Stop the Press: We're Broke

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These days the worst news the Süddeutsche Zeitung (SZ), Germany's leading subscription national daily, has to report is about its own economic plight. This year the SZ expects to lose €50 million, plans to cut 600 jobs and has canceled whole sections. The only consolation for the Munich-based publication: many of the country's 380 newspapers are in a similar state. Germany's papers enjoyed almost continuous expansion since the end of World War II.

Then, after the stock market decline of 2000, companies slashed advertising. Last year advertising plummeted by 13% and that figure is estimated to drop further this year. For many a paper, downsizing or even closure — as with the weekly Die Woche, which folded in March — is the only solution. Most publications "are losing readers, too," says Thomas Knipp, chief editor of the Düsseldorf-based Handelsblatt. One reason: as unemployment rises, more people try to do without papers. Concentration may be the only way for many of Germany's papers to survive. "There should be more consolidation on the ownership, printing and editorial level," says Adam Bird, vice president of the consultancy Booz Allen Hamilton in Munich.

But a 1975 regulation prevents the merger of newspaper publishers whose annual turnover is higher than €26 million, compared to €511 million for other sectors. "It's paradoxical that a law intended to preserve the diversity of our press may cause small- and medium-sized enterprises to go under," says Hans-Joachim Fuhrmann, a spokesman for the Federal Association of Newspaper Publishers (BDZV). Without hope of a quick advertising pickup, more German news-papers may soon be publishing their own obituaries