If you ever wondered how a newspaper works, books about newspaper wars are worth reading. About 10 years ago in Canada, a new national newspaper was launched and the story is written about in the book Ego and Ink by Chris Cobb, McClelland and Stewart, Toronto, 2004. The paper was launched by Conrad Black partly because he owned other newspapers and wanted to have a marquee paper and for a few years, the paper was the best newspaper in the land. However it was heavily subsidized by the other newspapers in the owner’s chain of newspapers and eventually the competition  revamped their offerings to be better newspapers. Eventually Mr. Black sold to a media baron who believed in the convergence of media properties.It only seems to work when there is a national crisis, the other times it sounds like a good idea and money is invested in it. To show how things change quickly, the idea and the billions of dollars that very reasonable people believed was a good investment in 2000 has turned and very few people would spend money even millions if they believed an area was underserviced in newspapers.

Linking to dividend paying stocks, prior to the internet, newspapers and the companies that owned them were a very good stable investment. The papers enjoyed both influence or access to influence makers, steady profits and a desire by wealthy people to have both. Since the internet, newspapers margins have shrunk as advertising dollars have moved, the competition is tougher every year and fewer people read newspapers. Even though newspapers are still printed (full disclosure – the author has subscriptions to 3 papers and generally reads more than that) and money is made, the margins are getting lower every year and the next generation will be putting less advertising dollars into the papers. From an investment point of view, you would want to invest in the other properties of the company which owns the newspaper and expect a modest profit for the paper.

There are more questions than answers, till the next time – to raising questions.