Money lust: how pressure for profit is perverting journalism

Citation metadata

Author: Neil Hickey
Date: July 1, 1998
From: Columbia Journalism Review(Vol. 37, Issue 2.)
Publisher: Columbia University, Graduate School of Journalism
Document Type: Cover story
Length: 7,241 words
Abstract :

The media has turned to sensationalism to maximize reader or viewership, minimize expense and offset a shrinking news hole. Publishers and broadcasters are interested in the financial bottom line and turning a larger profit and their purse strings are dictating the quality of news coverage at the expense of journalistic values.

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The media has turned to sensationalism to maximize reader or viewership, minimize expense and offset a shrinking news hole. Publishers and broadcasters are interested in the financial bottom line and turning a larger profit and their purse strings are dictating the quality of news coverage at the expense of journalistic values.

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Some random testimony from the far-flung precincts of journalism:

* "If a story needs a real investment of time and money, we don't do it anymore." The speaker is a forty-something reporter on a mid-sized Illinois daily. "In assignment meetings, we dream up `talker' stories, stuff that will attract attention and get us talked about, tidbits for busy folks who clip items from the paper and stick them on the fridge." He adds ruefully: "Who the hell cares about corruption in city government, anyway, much less dying Bosnians?"

* A prominent network television newsman complains: "Instead of racing out of the newsroom with a camera crew when an important story breaks, we're more likely now to stay at our desks and work the phones, rewrite the wire copy, hire a local crew and a free-lance producer to get pictures at the scene, then dig out some file footage, maps, or still photos for the anchor to talk in front of, or maybe buy some coverage from a video news service like Reuters, AP, or World Television News. If we had our own correspondent and camera covering the story, we'd damned sure get something nobody else had, and be proud of it. But everything now is dollars and cents. When you're worried about how much it's going to cost, and you have to justify your decisions to your bosses, people are less willing to take risks. The journalism that gets on our air just isn't good enough, and it's a damned shame."

* A radio news director laments that his big-city station is cutting its news staff to the bone, virtually eliminating local news, and grabbing national news from a satellite-delivered network feed. "That immediately shows a big gain in cash flow, so the owner can sell the station for a huge profit to one of the big chains, whose owners care nothing about public service to this community. One more journalistic voice is being killed off in the pursuit of profits. It's very sad."

* The editor of a profitable national magazine who's been ordered to reduce his budget 10 percent a year says: "OK, the first year I'll cut stuff I probably should have cut earlier anyway. Next year I'll have to reduce the number of editorial pages in every issue. In the third year, for damned sure, it's got to be people that will have to go: editors, writers, fact-checkers, art department staff. Then I'll hit a wall. Sooner or later I will have so cheapened the product that it will just go out of business. That's simple arithmetic."

A new era has dawned in American journalism. A New York Times editor describes its hallmark: "A massively increased sensitivity to all things financial." As competition grows ever more ferocious; as the audience continues to drift away from traditional news sources, both print and television; as the public's confidence in news organizations and news people continues to decline; as mainstream print and TV news outlets purvey more "life-style" stories, trivia, scandal, celebrity gossip, sensational crime, sex in high places, and tabloidism at the expense of serious news in a cynical effort to maximize readership and viewership; as editors collude ever more willingly with marketers, promotion "experts," and advertisers, thus ceding a portion of their sacred editorial trust; as editors shrink from tough coverage of major advertisers lest they jeopardize ad revenue; as news holes grow smaller in column inches to cosmeticize the bottom line; as news executives cut muscle and sinew from budgets to satisfy their corporate overseers' demands for higher profit margins each year; as top managers fail to reinvest profits in staff training, investigative reports, salaries, plant, and equipment -- then the broadly-felt consequence of those factors and many others, collectively, is a diminished and deracinated journalism of a sort that hasn't been seen in this country until now and which, if it persists, will be a fatal erosion of the ancient bond between journalists and the public.

"It's the biggest story in American journalism," says Ray Cave, former managing editor of Time. Regrettably, it's also the least reported story in American journalism.

Sandra Mims Rowe, editor of The Oregonian of Portland and former president of the American Society of Newspaper Editors, told the ASNE convention in April that reporters "wonder whether their editors have sold out journalistic values for business ones. They long for the inspiration provided by leaders with abiding passion for the gritty world of journalism." She added that in some companies, "the talk has shifted to financial and marketing imperatives to such an extent that journalists have concluded their owners are blindly driven by Wall Street, and unconcerned about the quality of journalism."

In March, Los Angeles Times media reporter David Shaw wrote that while newspaper readership has been on the skids for more than thirty years and competition from cable TV news, the Internet, and magazines is on the rise, "stockholders and stock analysts have been demanding newspaper profit margins equal to -- and in some cases greater than -- those generated in earlier, less turbulent times."

