Study results unlikely to affect investments

In recent years, most calls from journalists to "invest more in the newsroom" and "pay for editorial quality" have elicited scoffs from media owners.

In recent years, most calls from journalists to "invest more in the newsroom" and "pay for editorial quality" have elicited scoffs from media owners.

The money men have tended to view such requests as self-serving wishes by entrenched, old-media dinosaurs who loathed the new workload brought on by the Internet and failed to understand the economics of the business. At newspapers in particular, newsroom cuts - not increased investments - have been the order of the day.

But now, a study from the University of Missouri is lending some empirical weight to the old argument that news quality equals good business performance. Professors in its journalism school analyzed a decade's worth of data to examine how investments in advertising, marketing, circulation, and editorial affected newspapers' business performance. The findings were a notch on the belt of believers in journalistic excellence.

"Investments in news quality not only impact subscription sales directly, but also ad revenues via subscriptions indirectly. This is especially true for smaller-circulation newspapers whose newsrooms and editorial departments tend to be understaffed and overworked," the study notes. "Consequently, our answer to the question, 'Is good news quality good business?' is a resounding, 'Yes.'"

Such analytic confirmation of what newsroom veterans have said for years might be expected to bring joy to long-suffering journalists and their boosters. But those who follow the industry closely, while pleased, are cautious about trumpeting the study as a turnaround point in newspapers' long slide into Wall Street's dustbin.

"I am not hopeful that anyone will listen. With a few exceptions, this is not a creative or risk-taking industry," says Arlene Morgan, a former assistant managing editor at The Philadelphia Inquirer who is now an associate dean in Columbia University's journalism school. "Ultimately, Wall Street is the primary customer, not the reader. I have seen no evidence that Wall Street supports investment in the content as a way to build value. I think that short-term and short-sighted thinking is the rule."

Considering that the industry's widespread round of layoffs over the past few years has hardly been successful in boosting stock prices, the pessimism may be well placed. But even some Wall Street analysts have said the latest newsroom cuts have gone too far and warned that eroding quality could cause even further losses to the Internet. So might it not be time to give investment in the newsroom a shot? After all, who knows how to make a successful newspaper better than journalists themselves?

That open-minded attitude toward expensive experimentation is a pipe dream, newsroom advocates note. Brian Steffens, executive director of the National Newspaper Association and a professor at Missouri's journalism school, says the study's findings echo his own long-held beliefs. But he adds that Wall Street is already cutting editorial jobs in anticipation of future declines, which may become a self-fulfilling prophecy.

"It's 'growth' and how that relates to outside investors that's put us in this bugaboo, not lack of profitability," Steffens says. "When [famed investigative journalists Donald] Bartlett and [James] Steele can't stay employed, that should ring a bell for us."

Indeed, although the study's findings would seem to indicate that investing in pricey long-form and investigative journalism would ultimately pay off, the cuts have now gone so far that most experts aren't optimistic for a sudden reversal.

"The disinvestment [in editorial quality] will continue," states Jay Rosen, an New York University journalism professor and media critic. "Investigative reporting has never been a 'key element' in the business the way business minds see it. The prospect is bleak for that kind of reporting being supported by metropolitan newspapers."

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