According to Los Angeles Times, a cost-cutting wave of consolidation of rival newspapers within regional markets may be under way.
The possible sale of Freedom Communications, parent of the Orange County Register, is one scenario where slashing expenses via consolidation appears to be a central element of the offering.
“This is all about geographic clustering,” said Ken Doctor, who writes a blog about the media industry at Newsonomics.com. “Any opportunity to combine companies, they’re going to take advantage of.”
Although consolidation may be a good way to cut expenses without further chopping news staffs, newspapers in the longer run must figure out how to stop the exodus of advertisers, said Edward Atorino, an analyst who follows the industry at investment bank Benchmark Co. in New York.
Combining operations is “a short-term, stopgap measure,” he said. “The real answer is advertising has got to stop going down.”