Television's corporate chieftains, says Walter Cronkite, show little understanding of "the responsibilities of being news disseminators." They expect the news departments to generate the same sort of profits that entertainment programs do -- an impossible task. The newspaper business isn't much different, he says. "Stockholders in publicly held newspaper chains are expecting returns similar to those they'd get by investing in industrial enterprises."

The "tabloidization" of TV newsmagazines is strictly geared to ratings and profits. "A major tragedy of the moment," Cronkite maintains, is the use TV newsmagazines are making of the valuable prime time they occupy. "Instead of offering tough documentaries and background on the issues that so deeply affect all of us, they're turning those programs into television copies of Photoplay magazine." News executives know better, Cronkite says, and are "uncomfortable" with what they're doing. "But they are helpless when top management demands an increase in ratings to protect profits."

News chiefs themselves perceive that the press is perilously compromising quality in pursuit of gain. Nearly half the nation's editorial and business-side executives surveyed in a January Editor & Publisher poll think press coverage in general is shallow and inadequate, and fully two-thirds say newspapers concentrate more on personalities than important issues. J. Stewart Bryan III, c.e.o, of Media General, Inc., and publisher of the Richmond Times-Dispatch, told E&P that serious news is being sacrificed to profits as papers reduce news holes and produce softer stories. Said he: "I don't think we can put the bottom line ahead of our commitment to quality."

Journalistic values haven't completely disappeared, says Kurt Andersen, columnist for The New Yorker and former editor of New York magazine. "But they've been significantly subordinated to the general ascendancy of market factors, especially the maximizing of short-term profit." Magazine editors, he points out, "are much more explicitly responsible for business success than in the past. I'm not saying it's black and white; some of that has always been there. It was light gray, now it's dark gray."

Even Brenda Starr, the comic strip reporter, has gotten into the act. She lamented: "Sometimes I think newspapers care more about profits than they do about people."

After scores of wide-ranging interviews conducted over several months with editors, reporters, publishers, media analysts, academics, and labor officials, CJR concludes that -- more so than at any other moment in journalism's history -- the news product that lands on newsstands, doorsteps, and television screens is indeed hurt by a heightened, unseemly lust at many companies for ever greater profits. In the service of that ambition, many editors are surrendering part of their birthright to marketers and advertising directors, and making news judgments based on criteria that would have been anathema only a few years ago.

But haven't media barons always wanted to prosper, like any other businessmen? Winston Churchill, an unrepentant Tory, once said: "It is a socialist idea that making profits is a vice; I consider the real vice is making losses." Journalism isn't philanthropy -- no profits, no press. Some recent tendencies, however, alter the landscape:

* More Americans than ever are shareholders in public companies of all kinds and corporate executives, including those at media corporations, are sensitive to the vastly expanded interests of those investors.

* Top managers in media own ever larger piles of stock options -- often a heftier source of income than their salaries -- and thus have a direct, personal interest in their companies' profit picture. Higher profits mean a higher stock price and a bigger payoff when they cash in their holdings. Says a TV producer: "The more they can squeeze out of their people, the richer they'll be in the end."

* In an age of rampant consolidations and mergers, clamping down on operating costs and budgets -- no matter the effect on news coverage -- can fatten the bottom line and make a company a more attractive takeover target, with the consequent heavy windfall to major shareholders.

* Bonuses tied to profits tempt both editorial and business-side executives to trim costs, often to the detriment of news processing.

At the University of Iowa, three professors -- John Soloski, Gil Cranberg, and Randy Bezanson -- are embarked on an eighteen-month project (funded by philanthropist George Soros's Open Society Institute) studying how ownership structures of newspapers are affecting journalistic function; and examining journalists' complaints that their interests and readers' interests are being sacrificed for the interests of shareholders. "Publicly traded media companies are in a vicious circle they can't break out of," says Soloski, director of the university's journalism school. A huge percentage of their stock is owned by institutions -- mutual funds, retirement funds, insurance companies -- which care little about the quality of the journalism of the companies they invest in. "Those financial institutions are graded weekly, monthly, quarterly on their own performance. So they pass that pressure along -- and it's a lot -- to those media companies." They in turn pressure their editors and publishers to raise their stock price by whatever means necessary. The land rush to go public in the 1980s and 1990s has had its residual effect: investors and analysts demand the kind of profits that often can be attained by mid-level papers, but are tougher for big-city dailies.

In 1990, when Geneva Overholser, editor of The Des Moines Register, was named Gannett's "editor of the year," she offered these thoughts in her acceptance speech:

... As we sweat out the end of the ever-increasing quarterly earnings, as we necessarily attend to the needs and wishes of our shareholders and our advertisers, are we worrying enough about ... our employees, our readers, and our communities?

