Measuring the declining investment in journalism

Rick Edmonds, media business analyst at The Poynter Institute, estimates that U.S. newspapers have reduced the amount of money they invest in journalism by about $1.6 billion a year. His methodology is – by his own admission – back-of-the-envelope.

He has essentially calculated the reduction in total revenue of the U.S. newspaper industry over the past few years, and then multiplied this by the average percent of revenue that newspapers spend on their news operations.

The result is $1.6 billion.

According to an the annual survey by the American Society of Newspaper Editors, newsroom employment took a beating in 2008 – down 5,900 positions, or more than 11%. That follows 2,400 newsroom jobs eliminated in 2007.

And the cuts have continued in 2009. Just last week, the New York Times announced 100 newsroom layoffs. According to Papercuts,  a website by graphic designer Erica Smith who began tracking newspaper layoffs in the middle of 2007, nearly 14,000 newspaper jobs have been cut this year. (Her numbers track closely with those reported by ASNE).

Not all of those jobs are from the newsroom. Let’s be conservative and assume that a third of them are jorunalism jobs; that would put this year’s total at about 4,700. Anecdotally, I think it’s higher. But even at 4,700, that would put total newsroom cuts in the last three years at 13,000  – about 1 in 5 newspaper journalists.

What’s the average pay? According to Indeed.com, it’s $35,000 for reporters and $51,000 for editors. What’s behind those number is vague and I wouldn’t take them to the bank. But my guess would have been an average of a bit over $40,000. So let’s just go with that.

At $40,000 per job, plus 18% for benefits, the total savings per job cut is $47,300. Multiplied by 13,000 and you get a total of $614.9 million in permanent cuts from newsroom payrolls in the last 3 years.

So whose number is right, mine or Edmonds? The truth is probably somewhere in the middle. My calculations are strictly meatball, and Edmonds’ blog says essentially the same.

But also consider that these numbers don’t include cuts from magazines or broadcast channels and the real point is clear: There is a lot less journalism going on today than there used to be. And to drive that point home, all you need are the fairly reliable newroom employment figures from ASNE:

Going into 2009, newspapers across the U.S. employed about 46,000 journalists — a number that next year will show up in the low 40s or high 30s.

There are roughly 88,000 municipalities in the United States. Plus state and federal governments. Plus school districts, businesses and sports teams. Not to mention technology, health-care, religion, legitimate causes, social issues, spammers and scammers, and fascinating work in cosmology, physical anthropology and particle physics. And and even ill-behaved starlets and loose-cannon reality TV stars.

Thirty- to forty thousand journalists just isn’t enough.

I don’t know when we’re going to figure out the economic models that allow these watchdogs to get paid for the necessary and under-appreciated work that they do. But it will happen.