• DMNews.com, Wednesday, February 21, 2007 12 PM

A study from the University of Missouri has found that newspapers are underspending on newsgathering activities, while overspending on circulation and advertising. And researchers analyzing financial data of small to medium-size newspapers with a circulation of 85,000 or less found that news quality most directly affects the bottom line.

That assessment was made using a mathematical formula that breaks down revenue and expenditures from news, advertising and circulation departments, then predicts profitability. Esther Thorson, a professor of advertising and associate dean for graduate studies at the School of Journalism and one of the study's leaders, also notes that newspapers have lost some of their appeal to high-dollar advertisers, such as automobile dealerships and major retail establishments to specialized Web sites.

Read the whole story at DMNews.com »