I'll answer that: no way .... We fret over declining readership and then cut our news holes .... We fret over a decline in service to our customers, and then pay reporters ... wages that school districts would be ashamed of .... [O]ur communities are crying out for solutions, and newspapers can help -- newspapers that are adequately staffed, with adequate news holes. But not newspapers where underpaid people work too hard, and ad stacks squeeze out editorial copy ....

Too often by far, being an editor in America today feels like holding up an avalanche of pressure to do away with this piece of excellence, that piece of quality, so as to squeeze out just a little bit more money.

Other signs of the profit-pressure syndrome were apparent three years ago when a dramatic series of shutdowns, layoffs, strikes, and the emotional departures of top editors afflicted the newspaper industry. The Times Mirror Company killed the Baltimore Evening Sun and New York Newsday. Knight Ridder Inc. slashed 300 full-time jobs at The Miami Herald and won major labor concessions in return for keeping the Philadelphia Daily News going.

Some of the biggest editors in the business have quit rather than make budget cuts that they felt would devastate editorial. As editor-in-chief of Reader's Digest, Ken Tomlinson grew weary of repeated demands to chop editorial costs up to 10 percent annually, year after year. In late 1995, management ordered a company-wide reduction of roughly 25 percent, largely by inducing many edit people to retire. Tomlinson didn't want to be remembered as the editor who carried out this action. So he told c.e.o. Jim Schadt, "I've found a way for you to take a giant step toward your goal. Eliminate my salary." And so Tomlinson retired at 52. (He now raises racehorses in rural Virginia; Schadt's strategy failed to ease the Digest's continuing problems and he later resigned under pressure.)

That same year, James M. Naughton resigned as executive editor of The Philadelphia Inquirer. Among his reasons: "unrelenting pressures" on the newsroom. (And talk about pressure: half the respondents in an AP managing editors poll call their jobs "highly stressful." Their median workweek: fifty-two hours.) Last year, Maxwell King said upon resigning as the Inquirer's editor: "When I look at big newspaper companies across the board, the question that occurs to me is, `Are they all too intent on taking profit now and not intent enough on investing in content for the future?'" The paper was under orders from Knight Ridder to ratchet up its profit margin from 8 percent in 1995 to 15 percent last year.

The L.A. Times's David Shaw put the problem succinctly:

Today, many newspaper owners insist on high quarterly dividends ... thus depriving the papers of money that could be invested in improving quality; there is little question that the shift from individual and family ownership to public ownership has increased the demand for higher short-term profits. In order to make their stock attractive to investors, newspaper companies promise higher profits every year (if not every quarter). That sets up unrealistic expectations...

When revenues inevitably decline, even temporarily -- because of recession, higher newsprint costs or other factors -- most publicly held newspapers feel they must still increase profits. So they cut costs -- and, ultimately, quality.

Money is one big reason that newsrooms at America's papers have an older and less satisfied workforce than ever before -- more graying heads and reading glasses than fresh faces. Forty-four percent are 40 or over, says an ASNE survey. Between 1988 and 1996, the percentage of journalists 30 and under dipped from 29 percent to 20 percent. More journalists than ever are planning to quit the business before retirement age. The most oft-cited reason: money. (Average base pay at papers having 30,000-75,000 circulation: $23,000) But "working conditions" and "stress" are now a close second and third. The number of journalists rating their papers as "excellent" has dropped dramatically, and most think that newspapers will be "a less important part of American life" in ten years time. Over half of ASNE's sample said their newsroom budget had declined in the previous five years, and 71 percent called it inadequate.

Meanwhile, the revolutionary Telecommunications Act of 1996 set the stage for huge, disruptive changes in broadcasting. Its deregulatory effects and the resultant seismic shift to corporate gigantism has been at the public's expense, especially in the way the nation's information needs are met.

One example: the act removed all limitations on the number of radio stations any one company can own nationally and greatly increased the number a single entity can operate in any single city. That triggered an unprecedented wave of buyouts and consolidations in the radio industry (with 16,000 stations nationwide), which have left listeners with a less-than-nourishing news diet in many places. (CBS, the biggest owner of radio stations, has 155 in its stable.) At many stations, including CBS's flagship in New York, all-news WCBS-AM, anchorpersons and sports reporters routinely read commercials as part of their duties, an activity that seriously blurs the line between journalist and huckster. But it saves stations the cost of hiring an announcer to intone that advertising copy. And with fewer street reporters, writers, and editors than in past years, many stations are reduced to parroting news from the morning's papers.

