Several local newspapers on the west coast announced this week that the coronavirus crisis is forcing them to suspend publication, perhaps indefinitely.
Jeff vonKanael, the president of the Sacramento, Chico and Reno News & Reviews, three small alternative weekly newspapers in California and Nevada, on Tuesday announced the economic impact of the corona pandemic “could be the end” for the organizations. Almost all of the staff will be temporarily laid off, and the print editions will cease to be published for now.
VonKanael said in a statement that the drastic move came because of a steep drop in ad revenue from local events and businesses, after many California cities closed “non-essential” businesses including movie theaters, concert venues and art galleries to curb the spread of the coronavirus. The Chico News & Review reported losing 50% of its ad revenue in less than a week.
“When the Centers for Disease Control and Prevention said all events with more that 50 people are shut down, I thought to myself, ‘We’re done,’” VonKanael said on Thursday. “I’m a pretty good salesperson, but to try and place ads for events that aren’t happening and businesses that are closing is beyond my abilities.”
“It came as sad news but not as a surprise,” echoed the Reno News & Review editor, Brad Bynum. “We felt like we were on borrowed time for a while.
“We wrote about the local bands, businesses and breweries, and that’s who we depended on for revenue,” Bynum continued.
News of the recent closures and layoffs are a stark reminder of the precarious financial positioning of some local news organizations, and it comes exactly at a time when local outlets are a potentially lifesaving, trusted source of information for readers in communities across the US.
“The possibility of newspapers closing is incredibly worrisome right now, especially because the information we need around the coronavirus are things at the local and municipal level,” said Mike Rispoli, director of News Voices, a not-for-profit local news advocacy group.
Rispoli said the closure of local newspapers would leave many readers to seek information from major national news sources. Those sources have larger and more diverse revenue streams, wider circulations and bigger audiences, but they often lack the specific local information that people need to navigate their daily lives, he noted.
“Just like the coronavirus has laid bare fundamental problems in our healthcare and education systems, it’s also exposing inequities in our media system, especially when it comes to local news,” Rispoli said.
Local newspapers that still produce print editions have come under growing pressure since the shift to digital subscriptions and online ad revenue have become more widespread.
Before that transition, advertisement revenue typically accounted for 60% to 80% of print papers’ total revenue. But amid the changes, both readership of print papers and advertising dollars began to decline. In California, nearly a quarter of the state’s local newspapers shut down between 2004 and 2019, as readership and revenue moved online. According to a 2018 analysis from UNC’s Hussman School of Journalism and Media, many of the remaining papers came to rely on local ads for much of their revenue. With local businesses closed amid the coronavirus pandemic, the sudden plummet in ad sales has left many small local print newspapers even more vulnerable.
“Newspapers will have that much more vanishing revenue to make up,” said Rick Edmonds, the business and media analyst for the Poynter Institute for Media Studies. “They’re losing money and may be unprofitable and heavily extended in terms of credit.
“They may even have difficulty paying loans, as many businesses will in the months ahead.”
In addition, local newspapers are under additional financial pressure because many large regional and national papers have dropped their paywalls for coronavirus coverage, allowing readers unlimited access to those stories. Local news organizations may feel they have to follow the trend, even though many cannot afford to lose revenue from clicks and digital subscriptions.
Since orders to close local businesses are still new, and reports of recent layoffs in the retail and food industries are being released and updated daily, questions about the pandemic’s ultimate economic impact will remain unanswered for months. There is no way to know how many local papers will be affected yet, and how long these organizations will have to suspend publication.
VonKanael predicted, however, that the effects would be felt far and wide. “This is like a tidal wave,” he said of the many layoffs and business closures. “Everyone’s in the same boat economically, so I feel very un-special.”
Since VonKanael announced the suspension, he said, the organization has received $17,000 in donations. And while he hopes that the News & Review can eventually restart its operation, he and Bynum worry that the economic impact of the coronavirus could exacerbate existing issues that are consequences of the decline in local news sources.
“The decline’s been a gradual one,” VonKanael said of the shuttering of local publications. “It’s like global warming, the impacts are there, but people are not noticing as much as they should.”
“People will either get their news from others who are just posting things on social media without doing research,” echoed Bynum, “Or they’re gonna get it from distant, uninvolved corporate sources.”