Smaller Newspapers Feel the Squeeze

While they are still better off than their big-city counterparts on average, smaller newspapers are also feeling the effects of the economic downturn and Internet competition, according to a long-term study from the Inland Press Association. The study's findings temper the optimistic view evinced by many publishers in smaller markets, who take pains to distinguish their properties from the big metro dailies. Over five years ending in 2008, newspaper profitability fell across the board regardless of size, the Inland study found. This included large drops at newspapers with circulations of 25,000-50,000 -- one of the segments that was supposed to be faring better than the big metro dailies. If this trend continues, bankruptcy and sale or closure could follow for scores of newspapers, as the plague afflicting big metro dailies infects smaller markets. Their fate will largely be determined by indebtedness, which has proved the bane of big publishers, especially with the global credit crunch. Like any other small business, small newspapers without a lot of debt will be in a much better position to weather an extended downturn than those that borrowed extensively to replace printing presses, buy real estate, or acquire other newspapers.