Local radio and TV news in many cities have indeed suffered "crippling cutbacks as group owners trim staffs to enhance their bottom lines." says Louis C. Adler, former WCBS news chief, now a professor at Connecticut's Quinnipiac College. The agglomerating of radio stations in pursuit of economies of scale by rich corporations has left listeners in many communities with diminished service. In Connecticut, for example, three New Haven stations -- WELI, WAVZ, and WKCI -- now belong to Texas-based Clear Channels Communications. A second Texas company, SFX Broadcasting, is grabbing WPLR, WTNH-TV, and control of WYBC and WBNE-TV. In the 1970s, at least four locally owned radio stations in New Haven County had street reporters scouting the area for news. Now there's one, WQUN. Thus, says Adler, deregulation in broadcasting benefits "corporations whose allegiance is not to listeners or viewers but to stockholders who demand an ever-increasing return on their investment, a demand satisfied by cutting costs, reducing jobs, and generally sacrificing public service on the altar of greed."

At the major print newsmagazines, Time and Newsweek, the trend over ten years, 1987-1997, shows a distinct tilt toward more crowd-pleasing cover subjects and away from straight domestic and foreign news -- in the effort to snare the interest of impulse buyers at the newsstand and thus boost revenue. (Reporting foreign news is expensive: a U.S. correspondent stationed in pricey posts such as Hong Kong, Paris, or Moscow can easily cost $500,000 a year in pay, perks, and expenses.)

In 1987, Time published eleven covers relating to foreign news -- and only one in 1997. Its domestic hard-news covers dwindled from twelve to nine. Thus, the over-all total for straight news covers dipped from about 45 percent of the total ten years ago to only 20 percent last year. Studying the list of Time's 1997 cover choices, one sees stories on Ellen DeGeneres, Steven Spielberg, Generation X, the pop singer Jewel, Brad Pitt in a movie about Buddhism, Bill Cosby and the death of his son, plus "What's Cool this Summer," "Turning Fifty," (with a cover photo of Hillary Clinton), "How Mood Drugs Work...and Fail" and "The Most Fascinating People in America." Newsweek pitched in with 1997 covers on TV cartoon shows, JonBenet Ramsey, Bob Dylan, Deepak Chopra, plus "The Young Kennedys: A Dynasty in Decline," "Does It Matter What You Weigh? The Surprising New Facts About Fat," "The Scary Spread of Asthma and How to Protect Your Kids," "Behind the Mask: The Dark World of Andrew Cunanan... Versace's Life, Death and Legacy," "Buy? Sell? How to Invest Now," and a "Special Edition" on "Your Child From Birth to Three." Both Time and Newsweek ran covers on Princess Diana two weeks in a row, giving them the biggest newsstand sales in their histories.

How come all this emphasis on soft news and life-style issues? There are at least two reasons, says Norman Pearlstine, editor-in-chief of Time Inc., the nation's most successful magazine publishing company.

First: The economy is thriving, "so there's probably less concern with what has traditionally been the hard news story."

Second: With the collapse of communism and the end of the cold war, "it's not surprising that the country has turned more inward. There's always been a balance between educating your reader and serving your reader, but we're not getting a lot of demand for international coverage these days in broad consumer publications." Addressing a readership the size of Time's (domestic circulation: 4 million) "you obviously balance telling them what you think they ought to read with giving them what they want to read, and that balance has clearly shifted away from international news in the last decade."

Pearlstine recalls that in 1995, his first year at Time Inc., among the magazine's five worst-selling covers were: two on Bosnia, two on Senator Bob Dole, and one on Social Security. (Among the best sellers: "How Did the Universe Begin?", "Is the Bible Fact or Fiction?", and "Mysteries of the Deep.")

For the recent May 18 issues of Time and Newsweek, two stories competed for the cover: India's detonation of a nuclear device, and the death of Frank Sinatra. Sinatra won both covers. Ten years ago, says Pearlstine, the decision probably would have gone the other way.

"The great threat today to intelligent coverage of foreign news," Seymour Topping, former managing editor of The New York Times, told CJR, "is not so much a lack of the public's interest as it is a concentration of ownership that is profit-driven and a lack of inclination to meet responsibilities, except that of the bottom line." In newspapers, foreign news has declined drastically as a percentage of the news hole. In the newsweeklies, Hall's Magazine Editorial Reports found that from 1985 to 1995, space devoted to international news slipped from 24 percent to 14 percent in Time, from 22 percent to 12 percent in Newsweek, and 20 percent to 14 percent in U.S. News & World Report. The evening TV news programs, according to the Shorenstein Center at Harvard, gave 45 percent of their time to foreign affairs in the 1970s and a mere 13.5 percent in 1995. Result: the public is being drastically shortchanged in its capacity to learn what's going on in the world outside the U.S.'s borders.

