A Moody’s report released Thursday tells the US Newspaper industry that it’s cost structure is way out of balance and to fix it or expect further credit ratings downgrades.
If newspapers can’t monetize the content in new digital channels at the same level as with print, or cut structural costs enough to keep up with the changing competitive environment, the prospect of additional recapitalizations or shutdowns will grow, adding further pressure to ratings.
You may wonder what’s the deal here? How could these companies let this situation happen with no apparent adequate response? Well dear reader, there can be many reasons for the big bucket-o-trouble.
Momentum – Long term capital equipment contracts, union contracts, senior manager’s hanging on until retirement, political ideology, owners planning on bankruptcy to get rid of unions and equipment contracts, human nature to do the familiar and to be fearful of change, etc.
Something to think about (information, aka News, eventually will be freely available). In the future you will pay based on relevance for some news from trusted sources. It will be your choice.
The full report is available on Moody’s site and here.