[Publisher’s Note ]The Catalog Factor: Why investors should buy newspaper stocks | Harper's Magazine

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[Publisher’s Note]

The Catalog Factor: Why investors should buy newspaper stocks

John R. MacArthur is publisher of Harper’s Magazine and author of the book You Can’t Be President: The Outrageous Barriers to Democracy in America. This column originally appeared in the January 21, 2009 Providence Journal.

Noting the imminent death of newspapers is all the rage, fast becoming one of the reigning clichés of the day. I beg to differ, but not for the self-interested reasons one might imagine. To explain, I’d like to tell a story—a newspaper story.

Nearly 30 years ago, when I was a young reporter on the Chicago Sun-Times, the copy-desk chief was a brilliant and acerbic man named Tom Moffett. Moffett thought that reporters were lazy wimps—he said that the really hard work took place on “the desk”—and he dared me one day at the Billy Goat Tavern (of Saturday Night Live fame) to work for him. Was I man enough? Over my fourth Old Style I insisted I was. The next day my city-desk bosses agreed, and I was loaned to the copy desk for six weeks as a kind of career-broadening internship.

Moffett was right—his sink-or-swim boot camp for copy editing and headline writing was brutal, far more challenging than doing a typical newspaper story. In those days, the Sun-Times and the Chicago Tribune, though morning papers, were fighting a savage circulation war, producing extra editions in the afternoon to capture readers orphaned when the two companies folded their evening papers, the Chicago Daily News and Chicago Today. Thus, the morning shift had to put out an entirely new edition in about 90 minutes, then start over for the next morning’s paper. All told, there were seven editions. Even with new computer technology automatically counting the spacing and length, this wasn’t easy.

Moffett had a decidedly cold demeanor in “the slot” and he was famous for rejecting headlines three and four times until you got it right. Worse was his withering look when you missed some obvious error in a story, for no news went to the composing room without Moffett’s approval, and he took his responsibilities very seriously. I was humbled, and frankly worried that I couldn’t cut it. Reporting and rewrite could be pressured, but the stress on the desk was on an altogether different level—something like being a short-order cook during the lunchtime rush.

One afternoon, about a month into my desk experiment, I was back in “the Goat,” where it always felt like nighttime because of its location, in perpetual shadow, under the elevated section of Michigan Avenue. Moffett was holding court with a group of us—critiquing the day’s paper, handing out praise and scorn in equal measure—when suddenly he made two pronouncements in my direction. First, I had passed his test with my mettle intact: I was capable of being an adequate copy editor. Then, as if anticipating my objection to a life on the desk, he smiled and remarked, “Someone’s got to keep the ads from bumping into each other.”

I laughed uneasily. I had gone into journalism for the romance and, I hoped, to have a political impact. I wanted to be a newspaperman in the mold of my great-uncle, Charles MacArthur (who co-wrote, with Ben Hecht, The Front Page), my father, Roderick, and my brother, Greg: lots of fun, lots of action, and maybe even a foreign assignment. Because of Vietnam and Watergate, I also dreamed of breaking a big, world-beating story, like something from Seymour Hersh or Woodward and Bernstein, that might do some good.

Of course, I knew that a newspaper was a business. But like many members of my generation, I pretentiously imagined that the journalism part of the daily press was inherently more important than the money side, even to the most jaded publisher. Only when I became a publisher myself did I fully understand the facts of business life, although money considerations never killed my sense of romance or my appreciation of the craft of journalism.

Nowadays, with all the doom and gloom, I find myself defending newspapers as moneymaking enterprises, rather than as tribunes of the truth (if only!). I’m at pains to point out to colleagues and customers alike that as a business model print newspapers are just fine. Plenty of them are still making money, just less than they did in the distorted boom years of the ’80s and ’90s when investment bankers and leveraged-buyout sharks discovered the joys of monopoly publishing.

True, shortsighted stock manipulators in search of easy money have (while piling up crushing amounts of debt) starved newsrooms and circulation departments of essential investments that would lead to more readers, ads and eventual profits. And the Internet has certainly seized the attention of many consumers of news, although I don’t see how anyone can stand to stare at a screen long enough to read anything at length. (A computer repairman tells me he craves downtime in the presence of good old tactile paper that permits him to lean back and relax without the buttons and eerie glow.)

But the reading experience is not necessarily what will keep newspapers alive. There’s another, quite prosaic reason that printed publications will survive and thrive, the one that Tom Moffett was alluding to back at the Goat. Ads on paper not only “bump into each other” when there’s no journalism in between, they also bump into readers — and I mean physically. What will save newspapers is the “unavoidability factor” — that no one, no matter how tech- and screen-oriented, can avoid the advertising printed on paper, at least not without unusual effort.

Consider the behavior of ordinary people after the letter carrier comes. Once they’ve collected the mail, including catalogs, junk mail and newspapers, even the most ad-resistant, Web-addicted individuals will glance at some of the printed matter on the way to the garbage can. If the advertising is any good, recipients usually slow down and place certain catalogs, envelopes, magazines or headlined articles aside while throwing the rest away.

Such mail-order companies as Land’s End have learned at great cost that replacing catalogs with the Internet just doesn’t work. Customers may order online, but most of them are responding to a mailing or an ad. No offense to my fellow journalists, but newspapers and magazines are first and foremost effective catalogs, which some people like to read. If the headline or cover line grabs you, there’s a good chance you’ll start turning the pages and bump into the ads. Advertising on the Internet and TV (with Tivo, muting, and zapping), is simply too easy to dodge.

Moreover, advertising itself can be fun to read. During World II, I’m told that American GIs overseas complained about the stripped-down “pony editions” of magazines that didn’t carry advertising. The soldiers wanted to know what was for sale back home.

It won’t be long before advertisers fully recognize the limits of the Internet and the inevitability of paper. If I were an investor, I’d be buying up newspaper stocks while they’re dirt cheap.

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