Many news executives tiresomely argue that, in the late 1990s, all the research indicates that the public doesn't want to know about the rest of the world; that it's narcissisticly fixated on life at home in the U.S. -- its economy, celebrities, scandals, fads, and folkways. Media companies aim to feed that appetite.

But, says Ray Cave: It's no good to say that people now are not interested in consequential news. "The general public has never been truly interested in it. But we delivered it, like it or not. By so doing, we piqued public interest in the very matters that must, to some degree, interest the citizens of a democracy."

In network television, the audience for evening news broadcasts continues to dwindle. Competition grows fiercer for larger slices of a smaller pizza, and the quality of those broadcasts has suffered as they, too, offer more life-style stories and soft news in search of bigger audiences. In 1980, 37.3 percent of tuned-in homes viewed the three-network news programs every night; that slid to 24.3 percent in 1996-97.

The NBC Nightly News with Tom Brokaw has been the dominant newscast for almost two years. Staffers at CBS News and ABC News say that's because it has lowered its aim, too often substituting life-style and soft features for hard news in a transparent tactic to increase audience, raise advertising rates, and meet the profit expectations of its powerful parent, GE, the nation's most successful conglomerate. NBC News denies the charge.

But the temptation is great in every news medium to sweeten the product for easier consumption. A survey by the Project for Excellence in Journalism of some 4,000 stories on the three network news programs, on newsmagazine covers, and on the front pages of major papers from 1977 to 1997 concludes that celebrity, scandal, gossip, and other "human interest" stories increased from 15 percent to an astonishing 43 percent of the total.

Indeed, an irreversible rot in the hulls of all three of the old-line networks (in entertainment as well as news) has TV executives scurrying for new ways to build viewership and counter the threat of cable, the Internet, pay-per-view, and home satellite services. The ABC and CBS networks are operating in the red, and ratings-leader NBC's profit is melting from $500 million last year to about $100 million. "It's a time of total transition," CBS boss Leslie Moonves told The New York Times in May. "It's all ugly."

Ironically, all three networks are looking expectantly to their news divisions to help slow the decay. How? The major networks this fall will air TV newsmagazines six nights a week -- up from two in 1983. Why? They're much cheaper than most entertainment shows to put on the air; the networks own them outright, unlike sitcoms and dramas, which they lease from outside producers; and those programs get respectable ratings. NBC's Dateline is expanding to five nights a week. ABC is fusing 20/20 and PrimeTime Live into a three-times-a-week event. CBS hankers to make 60 Minutes -- its all-time most-successful series -- a twice-weekly program.

Those unprecedented schedule shifts will bring more news-and-feature programming to network audiences than ever before, but there's a flaw in the strategy. The soup will be thinner than ever. Reporters, producers, editors, and crews will be stretched over more working hours a week. The pool of story ideas inevitably will become more polluted and noxious for series that already have gone down the low road in search of ratings: e.g., Diane Sawyer's interview with Michael Jackson and former wife Lisa Marie Presley; Dateline NBCs piece on Baywatch babe Pamela Anderson; PrimeTime Live's chat with sometime O.J. Simpson girlfriend Paula Barbieri. 60 Minutes's executive producer Don Hewitt firmly opposes expanding his series to other nights, convinced that the program's quality can't possibly be maintained if diluted. But in CBS's no-holds-barred effort to squeeze more juice out of its prize property he'll almost surely be overruled.

Hewitt is fond of saying that 60 Minutes ruined it for everybody in news, proving as it did that a news program could be a colossal money machine, and perking managers' hopes that comparable riches could be extracted from all news broadcasts. CNN, as well, takes the rap for the broadcast networks' scorched-earth news budget cuts: Ted Turner established his all-news cable channel in a right-to-work state (Georgia), hired all nonunion journalists and staff, paid them far less than the going rates at ABC, CBS, and NBC, and built a hugely successful worldwide news organization. Corporate bosses at the broadcast networks mused: "Why can't we be as lean, mean, and successful as CNN?" They've been trying.

Ever since Mel Karmazin took over as CBS president (and heir apparent to chairman Michael Jordan), drastic fiscal strategies have been bruited in the corridors of the erstwhile Tiffany network, none of them favorable for the news division. The most attention-grabbing: CBS Corp. would sell off its money-losing CBS Television Network -- which, essentially, is merely a program supplier to local stations -- while retaining its very profitable station division. It consists of eighteen valuable owned-and-operated outlets.

