapolis Star Tribune, issued a strikingly similar warning to his staff.

Two days earlier, editor Jim O’Shea departed the Los Angeles Times after excoriating the evidently modest reductions in the $120 million newsroom budget that had been requested by his publisher, David Hiller.

At each newspaper, the story was the same. Profits are being sapped to an unimaginable and alarming degree by rapidly declining advertising revenues and rising expenses for everything from newsprint to payroll.

Tightening cash flow is a particular problem for the Philadelphia, Minneapolis and Tribune Co. newspapers, because each company has been bought within the last two years with vast sums of borrowed money. As such, a great portion of the operating profit at each company is earmarked to pay interest and principal on the newly acquired debt.

But an unprecedented and sustained deterioration in newspaper ad sales has brought profits in Philadelphia and Minneapolis dangerously close to the point that the new owners won’t be able to remain current on their loans. Purchased little more than a month ago, Tribune has more runway than the other two companies, but a steady decline of its profits, if unabated over time, could put it in a similar position.

Because all three companies are private, they don’t have to publicly discuss their finances. But it is possible to piece together the situation in Minneapolis, based on Chris’ comments and certain public pronouncements by his financial partner, Avista Capital Partners. And here’s the chilling picture:

The Strib’s operating profits fell by 50% in one year’s time to approximately $41 million in 2007. As recently as 2002, profits would have been more than triple that amount, according to knowledgeable sources, who asked not to be identified.

Chris declined to comment on these calculations, saying the newspaper does not publicly discuss its finances.

Based on what I estimate to be the structure of the financing that enabled the Strib to be bought from McClatchy in late 2006, I would put the annual interest on the debt at about $33 million.

If I am right, this would have left the Strib a scant $8 million last year to cover the costs of everything from website initiatives and new video cameras to replacement vehicles and updated pressroom equipment.

While the interest costs would remain essentially the same in 2008, weaker sales or higher costs could quickly erode the $8 million cushion. If the company could not fully pay its interest payments, it would default on its loans and the bankers would step in to restructure the business as rapidly and pitilessly as possible.

In the worst case, Chris and his partners at Avista could lose some or all of the $125 million that I estimate they invested in the newspaper.

Like Chris and Avista, Brian Tierney (plus his investors) and Tribune’s Sam Zell have put hundreds of millions of their own dollars at risk to try to save a few newspapers at the most perilous time in the history of the industry.

Who among us would have been willing to do that?

Pulp friction

Profit-pinched newspapers trying to save money by cutting back on the newsprint they consume will be hammered by a 23% increase in the cost of whatever paper they do buy this year, fears one analyst.

If Paul Ginocchio of Deutsche Bank is right, newspapers that already have trimmed page sizes, eliminated stock tables and scrapped op-ed sections will have no alternative but to pay the sharply higher price for newsprint – unless they can find even more ways to shrink their already shrunken newsholes.

Newsprint could rise to an average price of $700 per ton by the end of this year from an estimated $570 at the end of 2007, says Paul, citing the aggressive efforts by paper mills to throttle back production in response to flagging demand in the last few years from newspapers and other legacy print publishers.

As you can see from the chart below, newsprint was uncharacteristically cheap last year, because the mills couldn’t reduce production fast enough to keep pace with constricting publisher demand. The law of supply and demand, which benefited newspapers last year, will assert itself with a fresh vengeance in 2008, because the mills, which now have scaled back their capacity, are poised to start ratcheting up prices on the limited amount of product available to the market.

“We expect newsprint to rise sharply in the first half of 2008, continue to rise – though more slowly in the back half of the year – and then start to plateau into 2009 as more [idled paper-making] machines come back online due to the higher price,” says Paul.

Newsprint historically has represented about 20% of a newspaper’s operating expenses, so a hefty increase in this fundamental commodity will further decay margins already challenged by declining sales and other rising operating costs. As discussed here, newsprint and headcount are two of the comparatively flexible expense items that publishers can crunch in times, like these, when profits are constrained.

Even crediting publishers with some ability to further reduce their print consumption, Paul believes the looming spike in paper prices will play havoc with the earnings of the publicly traded companies he covers.

