Healthiest daily newspapers are the smallest

Smaller newspapers are generally doing better than those in metropolitan areas, but are "also feeling the effects of the economic downturn and Internet competition," writes Eric Sass of MediaPost, reporting on a study by the Inland Press Association. "The study's findings temper the optimistic view evinced by many publishers in smaller markets, who take pains to distinguish their properties from the big metro dailies." Sass makes a point to remember: "In the future, any discussion of the fortunes of small newspapers will have to specify how small."

The biggest profit decline was among papers with circulations of 25,001 to 50,000, "one of the segments that was supposed to be faring better than the big metro dailies," Sass writes. "If this trend continues, bankruptcy and sale or closure could follow for scores of newspapers, as the plague afflicting big metro dailies infects smaller markets. Their fate will largely be determined by indebtedness, which has proved the bane of big publishers, especially with the global credit crunch."

But the study also showed that the smallest daily papers, those with circulations of 15,000 or less, were bucking the trend. That category "showed a 2.5 percent growth in gross revenues during the five-year period ending in 2008," Adolfo Mendez writes for Inland. And despite "all the widespread coverage of newsroom layoffs and cutbacks, the Inland study found that the majority of participating papers with less than 50,000 circulation reported an increase in news and editorial expenses over the five-year period." (Read more)

The findings are based on data from more than 160 newspapers that participated in the organization's annual National Cost & Revenue Study for Daily Newspapers. For a copy of the full report, contact Tom Mather, Inland's financial studies director, at 847-795-0380.