The fate of CBS News in such a deal is shrouded in uncertainty. Traditionally in the television industry, separating a network from its owned stations is a heretical, risky notion. But as Merrill Lynch analyst Jessica Reif Cohen points out, such ancient, entrenched theorems may be ready for the dustbin of history: "New CBS management is very aggressive," she writes, "toppling a variety of broadcast traditions in order to build shareholder value and willing to explore a large number of strategic options."

Indeed, Karmazin, who has no background in news, is the broadcast industry's model hero for cost-cutting schemes. When he arrived at CBS, 60 Minutes humorist Andy Rooney told the Minneapolis Star Tribune: "Nothing good has happened around here for so long I can't imagine [Karmazin's accession] is going to be good .... The emphasis is so much more on money than content in every decision that's made that it's discouraging to be here."

Time was when the evening news programs assigned crews to cover (as one veteran puts it) "everything that moved" -- every viable news story every day all over the world. The end began with the buyouts and downsizing of the mid-1980s. More and more coverage came from local stations and independent newsfilm services, and at far less expense. That shift allowed the networks to close many bureaus at home and abroad. Frequently sacrificed, though, was the incisive, polished authority that the best TV news correspondents had brought to the reporting of important news.

Even as TV news operations cut budgets and spread their staffs thinner and thinner to the detriment of news coverage, they continue to pay "star" performers princely sums in the conviction that those engaging faces and voices are their last bulwark against even further audience defection. Thus, Rather, Brokaw, Jennings, Sawyer, and Walters each receive compensation in the $7 million a year range for their putative appeal in attracting viewers -- a talent that transcends the quality of the programs they inhabit. CNN's Larry King, host of cable's top-rated, celebrity-infested interview program, is also a &7 million-a-year property. "With everything that's included in the deal, I'll be in the same ballpark as the network guys," King said proudly when the contract was signed in May. Said CNN president Tom Johnson: "Larry's ratings were up sharply last year, and he's had a great first quarter .... "

That was good news for King, all right, but simultaneously CNN parent Time Warner cut almost a fourth of the staff-seventy jobs out of 300 -- at its Headline News cable channel, thus saving about $2 million but leaving cable news viewers the poorer for it. A few weeks earlier, TW chairman Gerald Levin predicted the company would increase its cash flow by 16 to 18 percent annually for the next few years. The Time Inc. magazines, collectively, are expected to raise their profits by 15 percent a year.

Obsession with ratings is at an all-time high in television news. One former high-level news producer recalls: "When I first joined the network, you'd probably be fired if you talked about ratings in the newsroom. The newspapers didn't even publish ratings at that time. Nobody ever suggested we do a story because it would get ratings. If somebody from the entertainment side or the promotion department came to us and suggested we do a piece about a lesbian coming out in a prime-time sitcom, we would have yelled `Forget about it!' It's unbelievable how much of that junk gets on the air."

The question (more relevant than ever) for journalists: Is news what the public is interested in or what's in the public interest? Says Reuven Frank, former president of NBC News: "This business of giving people what they want is a dope pusher's argument. News is something people don't know they're interested in until they hear about it. The job of a journalist is to take what's important and make it interesting."

Closing news bureaus at home and abroad has been one of the more conspicuous effects of cost-cutting ever since ABC, CBS, and NBC changed ownership in the mid-1980s. No broadcast network now has a full-fledged bureau (with correspondent, camera crews, and office staff) anywhere in Africa or Latin America; Europe is covered mostly from London, Moscow, and Tel Aviv. (CNN, on the other hand, maintains twenty-three bureaus outside the U.S.)

"Roving bands of free-lance cameramen," says veteran TV news producer Av Westin, "shoot coverage at every crisis spot at home and abroad and sell it to networks and local stations." He calls them "the video equivalent of paparazzi." ABC News closed its San Francisco bureau in April, around the time the news division reportedly was figuring out how to comply with a ukase from parent Disney to cut between $25 million and $50 million from its $625 million budget.

Hour-long, single-subject documentaries on key issues virtually disappeared from broadcast networks years ago -- illustrious series such as CBS Reports, NBC White Paper, and ABC Close-Up. Those programs had been the news divisions' crown jewels. (But occasionally TV news surprises, with a spurt of its old energy. ABC News, for example, is embarked on the most ambitious documentary ever: The Century, a $20 million, twenty-seven-hour series to begin next March, a colossal survey of the last hundred years. And CNN in September will launch Cold War, a massively researched, twenty-four-segment history. But even series on so grand a scale are expected to pay their own way or even make a profit.)