Consequently, he is dropping his estimate of the 2008 per-share earnings of McClatchy by -11.2% to $1.27, Media General by -9% to $1.62, New York Times Co. by -6.3% to $1.34, Gannett by -4% to $4.35, Lee Enterprises by -4% to $1.43, Belo by -3.4% to $1.12, Scripps by -1.5% to $2.57 and Washington Post Co. by -0.9% to $36.24.

Soaring newsprint prices are only one of the many factors that will pressure profits for newspapers this year. With nearly 11½ months to go, we are sure to pass this way again.

‘Who’s Mike Royko?’

One of the simple pleasures of blogging is getting called from time to time by journalism students who are looking for a couple of quick quotes for a term paper.

I am happy to oblige, because no one else wants to listen to my stories about the olden, golden days of the newspaper business. While the students may not be universally thrilled by what I have to say, I find it fascinating to learn what’s on their minds.

In talking today with a pleasant fellow who is halfway through earning his master’s degree in journalism at the prestigious Columbia University, I happened to mention the name of Mike Royko, one of the top journalists of the 20th Century.

And this is how the conversation went:

“Sorry,” said the student, whose journalism education will cost more than $43,000 a year in tuition and fees (plus an estimated $24,000 in living expenses). “What was the name of that reporter again?”

“Mike Royko,” I said.

“Mike who?”

“Royko."

"Can you spell it?"

"R-O-Y-K-O.”

“Never heard of him.”

“What exactly are they teaching you at Columbia?”

“Not the history of journalism.”

So, what are they teaching?

Follow-up: Fair being fair, here's a geezer quiz

“Do I expect a 20-year-old (or a 25-year-old) today to know Royko’s work?” asks Mindy McAdams, a journalism educator who writes the blog Teaching Online Journalism. “No. Why should she?”

“Let’s turn the tables,” continues Mindy, “and ask if the green-eyeshade types know these people’s work.” See Mindy’s quiz here. (Newsosaur, who never had a green eyeshade but always wanted one, barely got a passing grade.)

Other reactions are at Meranda Writes, Steve Yelvington, Journerdism.Com, Notes from a Teacher, Committee of Concerned Journalists, John Robinson's blog and the Comments below.

Back to the chopping block

For all the cost-cutting at newspapers in 2007, the trauma may continue in 2008 as the industry faces a potential drop of some $3 billion in print advertising sales for the second year in a row.

With economic harbingers pointing to recession-like conditions in 2008, many publishers are urgently recalibrating their budgets to reflect the growing concern that sales will decline more steeply this year than many of them had predicted as recently as the fall.

“Things are going further south than anyone anticipated,” said one glum publishing executive, echoing the thoughts of many others. “We weren’t optimistic to begin with. But, compared to where things are, it looks like we were too optimistic.”

A sales decline this year would come on top of the near-record ad slump that apparently took place in 2007 despite a comparatively robust economy. Based on the 8.6% sales decline reported in the first nine months of 2007, it is likely (as detailed here) that print advertising for all of 2007 will total $42.7 billion, give or take. The projected full-year drop would rival the all-time record sales decline of 8.9% in the aftermath of the terror attacks in 2001.

While the definitive reckoning of last year’s carnage won’t be available until publishers close their books for 2007, industry analyst Peter Alpert at Goldman Sachs projects that sales could fall as much as another 7.9% in 2008. If Peter is right, and fears are growing that he may be, then the publishers who thought they were being sufficiently cautious in forecasting a 5% revenue decline in 2008 would need to trim even more expenses than originally planned to achieve their profit targets.

How much would expenses have to be cut? Here’s the unpleasant math:

Assuming all other things were equal from last year to this, publishers seeking to make up for a 5% shortfall in print ad sales in 2008 would have to cut $2.1 billion worth of headcount, newsprint and other expenses to hold the line. If publishers needed to make up for Peter’s projected 7.9% drop in revenues, they would have to trim another $1.2 billion in spending, for a total of nearly $3.4 billion in budget cuts in 2008.

