Newspapers Shrink, But Investors Line Up

Mason--Fewer Readers, More Buyers
Mason--Fewer Readers, More Buyers

At the rate newspaper circulation is falling, your paperboy could be out of a job soon, CBS News correspondent Anthony Mason reports.

So why did public relations executive Brian Tierney pay half a billion dollars this summer to buy the Philadelphia Inquirer and Daily News, even though both papers have steadily been losing readers and ads to the Internet?

"We didn't buy it to cut it. We didn't buy it to manage the decline of an enterprise," Tierney said at a news conference.

Tierney's not alone. Wall Street may have soured on the newspaper business, but multimillionaires seem to be lining up at the chance to become newspaper barons.

Former General Electric chief Jack Welch is interested in buying the Boston Globe. Media mogul David Geffen is looking at the Los Angeles Times. Billionaires Eli Broad and Ron Burkle have made an offer for the L.A. Times and the Chicago Tribune.

What's the attraction?

"It's kind of like owning a sports team," says Phillip Mayer, author of "The Vanishing Newspaper." "A lot of owners aren't in it for the money. They're in it for the best seats in the stadium — and for a newspaper owner, it's sort of the best seat to what's going on in that town."

But across the country, circulation has been in freefall. In just the past six months, the L.A. Times lost 8 percent of its readers. The Inquirer lost more than 7 percent, and the Globe lost more than 6 percent.

"The last few months have been worse than anybody thought it was going to be," Tierney says

In his book, Mayer charts the steep circulation downfall and sees a vanishing point in 2043.

"Because if you extend the line on the chart the readership disappears," he says. "And without readers you can't have newspapers."

In Philadelphia, Tierney plans to invest more in the Inquirer. He doesn't think newspapers are dinosaurs. "I think papers — newspapers — are the past," he says.

Now, he says, they need to deliver news in print, online and over the phone. But with the latest erosion in readers, Tierney has told his employees that more job cuts could be coming.

"There's a business challenge, so nobody's doing the happy dance around here," Tierney says. "We got a lot of work to do."

If newspapers don't enter the new era, they could be writing their own obituaries.