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The growing crisis in the Maine newspaper industry

The coronavirus is renewing longstanding economic challenges for newspapers

by | April 23, 2020

Editor’s Note: An earlier version of this story misstated the growth rate of digital subscribers at Masthead Maine newspapers. That error has been corrected.

As the coronavirus pandemic ushers in economic uncertainty across industries, newspapers are in precarious positions. Their dual role of informing the public about the realities of the crisis and holding power to account is never more important than it is in moments like this. But newspapers are also facing a deep-seated workforce problem.

That concern is not new to Maine publishers. For the past two decades, the state’s newspaper industry has jostled between periods of secular industry decline and widespread economic calamity.

From 2000 to 2018, six in 10 newspaper publishing jobs have disappeared and wages have grown sluggishly at best. Only paper mills, semiconductor manufacturers, wood-product makers and vocational rehabilitation service providers shed jobs at a faster rate in the state.

For the moment, industry leaders are cautiously optimistic. Newspaper jobs in Maine have fared better than most states. Maine ranked ninth when comparing the rates of change in overall jobs to the rate of change in newspaper publishing jobs, from 2000 to 2018.

At the independently owned Lincoln County News, editor J.W. Oliver has an educated guess why: the state’s high median age and rurality translates to readers who are more likely to hang on to print newspaper subscriptions.

J.W. OLIVER

“We have had a lot longer how to figure out how we’re going to fund journalism here,” said Oliver, who is also the president of the Maine Press Association.

In the short term, large and small Maine newspapers plan to fund journalism with the federal loan program that offers to cover roughly eight weeks of expenses for businesses that maintain or restore employee levels by June 30. The independent weekly Lincoln County News and the state’s largest newspaper group — Masthead Maine, which includes Portland, Augusta, Lewiston, Brunswick and Waterville dailies — both received funding this week, according to their publishers.

Richard Warren, publisher and owner of Bangor Publishing Co., which puts out the Bangor Daily News, did not respond to an email asking if the company applied for or received funds from the payroll protection program.

LISA DESISTO

Newspapers receiving help from government entities they are duty-bound to hold accountable is an unusual situation, but one that may be required to keep the local news businesses alive.

“That program is really giving us the kind of runway that we need to offset the decline that we’ve seen in advertising,” said Lisa DeSisto, CEO of Masthead Maine.

The program is generally limited to companies of 500 employees or fewer, but the 620-employee Masthead Maine applied based on industry size standards from the U.S. Small Business Administration, which sets an employee threshold of 1,000 for newspaper publishers.

“We’re lucky to be owned locally,” DeSisto said. “Many of the bigger chains don’t have access to the program.”

Masthead is not planning on layoffs or furloughs, but DeSisto said that was contingent on the timing of the paycheck protection program loan, which it received Monday.

“This is a rapidly changing situation from a business perspective, so we’re staying really close to the metrics,” DeSisto said.

So is Peter McGuire, head of The News Guild of Maine. But McGuire, a business reporter at the Portland Press Herald, has had his eyes on more broadly troubling numbers.

PETER MCGUIRE

On March 26, McGuire wrote his first story about the astronomical jump in weekly unemployment claims. On April 2, there was a new record. On April 9, he wrote that story a third time.

“This, for me, has become oddly normal,” said McGuire, after a shift that lasted until 7 p.m. “When the first story came in, it was the news to end all news — and that was two or three weeks ago?”

It wasn’t until April 16 that McGuire reported weekly unemployment claims had dropped for the first time since the World Health Organization declared the coronavirus outbreak a pandemic.

The sharpness of the downturn has caused him to wonder about its depth, though.

“The expectation that we come out of this in two months and that whatever ad revenue that we had suddenly pops back to life, I don’t know how realistic that is,” McGuire said.

It’s also difficult to imagine the lingering effects of covering a global pandemic.

“I don’t know how long this is going to be, but this is going to stick with me for a long time,” McGuire said.

The downturn comes on the heels of the News Guild negotiating the first raise in years for its members last fall, a two percent increase with another one percent increase due this year.

Historically, newspaper publishers in Maine raised wages at the second slowest rate in the country, behind only Rhode Island, according to figures from the Quarterly Census of Employment and Wages. In Massachusetts, newspaper publishing wages rose 107 percent, not adjusted for inflation, during that time. Maine’s rose 57 percent.

“What kind of keeps me up at night about the future of our industry is not whether people will like the work, but will we be able to do the work because the business model is under threat?” McGuire said.

Looking across Maine’s economy, reporting and correspondent jobs fare well enough from a wage standpoint. Jobs as a reporter or correspondent at any news outlet — including radio and television — paid an average wage of $39,290 in 2018, which is $2,170 higher than the statewide median. But estimated entry-level and experienced wages were slightly below average.