Any cuts this year would come on top of the more than $3.7 billion in reductions that publishers would have had to make in 2007 to sustain their margins. To put this in perspective, $3.7 billion is equivalent to the annual pay and benefits of approximately 15% of the employees of an industry whose payroll totaled 375,600 individuals in 2004, the most recent year employment statistics are available. (Without doubt, employment rolls have fallen to 350,000 since then.)

But all things will not be equal from last year to this one. A wide range of operating expenses – from rent to health insurance – will continue to increase in 2008. Publishers struggling to sustain their profitability will have to cut such elastic and discretionary expenses as newsroom payroll, marketing and newshole to ensure that they have the money they need to cover such unavoidable and unmanageable costs as fuel for their delivery fleets.

Speaking of unmanageable costs, several publishers this year will be forced to pay higher interest payments on the bonds they sold to finance their businesses. That’s because declining sales and profitability have caused the ratings on their bonds to be lowered by the independent agencies that judge their likely capacity to repay the debt.

The Tribune Co. owes annual interest payments of nearly $1 billion on the debt it shouldered to go private. If it fails to sustain the level of profitability it promised its lenders, the company could face even higher interest than the 9%-ish rates it pays today. Because McClatchy’s $1 billion in debt was downgraded last week, it will owe an additional $2.5 million in interest charges this year, or enough to cover the annual salaries of some three dozen journalists. Tribune and McClatchy are not alone.

If profits fell out of bed entirely for a publishing company, the consequences would be more dire than just higher interest payments. The company could face default. And a default in the case of Tribune could wipe out the value of the freshly minted stock its employees acquired a few weeks ago when Sam Zell helped them become part-owners of their company.

It is true that publishers will see some benefit this year from the likely increase most will experience in new media sales. But even a healthy 25% increase in online ad revenues – which last year was beyond the capability of a company like McClatchy – would produce only $800 million in fresh revenue for an industry that, on average, still derives more than 90% of its sales from print advertising. In any event, an $800 million uptick in online revenue would not be enough to offset even 25% of a $3.4 billion drop in print sales.

If the economy – or merely the newspaper industry – falters even more than people like Peter Alpert expect, then publishers will be forced to accept lower profits or implement steeper cuts than discussed above. A third, and perhaps most likely, alternative would be a combination of deeper cuts and lower profits.

Weaker profits are not a particularly desirable option, because they would lead to another beating for the publicly traded companies on Wall Street. The newspaper stocks, which shed $23 billion in value between 2005 and 2007, were hammered again in the first days of this year, driving them to 52-week lows.

With newspaper executives no wrestling for the third consecutive year with an unprecedented sales meltdown aggravated by an evidently decelerating economy, you can bet they will be considering aggressive new ways to cut costs that seldom, if ever, have been explored before.

Everything is going to be on the table. Or, more precisely, on the chopping block.

State of play

Staff cuts at the sheriff’s department and debate over a new toilet tax made the front page this morning at the Opelousas (LA) Daily World, but there was no mention of the New Hampshire primary.

The stories were different but the situation was the same at papers like the Dodge City (KS) Daily Globe, the Waynesboro (VA) News-Virginian, the Pierre (SD) Daily Journal, the Santa Clarita Valley (CA) Signal and the Pascagoula (MS) Press, each of which also carried no front-page mentions of the dramatic presidential primary.

While the cold-turkey approach to primary coverage was an exception in the industry, the wide range in which newspapers treated the story illustrates the struggle editors are having with finding their rightful place in the evolving media food chain.

Do you cover the election as though the reader presumably had no access to television, radio and the Internet? Do you assume readers got the news someplace else, skip the story and move on to other things? Or, do you do something in between?

While most newspapers followed tradition by giving their top page-one position to the election – many playing off the “comeback” angle – several publications subordinated the story to the middle or bottom of their covers. Some papers resorted to graphics referring readers to stories inside the paper – and the Gainesville (GA) Times summarized the outcome in a box score.

In general, big-city papers made more of the New Hampshire primary than papers serving medium and small markets. The papers that didn’t put the election on page one tend to serve small, relatively isolated markets where they obviously consider their mission to be the top source of local news (as discussed in the Comment below from the Dodge City Globe). In some cases, like that of the Christian Science Monitor, inflexible production windows made election coverage impossible.

