The writing is on the wall for New Jersey's largest newspaper The Star-Ledger, and it doesn't look good. The newspaper's obituary could be written as soon as January unless its owners, the Newhouse family, receive concessions, which includes reaching a new contract with a truck driving union by October, from the paper's employees.
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The owners are also demanding that 200 of its 750 full-time employees take buyouts. Company executives reportedly are doubtful that the newspaper will be able to reach a contract agreement as well as its targeted number of buyouts. After three straight years of losses, management claims the initiatives are necessary for staving off additional losses, which are expected to be between $30 million and $40 million in 2008.
The Star-Ledger blames its woes on the fall of advertising revenue as well as a slowdown in subscriptions because of intense competition from the Internet. The New Jersey paper's problems are not endemic to itself as obviously the entire newspaper industry is struggling to find a business formula that works. Once iconic newspaper companies such as New York Times Co. and Washington Post Co. as well as other newspaper titans McClatchy Co. and Tribune Corp. also see their fortunes shrinking.
A possible loss of The Star-Ledger would provide some opportunity to its peers. Will the smaller, local Jersey newspapers such as The Bergen Record look to expand on the Ledger's former territory? Or would The New York Times, Daily News or New York Post cross the Hudson to provide more coverage? Ultimately, a Star-Ledger death may only keep others away. After all, who wants to incur more red ink from an industry that has shown very little growth potential? - Gerald Magpily
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