In the newspaper industry, last year was a watershed for two big reasons: trafficking in papers was at an all-time high; and profits boomed, even as circulation continued to slide. It was dubbed The Year of the Deal: 162 dailies out of 1,509 changed hands, up 37 percent from the year before. Mega-deals abounded: Knight Ridder bought The Kansas City Star, the Fort Worth Star-Telegram, and two other papers from Walt Disney Company for $1.65 billion; McClatchy Newspapers snared Cowles Media for $1.4 billion. Transactions for the year hit a record $6.23 billion. As of February 1, 81 percent of those 1,509 dailies were members of a chain or group. Gene Roberts, former managing editor of The New York Times and now a journalism professor at the University of Maryland, told a press group in California:

News coverage is being shaped by corporate executives at headquarters far from the local scene. [The shaping] is seldom done by corporate directive or fiat. It rarely involves killing or slanting stories. Usually it is by the appointment of a pliable editor here, a corporate graphics conference there, that results in a more uniform look, a more cookie-cutter approach among the chain's newspapers, or the corporate research director's interpretation of reader surveys that see common denominator solutions to complex coverage problems .... As papers become increasingly shallow and niggardly, they lose their essentiality to their readers and their communities. And this is ultimately suicidal.

Alarmingly, only fifty-five American cities now have more than one paper. The sharp decline in the numbers of dailies competing vigorously against each other has damaged the quality and squeezed the amount of reporting in American papers. Studies show that in cities where competition is hot, the news holes tend to be larger and there are more reporters to fill them. "The absence of competition tends to affect the financial commitment of publishers to the news-editorial department," says a forthcoming survey by the Columbia Institute for Tele-Information.

What kind of returns do chains demand to justify high purchase prices? Steven S. Ross, a Columbia Journalism School associate professor, explains: "This is what is historically new. Today, if a paper underperforms, its stock price is threatened and it's vulnerable to takeover. A twenty-five percent return on gross revenues sounds pretty good to a paper's staff. But the new owner's board says, `We paid $500 million for that company. How dare they earn only twenty-five percent?'"

Complaints abound from editors of large chain papers that the investment they require to produce a superior paper is being drained away to meet owners' profit demands. That shows up in large ways and small: when Gannett took over The Asbury Park Press in New Jersey, it cut the staff from 225 to 180, and told the theater critic there was no money for him to cover Broadway plays.

A particularly instructive case history is that of The Patriot-Ledger of Quincy, Massachusetts. It's a 161-year-old daily that was sold in February to Newspaper Media LLC for about $95 million by the Low family, which had owned it for four generations. The paper actually was worth $70-$75 million, according to analysts. In need of larger operating margins to service their heavy debt, the new owners decreed that the editorial budget be slashed from $7 million to $5.5 million; 17 to 18 percent of the paper's costs had been devoted to news and editorial, but that was reduced to 10-12 percent. The Patriot-Ledger serves twenty-six communities near Boston, and had at least one full-time reporter in all of them -- several in larger suburbs like Weymouth, Braintree, and Plymouth. Too expensive, said the paper's new publisher, James Plugh. Also: twelve vacancies existed in the newsroom at the time of the ownership change, but Newspaper Media declined to let them be filled. The paper's value to its readers has been grievously undermined as result of such economies.

Unwilling to function in that new environment, The Patriot-Ledger's editor of twenty years (and former president of ASNE) William Ketter, resigned on May 29. Speaking generically of the nationwide profits-versus-quality controversy, Ketter says: "I'm concerned about the prices being paid for newspapers and the need for greater profit margins to meet those financial obligations. The squeezing of editorial budgets is a shortsighted way of dealing with that need. When you start diminishing and degrading the nature of newspapers' content, you run the risk of those papers being less valuable in the marketplace."

Says The Oregonian's Sandra Mims Rowe: "Newspapers don't invest nearly enough in their employees, especially in training and teaching. There are journalists in the streets of every town who cannot report, write, or edit with authority, cannot provide the rich, full, detailed, accurate story the reader wants."

Evidence mounts that the blurring of editorial-advertising distinctions -- as the latest technique in profit-building -- is compromising news judgments and decisions, resulting not so much in fawning pieces about major advertisers but rather in self-censorship, a reluctance by some editors to take the heat for doing stories critical of spacebuyers.

Witness: the highly-publicized move by Los Angeles Times publisher Mark Willes to involve marketing/advertising executives in the paper's day-to-day editorial decisions, a tactic that continues to draw fire from journalists around the country. The big fear is that if journalists have to worry about advertising and profits, they may self-censor and shrink from producing tough coverage of stories inimical to advertisers' interests. But what Willes has done is being copied at many other papers in this new era of profit-worship.