While you can understand the decision of local publishers to minimize or forgo coverage of an event most readers saw on TV or the Internet, it is harder to explain why most metros – who have greater resources and electronic competition than papers in smaller markets – could not come up with more creative ways to cover and package a story whose outcome was widely known before they went to press.

The San Francisco Chronicle got a bit out of the box by teaming together three coincidental events – the primary, the mayor’s inauguration and the governor’s state of the state address – under a single banner saying, “What’s Next.” And the Boston Herald, reflecting on the poor showing of former Massachusetts governor Mitt Romney, asked in fat, red letters, “Is It Over?”

In fairness, some advance preparations may have been scuttled because the New Hampshire vote didn’t pan out the way most pollsters and pundits expected. And papers were squeezed – especially in the East – by the length of time it took to confim the Democratic vote after the early results did not conform to expectations.

While I fully recognize these problems, most readers (and non-readers) won’t understand why their morning newspaper is printing essentially yesterday’s warmed-over news.

Given that nearly 11 long months of political coverage lie ahead, editors need to start getting under, behind and ahead of the story, so their product remains relevant to the busy audience they covet.

Common un-wisdom, redux

Hillary Clinton’s surprise victory in the New Hampshire primary proves that the job of political reporting will be even more treacherous this year than discussed in this prior post.

Succumbing to the collective wisdom of the surveys and the pundits that prevailed less than 48 hours ago, I, like just about everyone else, bought into the idea that Hillary was going down to her second defeat after Iowa. I, like just about everyone else, was wrong.

With the results of the first two primaries dramatically defying the prognostications of the pollsters and the press, the media now have one of two things on their hands: A potential crisis of credibility or a cracking good, nail-biter of a story.

If everyone, including me, goes easy on the predictions and heavy on solid reporting, this election could turn out to be a tonic for the media business.

Common un-wisdom

As we approach the 60th anniversary of the immortal Chicago Tribune headline screaming “Dewey Defeats Truman,” pundits and pollsters still have a tin ear for the sentiment of the American electorate.

While it is amusing to see modern voters defying the expectations of the quants in the same way they led Gallup and the Tribune to believe Thomas E. Dewey was headed for the White House in 1948, the reliance today on misbegotten surveys and stale Beltway “wisdom” has led to a crisis in political coverage that has produced a prodigious number of off-pitch stories in the early stages of the 2008 campaign.

With all the other challenges (declining audience, sales and profits) pummeling the media, a catastrophic collapse of credibility is the last thing they need. But that’s what they have.

Notwithstanding the wretched excess of thousands of me-too correspondents in Iowa, New Hampshire and other bellwether locales, most of the media missed the story that Americans are fed up with the increasingly toxic atmosphere that has characterized the national government since Lyndon Johnson left the White House. Instead of working collaboratively to solve the pressing problems of the day as they had in more genteel times, the leaders of both political parties over the years have come to regard their essential duty as spoiling the efforts of the other side.

Though it has taken a long time for the American people to reject this form of Spy vs. Spy politics, the Iowa vote and the early soundings from New Hampshire suggest that they now may be doing so. If you reduce the messages of Barack Obama and Mike Huckabee to a common denominator, each won in the caucuses by promising to end the long, dark, unproductive era of cross-party warfare.

But this sea change in American political sentiment, if it indeed is sustained, was lost for the most part on the media, as journalists focused on the money raised, endorsements collected, consultants hired, organizations fielded and polling fibrilations experienced by the candidates who were playing the game according to the customary rules of engagement. Until a week or two ago, so far as the media mob knew, Hillary Clinton and Mitt Romney were the leaders, because they were succeeding by all the conventional indicators.

While today’s coverage is all-Obama all the time as the media feverishly attempt to rewrite since Iowa the history they botched on the first draft, it is instructive to note, thanks to Pollster.Com, that some surveys even days before the caucus still had Hillary in the lead. In fairness, most polls did pick up the Mike Huckabee surge and the Des Moines Register got both races right.

If the media had disregarded the polls and the common “wisdom” to do a better job of original, primary reporting, they would have discovered that Americans disdain the dirty way that business typically is conducted in Washington.

