President-elect Donald Trump has called attention to the financial troubles of a prominent newspaper in the repeated phrase: the "failing New York Times."
It's more of a backlash against the paper for their unfavorable coverage of Trump than a financial report. Nonetheless, there is some truth to Trump's remark, which really applies to all or most newspapers (The Elliott Wave Financial Forecast, November 2016):
Spending on print advertising has been trending lower since 2007, but the decline is now accelerating. "Print advertising revenue has taken a sudden tumble, the worst pullback since the Great Recession." Gannett's 14.8% year-over year decline is on par with other major news outlets. That was led by a 35.1% drop in national print advertising. On Nov. 2, The NY Times reported a 95.7% fall in quarterly profit. At this point, even The Wall Street Journal is cutting back. … In an October 19 memo to employees, the Journal's editor said, "Every story should be as short as it needs to be."
That's deflation in black and white.
The third quarter was not an isolated rough patch for The New York Times. The company lost about $500,000 in Q2 vs. a net income of $16 million in Q2 of 2015.
The decline in print newspaper advertising spending is global. This is from the Wall Street Journal (Oct. 20, 2016):
Global spending on newspaper print ads is expected to decline 8.7% to $52.6 billion in 2016. That would be the biggest drop since the recession, when world-wide spending plummeted 13.7% in 2009.
Besides The New York Times and Wall Street Journal, the U.K.'s Guardian and Daily Mail have been cutting back on workers.
These headlines provide you with an even fuller flavor of deflation's toll on the newspaper industry:
- Trinity Mirror Sees Sales Decline as Print Ad Revenue Plummets (Bloomberg, Sept. 30, 2016)
- Independent News & Media sees ‘accelerated decline' in print advertising revenue (Irish Times, June 2, 2016)
- UK newspapers lose £155m in print advertising (Guardian, April 26, 2016)
- Print Is Dying, Digital Is No Savior … (WGBH News, Jan. 26, 2016)
- USA Today Offers Buyouts … To Slash Costs (Huffington Post, March 19, 2015)
These are just a small sample of such headlines.
Magazines have also taken a financial hit. Worldwide, they expect to see a 2.9% drop in ad spending in 2016.
Companies hope that digital revenues will make up for the print shortfalls.
In the meantime, more employee cutbacks are expected.
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