Commentary

Local Publishers Face Existential Threat Until COVID-19 Recovery

Last week brought more devastating developments for many publishers that depend on local businesses and events for income. In response to the coronavirus pandemic, city and state authorities nationwide ordered many businesses to suspend operations to lessen the possibility of infection in public gathering places.

While restaurants can offer takeout and delivery, providing at least some source of income, the same isn't true for other businesses, such as retailers, bars, theaters, gyms and concert venues. Their media spending is the lifeblood for many local publishers.

They face an existential crisis far worse than the recessions that followed the dot-com crash in 2000 and the collapsing subprime mortgage bubble that led to the 2008 financial crisis. The 9/11 attacks were devastating, but ended up being a much more isolated threat than an infectious disease putting millions of Americans out of work.

The slow and steady rise in confirmed coronavirus infections is agonizing, and it shows no sign of reversing yet.

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Last week, an owner of local newspapers in Northern California explained how the dearth of advertising from local businesses led him to suspend print publishing and lay off almost all employees.

"This week, we have less than $20,000 in expected revenue to cover $45,000 of expenses," Jeff vonKaenel, president CEO and majority owner of the News & Review newspapers in Sacramento, Chico and Reno, wrote in a letter to readers.

He said it would continue to publish news and arts coverage in a digital blog and pleaded for donations, as many other publications have done. 

There is no question that cutbacks are agonizing. Ideally, publishers like the News & Reviewcan recover with the resumption of business activity. Publishing is more of a labor-intensive business than a capital-intensive enterprise -- few publishers have their own printing facilities, while setting up a website is easier than ever.

Fortunately, many local businesses like bars, restaurants, theaters and stories can get back to work relatively quickly after closing for a brief period. The biggest unknown is time — how long these businesses will be required to stay closed, and how quickly they can recover.

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