Accordingly, journalists would have questioned the polling data and other assumptions that suggested a majority of Americans would opt for Hillary Clinton, one of the principal protagonists in the long-running food fight, because a vote for Hillary essentially would be a vote for four (or eight) more years of un-statesmanlike conduct on both sides of the aisle. (Hillary may be the better Clinton to be president, but timing is everything and this isn't her time.)

Somehow, almost all the election coverage to date missed the profond – and, in retrospect, glaringly obvious – shift in the attitude of the electorate. If the press aims to regain its relevance, reporters need to stop obsessing over the polls, communing with self-interested political operatives, chasing Drudge, CNN and the wires, and, above all else, interviewing each other.

The story is not on the campaign bus or in the press room. It's out there with the real people. It's time to go get it.

Many barbarians, few gatekeepers

One of the last of the great gatekeepers of the news died this week and the tragedy is not merely in his passing but also that we almost certainly will not see his like again.

Daniel T. Sullivan, who died at 88 on Wednesday, was the chief of the copy desk of the Chicago Daily News, when I, fresh out of college, was put in his care as a rookie copy editor in 1970.

He went on, as he noted in a “hold for release” obit he wrote himself several years ago, to become one of the earliest internationally recognized experts on Atex, a first-generation – but not always ready for prime time – computerized editing system.

For all his subsequent achievements, I remember Sully best as the steadfast guardian of the accuracy and credibility of the Daily News, where he sat quietly in the chaos of the clattering newsroom, reading every word of every line of every story headed for the next edition.

After reporters wrote, the city desk tweaked and copy editors tinkered with the stories, Sully, occupying the slot at the center of the horseshoe-shaped copy desk, almost always was the one who spotted the crucial error of fact, grammar or style that the rest of us missed.

The breadth of Sully’s knowledge and the depth of his attention to detail were best illustrated not in a heroic save on a big, breaking story – though there were many of those – but, rather, in an incident that occurred after the last deadline on a quiet afternoon, when we were moving some copy for the features department.

“Isn’t there too much curry powder in this?” Sully asked an astonished colleague on the rim, who had just finished editing a recipe for an exotic feast. As usual, Sully was right.

In these days of instant media gratification, when stories, pictures and videos can be posted to the web with abundant speed, minimal forethought and zero formal review, there’s not even the concept of a slot, much less someone like Sully to fill it.

Even all but the most lavishly funded media companies are looking for ways to reduce the number of people required to process copy as it races from the fingertips of the creator to the printing press or a PDA.

Greater information access and improved media efficiency are coming at a considerable cost: An increasing flow of inaccurate and misleading information that propagates itself, quite literally, at the speed of light.

Just this week, I am embarrassed to report, I contributed to the misinformation myself. I said the media were squandering their limited resources by sending one reporter for every 10 people expected to vote in the Iowa caucuses. In fact, I screwed up the math by a factor of 10. It actually is one reporter for every 100 attendees.

Before one careful reader alerted me to the now-corrected error, the item began popping up elsewhere on the web. Now, I am trying to find any such links so I can get them fixed.

My bone-headed stumble never would have gotten past Sully. With giants like him departing our midst, who in the future will protect us from ourselves?

Hop off the bus, Gus

With one journalist traipsing around Iowa for every 100 expected caucus-goers, you have to ask yourself, “Don’t most of the these reporters have something better to do?” Indeed, they do.

While I am as interested as anyone in whether Barack Ob-literates Hillary or Huck Romps Romney, I can’t see the point of concentrating more than 2,500 representatives of our resource-constrained news organizations on this one-night wonder of a set-piece story.

The number of journalists issued credentials this year is “almost twice the 1,400 that were authorized in 2004,” reports the New York Times. CNN alone has 50 folks in the state, not to mention scores of reinforcements in New York and Atlanta.

With some 250,000 of the 2.9 million Iowans expected to attend the caucuses, the ratio of news-gatherers to civilians would be 100 to one – or lower, given that the number of correspondents applying for credentials was continuing to climb on the eve of the event, according to spokesmen for both political parties.

