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That it all happened in the blink of an eye is what makes the current quandary so head-spinning. A number publications have already pulled the plug, from digital startup The Outline to various local newspapers around the country, most recently three titles that are owned by the parent company of the Los Angeles Times. Announcements of salary reductions, furloughs, layoffs, and other belt-tightening measures have been coming so fast it’s hard to keep track of them all. Last week alone brought cuts to, among others, the L.A. Times, Vox Media, the Hollywood Reporter, ESPN, Fortune, and Condé Nast, which owns Vanity Fair, not to mention NPR’s dire warning that it is facing a budget deficit as high as $45 million. This week so far: Meredith Corp and Tribune Publishing. Across the Atlantic, downsizing is likewise taking hold at places like News UK and The Guardian. The New York Times has been keeping a running tally, and as of Tuesday, it was reporting that some “33,000 workers at news companies in the U.S. have been laid off, been furloughed or had their pay reduced.”
In a memo to staff on Friday announcing a variety of austerity moves, Vox Media CEO Jim Bankoff hit upon the unprecedented-ness of it all: “Because we operate in such a tumultuous industry, it’s tempting to lump in the economic carnage resulting from the COVID-19 pandemic with other events or crises that we’ve seen in the media business. This is clearly very different: while the severity of the pandemic’s effect varies across institutions and individual lives, it is universal, and no one is immune from its impact.”
Jim VandeHei, the CEO of Axios, offered a similar take. “For huge swaths of media, it’s not hyperbole to say it’s cataclysmic, worse than 2008,” he told me. “If you rely on retail and consumer ads, home delivery, ad exchanges, affiliate revenue, or physical events, you are screwed, at least for the short term. This is devastating to local news and traditional newspapers in particular—they started with several shrinking business lines that in some cases are literally evaporating before their eyes.” Any bright spots? “The big players, like the New York Times and Washington Post, and niche players like Axios, will be fine longterm,” VandeHei continued. “But all of us do physical events, which are dead until further notice, and rely on some advertisers who are pulling back until the economic damage is more clearly known. All of this sucks, broadly speaking, for the media and nation because the need and value of news you can trust has never been higher.”
Even at those well-positioned big players that VandeHei mentioned, like the Times and the Post, which are insulated by the massive digital subscription businesses they’ve developed in recent years, it’s not as if the mood is particularly upbeat. “It’s tough to see how the industry is being hammered, particularly when people need quality journalism more than ever,” said Meredith Kopit Levien, the Times’ chief operating officer.
Still, it’s not impossible to find optimism even in these most despairing of times. “You do wonder if certain types of media will come back from this,” said Nicholas Carlson, editor in chief of Business Insider, which also has a strong subscription component. (The company doesn’t anticipate any COVID-related cuts, but it won’t be able to hire as many people as it was planning to in 2020.) “We’ve been saying for 20 years that newspapers are dying, and now it looks like this could really be it, and that’s horrible. But people still need journalism, and the model for it is being developed. If people want or need information that they can’t get anywhere else, they will subscribe to what you’re doing. For those who are well capitalized and have diverse business models and are not too cost heavy, this is an environment for them to really fortify themselves and even flourish when things go back to normal.”
Business Insider, Carlson pointed out, got its start amid the 2008 financial crash. “Great companies are founded in these moments,” he said, “so I’m optimistic that there’s capital that can be moved into trying to figure that out.”
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