Jobs making comparable wages in Maine include: pipe-layers, chemical technicians, credit counselors and correctional officers.

While advertising has plummeted, DeSisto said the company is trying to retain what revenue it can, doing things like shifting events online and seeking an institutional sponsor to support keeping coronavirus coverage free for the public.

And there are early signs that digital subscriptions are taking hold in a new way. DeSisto said Masthead papers saw a 76 percent jump in digital subscriptions last month, compared with March 2019. March website visits jumped 62 percent from January and February.

“Some people (are appreciating) for the first time how vital newspapers and journalism are to serving the community,” DeSisto said. “We really hope that that mindset lasts long after we stop our social distancing.”

Oliver, at the Lincoln County News, also sees that as vital to long-term success, particularly for younger readers.

To remain sustainable, Oliver said younger readers and business owners need to be convinced that “a subscription or an advertisement is more than a commercial transaction — it’s an investment in the accountability of local government and in accurate, objective information about local events.”

While the drop in revenue has come suddenly, DeSisto said the paper is benefitting from longer-term strategies to shift the company’s revenue base toward digital subscribers.

The effort includes cutting Monday print editions, which happened on March 1. In advance of that change, DeSisto said the company worked for months to enroll as many print subscribers as possible in digital subscriptions.

“The work is too important to fail,” DeSisto said.

Warren, at Bangor Publishing, declined to weigh in, saying he did not want to speculate on the pandemic’s impact on the news industry. Company president Todd Benoit did not respond to an email seeking comment.

Dermot Murphy, an assistant finance professor at the University of Illinois at Chicago who specializes in public finance, found that the death of local newspapers translated to higher borrowing costs and less efficient operations for local governments:

We found that local government borrowing costs significantly increased for counties that have experienced a newspaper closure compared to geographically adjacent counties with similar demographic and economic characteristics without newspaper closures.

Other research Murphy cited indicates that “a lack of local media coverage” is associated with less informed voters, lower voter turnouts and less engaged local politicians.

“A newspaper is an essential part of a healthy community,” Oliver, of the Lincoln County News, said. “Facebook is not going to serve the same function. Radio and television journalism is important, but is not going to replace the local journalism newspapers do.”

Editor’s Note: An earlier version of this story misstated the growth rate of digital subscribers at Masthead Maine newspapers. That error has been corrected.

As the coronavirus pandemic ushers in economic uncertainty across industries, newspapers are in precarious positions. Their dual role of informing the public about the realities of the crisis and holding power to account is never more important than it is in moments like this. But newspapers are also facing a deep-seated workforce problem.

That concern is not new to Maine publishers. For the past two decades, the state’s newspaper industry has jostled between periods of secular industry decline and widespread economic calamity.

From 2000 to 2018, six in 10 newspaper publishing jobs have disappeared and wages have grown sluggishly at best. Only paper mills, semiconductor manufacturers, wood-product makers and vocational rehabilitation service providers shed jobs at a faster rate in the state.

For the moment, industry leaders are cautiously optimistic. Newspaper jobs in Maine have fared better than most states. Maine ranked ninth when comparing the rates of change in overall jobs to the rate of change in newspaper publishing jobs, from 2000 to 2018.

At the independently owned Lincoln County News, editor J.W. Oliver has an educated guess why: the state’s high median age and rurality translates to readers who are more likely to hang on to print newspaper subscriptions.

J.W. OLIVER

“We have had a lot longer how to figure out how we’re going to fund journalism here,” said Oliver, who is also the president of the Maine Press Association.

In the short term, large and small Maine newspapers plan to fund journalism with the federal loan program that offers to cover roughly eight weeks of expenses for businesses that maintain or restore employee levels by June 30. The independent weekly Lincoln County News and the state’s largest newspaper group — Masthead Maine, which includes Portland, Augusta, Lewiston, Brunswick and Waterville dailies — both received funding this week, according to their publishers.

Richard Warren, publisher and owner of Bangor Publishing Co., which puts out the Bangor Daily News, did not respond to an email asking if the company applied for or received funds from the payroll protection program.

LISA DESISTO

Newspapers receiving help from government entities they are duty-bound to hold accountable is an unusual situation, but one that may be required to keep the local news businesses alive.

“That program is really giving us the kind of runway that we need to offset the decline that we’ve seen in advertising,” said Lisa DeSisto, CEO of Masthead Maine.

The program is generally limited to companies of 500 employees or fewer, but the 620-employee Masthead Maine applied based on industry size standards from the U.S. Small Business Administration, which sets an employee threshold of 1,000 for newspaper publishers.