The slim journalist-to-Hawkeye ratio compares with the national averages of one sworn peace officer for every 123.5 citizens and one Starbuck’s employee for every 1,750.8 under-caffeinated Americans.

With caucus coverage being handled quite amply by the national print and broadcast media, I think the wannabe Boys on the Bus who have invaded Iowa ought to head home as fast as they can to start digging up the unique stories of local consequence that best serve their communities and the commercial interests of the news outlets that employ them.

Newspapers and local broadcasters are under increasing competition from Google, Yahoo and other online aggregators, who are usurping their audiences and their revenues with commoditized content like, well, coverage of the Iowa primary.

To fight back, the struggling local media need to do as much as they can to differentiate their offerings from the Yahoogles of the world. This means investing in the down-home coverage that defines their unique and unimpeachable value to advertisers, readers and, most important, non-readers.

Now more than ever, the local media can’t afford to squander their shrinking resources on ego trips to Iowa to claim a “Staff Correspondent” wrote essentially the same story that came off the AP wire.

The days of me-too journalism are over.

$23B zapped in news stock value

The market value of the American newspaper publishers entering 2008 as independent, publicly traded companies has fallen by $23 billion, or 42%, since the end 2004, the year before the wheels started coming off the industry.

Nearly half the slide in the market capitalization of newspaper stocks came in 2007, when the shares lost a collective $11 billion, or 26%, of their value. Thus, newspapers lost nearly as much value last year as they did in the two prior years put together.

The vaporized value of newspaper shares in 2007 exceeded the combined $10 billion market caps of Gannett and McClatchy, the nation’s two largest publicly held publishers by circulation. And the $23 billion drop in shareholder value since yearend 2004 equals the current total value of all the common stock of Belo, Gannett, Lee Enterprises, Media General, McClatchy, the New York Times Co. and the Washington Post Co.

The biggest losers in the three-year period were Journal Register Co., whose shares fell 91% to close 2007 at a mere $68.9 million in value; Sun-Times Media Group, which slid 86% to a market cap of $176.7 million, and McClatchy, which fell 82% to a value of $1.03 billion. Details for the balance of the group are in the table below.

The declines compare with respective increases in the last three years of 17% and 15.6% in the Standard and Poor’s average of 500 stocks and the Dow Jones average of 30 industrials.

The market values of only two American publishers have risen since 2004, the last year before advertising sales began crumpling after decades of delectably predictable growth.

One winner was the Washington Post Co., whose shares gained 4% in value in the last three years, thanks to aggressive diversification out of the newspaper business and into such lucrative endeavors as its Kaplan test-prep schools.

But the big winner, by far, was Dow Jones, which climbed 65% in value as the result of the sumptuous price News Corp. paid to buy it from the dysfunctional Bancroft clan.

News Corp. itself realized a 10% gain in value since 2004 but is not included in the averages for American newspapers, because the diversified global media company published only one U.S. newspaper, the New York Post, prior to the DJ acquisition. (Speaking of the Post, don't miss this banner story on the people who wear diapers to compensate for the lack of port-a-potties at the New Year's celebration at Times Square.)

The value of Tribune Co.'s shares over the three years remained negative despite the acquisition that took it private in the waning days of 2007. Sam Zell and his fellow employee-owners bought the company for 15% less than the value of the stock at yearend 2004.

Wall Street’s vigorous repudiation of newspaper stocks reflects a deep, and arguably growing, concern that publishers don’t know how to arrest three years of mounting declines in audience, sales and profitability. Even the industry’s promised efforts to improve new media sales are failing to keep pace with online competitors, as discussed here and here.

The accelerated erosion of newspaper shares since the collapse of the easy-credit markets in 2007 appears to reflect waning hopes on the part of investors that a fresh crop of daring souls like Rupert Murdoch or Sam Zell will arrive to bid up the stocks of the sagging public companies so they can take them private and try to fix them.

With neither improved business prospects nor white knights likely to be on the horizon, you can’t blame newspaper executives for cringing as they turn a new page on the calendar. Unless they come up with a lot of creative and profitable ideas in a hurry, many of them may not be around to ring in 2009.