The Press: The High Cost of Publishing

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In Atlantic City, N.J. last week, Richard W. Slocum, executive vice president of the Philadelphia Bulletin and president of the American Newspaper Publishers Association, stepped up before 1,000 newspaper production men and said sternly: "The day of easy money [for newspapers] is gone . . . Some newspapers have shrunk, and more have died than we like to talk about. More will shrink and die if we do not meet our present-day problems." Publisher Slocum was gloomy about the newspaper business with reason. All over the U.S., rising costs have squeezed profit margins of newspaper publishers to the lowest point in years.

Even though circulation, ad revenue and total income last year were at an alltime high, costs have shot up still faster. Two biggest cost factors: 1) newsprint, which accounts for about 15% of the total costs for smaller papers and as much as 55% for big dailies, has risen from $50 a ton before World War II to $126 a ton this year; 2) labor costs, especially for mechanical workers, have gone up as much as 140% in the same period. The average daily, says Editor & Publisher, "has not gone through a year [since 1946] when expenses have not risen at a higher percentage rate than revenues."

Consolidation. As a result, the era when newspapers produced some of America's great fortunes (e.g., Hearst, E. W. Scripps, Pulitzer, et al.) is past. Publishers who like to consider themselves primarily "editorial men" find themselves spending more and more time on business affairs. Even such dailies as the wealthy, institutionalized New York Times, which has about 4,700 employees on its payroll, have been hard hit. Last year's ten-day newspaper strike (TIME, Dec. 7 et seq.) says Times Publisher Arthur Hays Sulzberger, wiped out "virtually all, and I mean that literally, of the anticipated profit from 1953 operations." The Times has also been forced to pare down its voluminous news space, e.g., it recently cut its foreign news 10%.

One of the few U.S. newspaper companies that publicly report their profits, the Boston Herald-Traveler Corp. has seen its profits fall off from $1,270,813 in 1946 to $526,283 last year. In cities where there are monopolies, the papers are doing better. Greensboro, N.C.'s Jefferson Standard Life Insurance Co., which helps finance 23 papers all over the U.S., reports that the profit margin of its papers in competitive cities has slipped to less than 5%, while in monopoly cities it is nearly 18%.

High costs have already taken their toll. Last year 22 dailies were suspended or merged, leaving 82% of all U.S. towns and cities that have newspapers with only one daily (v. about 40% in 1900). The Washington Times-Herald recently found rising costs too much to bear, sold out to Eugene Meyer and Philip Graham of the Washington Post. High costs have also made starting a big, new daily virtually impossible without millions in reserve capital.