“We’re lucky to be owned locally,” DeSisto said. “Many of the bigger chains don’t have access to the program.”

Masthead is not planning on layoffs or furloughs, but DeSisto said that was contingent on the timing of the paycheck protection program loan, which it received Monday.

“This is a rapidly changing situation from a business perspective, so we’re staying really close to the metrics,” DeSisto said.

So is Peter McGuire, head of The News Guild of Maine. But McGuire, a business reporter at the Portland Press Herald, has had his eyes on more broadly troubling numbers.

PETER MCGUIRE

On March 26, McGuire wrote his first story about the astronomical jump in weekly unemployment claims. On April 2, there was a new record. On April 9, he wrote that story a third time.

“This, for me, has become oddly normal,” said McGuire, after a shift that lasted until 7 p.m. “When the first story came in, it was the news to end all news — and that was two or three weeks ago?”

It wasn’t until April 16 that McGuire reported weekly unemployment claims had dropped for the first time since the World Health Organization declared the coronavirus outbreak a pandemic.

The sharpness of the downturn has caused him to wonder about its depth, though.

“The expectation that we come out of this in two months and that whatever ad revenue that we had suddenly pops back to life, I don’t know how realistic that is,” McGuire said.

It’s also difficult to imagine the lingering effects of covering a global pandemic.

“I don’t know how long this is going to be, but this is going to stick with me for a long time,” McGuire said.

The downturn comes on the heels of the News Guild negotiating the first raise in years for its members last fall, a two percent increase with another one percent increase due this year.

Historically, newspaper publishers in Maine raised wages at the second slowest rate in the country, behind only Rhode Island, according to figures from the Quarterly Census of Employment and Wages. In Massachusetts, newspaper publishing wages rose 107 percent, not adjusted for inflation, during that time. Maine’s rose 57 percent.

“What kind of keeps me up at night about the future of our industry is not whether people will like the work, but will we be able to do the work because the business model is under threat?” McGuire said.

Looking across Maine’s economy, reporting and correspondent jobs fare well enough from a wage standpoint. Jobs as a reporter or correspondent at any news outlet — including radio and television — paid an average wage of $39,290 in 2018, which is $2,170 higher than the statewide median. But estimated entry-level and experienced wages were slightly below average.

Jobs making comparable wages in Maine include: pipe-layers, chemical technicians, credit counselors and correctional officers.

While advertising has plummeted, DeSisto said the company is trying to retain what revenue it can, doing things like shifting events online and seeking an institutional sponsor to support keeping coronavirus coverage free for the public.

And there are early signs that digital subscriptions are taking hold in a new way. DeSisto said Masthead papers saw a 76 percent jump in digital subscriptions last month, compared with March 2019. March website visits jumped 62 percent from January and February.

“Some people (are appreciating) for the first time how vital newspapers and journalism are to serving the community,” DeSisto said. “We really hope that that mindset lasts long after we stop our social distancing.”

Oliver, at the Lincoln County News, also sees that as vital to long-term success, particularly for younger readers.

To remain sustainable, Oliver said younger readers and business owners need to be convinced that “a subscription or an advertisement is more than a commercial transaction — it’s an investment in the accountability of local government and in accurate, objective information about local events.”

While the drop in revenue has come suddenly, DeSisto said the paper is benefitting from longer-term strategies to shift the company’s revenue base toward digital subscribers.

The effort includes cutting Monday print editions, which happened on March 1. In advance of that change, DeSisto said the company worked for months to enroll as many print subscribers as possible in digital subscriptions.

“The work is too important to fail,” DeSisto said.

Warren, at Bangor Publishing, declined to weigh in, saying he did not want to speculate on the pandemic’s impact on the news industry. Company president Todd Benoit did not respond to an email seeking comment.

Dermot Murphy, an assistant finance professor at the University of Illinois at Chicago who specializes in public finance, found that the death of local newspapers translated to higher borrowing costs and less efficient operations for local governments:

We found that local government borrowing costs significantly increased for counties that have experienced a newspaper closure compared to geographically adjacent counties with similar demographic and economic characteristics without newspaper closures.

Other research Murphy cited indicates that “a lack of local media coverage” is associated with less informed voters, lower voter turnouts and less engaged local politicians.

“A newspaper is an essential part of a healthy community,” Oliver, of the Lincoln County News, said. “Facebook is not going to serve the same function. Radio and television journalism is important, but is not going to replace the local journalism newspapers do.”

Author

Darren Fishell

Darren Fishell is a data visualization specialist and investigative reporter based in Portland. He previously worked as an investigative reporter and business reporter at the Bangor Daily News, where he specialized in energy issues.

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