In a self-justifying speech to ASNE in April, Willes pointed out that more than 200 papers have closed in the last twenty-five years; that overall newspaper circulation has declined 10 percent in the last dozen years (while the population has grown 12 percent); that newspapers now attract less than 22 percent of all advertising, down from 27 percent in 1980; that only 58 percent of adults read a daily newspaper, down from 81 percent in 1964; that barely a third of the population cites newspapers as their main source for national news; and that in a recent Gallup poll, Americans ranked the honesty and integrity of newspaper reporters behind police officers and TV reporters, and only slightly ahead of lawyers and building contractors. If those trends continue, Willes warned, "newspapers will be increasingly marginalized, less important and, therefore, less relevant." For such reasons, he argues, it behooves editors and business-side managers to work together, more closely than in the past, to help assure the good health of newspapers. Willes's diagnosis of newspapers' illness is impressive. But his ideas for the cure alarm many journalists.

The subject of compensation and incentive pay troubles the University of Iowa's Soloski. There are major implications when the bonuses of media executives depend solely on the economic -- and not the journalistic -- performance of their publications. With a direct interest in his paper's profits, can the editor truly exercise uncontaminated judgment in covering controversial subjects or advertisers that might take offense and defect? The answer is yes, of course, the honest editor can -- but she or he must always be aware of the potential for conflict.

Many publishers are increasingly pressing for special sections of their papers as a magnet for advertisers and readers, even though the content of those (continuing or occasional) sections is often frivolous, and creating them places added stress on news staffs. The Wall Street Journal has its new Friday section called Weekend Journal, filled with entertainment and life-style advice and related advertising. In mid-May, The New York Times published a massive sixty-four-page special section on the charms of eastern Long Island, mostly the fashionable Hamptons, with articles on sailing, kayaking, land development, dining, sport fishing, and (of course) the famous showbiz and media folk who summer there -- along with a tonnage of advertising from real estate agents, restaurants, clothing boutiques, liquor stores, nurseries, and country inns. (A study sponsored last year by ASNE and the Newspaper Association of America discovered that newspaper advertisements better meet readers' expectations than does the quality of news coverage,)

The questions: Are such sections an editor's vision of a value-added supplement that fills an important editorial need, or mainly a publisher's gambit for a quick-hit spike in revenue? And can those sections be executed without draining resources from the paper's main service?

Such one-time and continuing special sections are a greater strain on papers that don't have the legendary resources of The Wall Street Journal or The New York Times. But the criterion for success is usually the same: economic, not journalistic. At the Los Angeles Times, for example, where the editor of a daily section is yoked uncomfortably with a counterpart from the ad department, a section's survival chances depend heavily on its capacity to generate revenue, not on its journalistic excellence.

A comparable syndrome exists in the magazine industry: special issues, which exploit the value of a rifle in the effort to squeeze additional income from its brand-name identity. It's an old tactic that's employed with ever greater frequency these days to prettify the bottom line, even as editorial staffs have been pruned and there are often fewer people to take on the task. Can a magazine editor, who presumably occupies a full-time job, effectively oversee these special issues -- on the passing of Frank Sinatra, Princess Diana, the Seinfeld sitcom -- and still do his main job? "When the driving force is economic and not journalistic," says a senior editor of a national magazine, "the push is coming from the wrong direction. I would rather use that energy and that talent to improve my main product than to create a one-time offshoot. It's all very well to say I can do both, but I'm not sure anybody can, without weakening the core magazine."

The underlying debate continues. Profits. Return on investment. The public's right to know. Shareholder value. Journalistic responsibility. Are the terms incompatible? Not necessarily. Early in this century, the great labor leader Samuel Gompers said: "The worst crime against working people is a company which fails to operate at a profit."

But should news organizations reasonably expect the same profit levels as software companies, pharmaceutical firms, and computer makers? Or should stockholders and owners understand, when they wed their fortunes to those of working journalists, that news is a venture like no other? It's the only business protected by the Constitution of the United States, a status that brings obligations for both the shareholder and the journalist. "I wish investors and owners of media companies could be made to understand the incredible responsibility they've assumed," says Walter Cronkite, "and accept a reasonable return instead of the excessive profits that can be garnered elsewhere."

If that's too much to expect in this era of mega-media conglomerations, a surging economy, a galloping Wall Street, and chronic public dismay about the press, then the mission of journalism in America may be perilously debilitated. The big question: What doth it profit a media company to demand, unremittingly, steadily higher profit margins year after year and, in that very pursuit, lose its professional soul?

Neil Hickey is CJR's editor at large. Additional reporting for this article was provided by David Cudaback, former editor of Institutional Investor.

Source Citation

Source Citation   (MLA 8th Edition)
Hickey, Neil. "Money lust: how pressure for profit is perverting journalism." Columbia Journalism Review, vol. 37, no. 2, 1998, p. 28+. Gale Academic Onefile, Accessed 20 Aug. 2019.

Gale Document Number: GALE|A20953748