Suzanne M. Kirchhoff Analyst in Industrial Organization and Business September 9, 2010
Congressional Research Service 7-5700 www.crs.gov R40700
CRS Report for Congress
Prepared for Members and Committees of Congress
The U.S. Newspaper Industry in Transition
The U.S. newspaper industry is suffering through what could be its worst financial crisis since the Great Depression. Advertising revenues have plummeted due in part to the severe economic downturn, while readership habits have changed as consumers turn to the Internet for free news and information. Some major newspaper chains are burdened by heavy debt loads. Between 2008 and early 2010, eight major newspaper chains declared bankruptcy, several big city papers shut down, and many laid off reporters and editors, imposed pay reductions, cut the size of the physical newspaper, or turned to Web-only publication. Newspaper publishers in 2010 have seen some improvement in financial conditions, with many reporting higher profits, but the industry has not yet turned the corner. Advertising dollars are still declining and newspapers have not found a stable revenue source to replace them. As the problems continue, there are growing concerns that the decline of the newspaper industry will impact civic and social life. Already there are fewer newspaper reporters covering state capitols and city halls, while the number of states with newspapers covering Congress full-time dwindled to 23 in 2008 from the most recent peak of 35 in 1985. As old-style, print newspapers decline, new journalism startups are developing around the country, aided by low entry costs on the Internet. The emerging ventures hold promise but do not yet have the experience, resources, and reach of shrinking mainstream newspapers. Congress has begun debating whether the financial problems in the newspaper industry pose a public policy issue that warrants federal action. Whether a...