Now more than ever news leaders need to understand the financial planning process and how to do it as efficiently and effectively as possible. Being able to compare financial data with other newspapers of similar size helps news leaders “manage their operation and optimize their performance,” says Tom Slaughter, executive director of Inland Press Association.
To assist newspapers with the planning process, Inland Press Association, in partnership with Mather Economics and the Reynolds Journalism Institute, is overhauling its comprehensive National Cost and Revenue Study to make it more modern and user-friendly.
The study, which has been in existence since the 1920s, provides data gathered from newspapers annually. The data includes revenues (advertising, circulation) and expenditures (cost of paper, labor). Inland aggregates and segregates the information based on circulation and revenue classes.
“This enables the newspapers of a similar size to get a sense of whether or not their revenue or expenses in a particular area is about what it is for a group their size or better or worse,” said Slaughter.
However, according to Slaughter, the study is in need of improvements to make the data more useful to newspapers.
The cost and revenue study requires newspapers to submit quite a bit of data through a questionnaire. This can be a time consuming process for publishers. Over the years, staff has added questions but hasn’t always been as faithful to remove outdated information from the study that might not be as critical to newspapers as it was five or 10 years ago.
“In the past there has been a long, long questionnaire where you fill out all of these numbers in this Excel sheet and a lot of the categories may not fit with how you keep track of your profits and loss,” said Esther Thorson, director of research at RJI. “Somebody at the newspaper would have to fill in those numbers. It could take them two weeks to do it.”
The study is only done once a year but newspapers’ financial planning cycles are often shorter.
“The business models that newspapers operate under today are dramatically different than they were 10 years ago or even five years ago,” said Slaughter. “A once a year snapshot isn’t as valuable, we think, as it might have been 10 or certainly 20 years ago.”
The project goals are to make data extraction and submission simpler. It is also the Inland’s goal to collect information on a more aggressive schedule so it provides multiple snapshots of data rather than just an annual shapshot, said Slaughter.
Researchers, including Thorson, from RJI had already been using data from the study in some of their own research when they learned that Mather Economics was working with Inland to improve the study.
“A light bulb came on and we said, ‘hey, why don’t we all work on this together,’” said Slaughter.
This summer the partners began talking to newspaper companies about how they keep track of costs and revenues, what new data variables they’re using and what variables they might have stopped using. They will use this information to analyze and evaluate what should be included in the study to make sure newspapers have the most relevant and current data.
“We’re going to be doing an enormous amount of research with newspaper executives to basically take their temperature on ‘if you could start with a blank sheet of paper, what kind of information would you like to see that would allow you to manage your newspaper better?’” said Slaughter.
Thorson said RJI researchers will also be identifying new sources of revenues for newspapers, as well as determining what business functions are corporate and what functions are left to the responsibility of the individual newspapers.
Five focus groups will review the data to make sure nothing in the revamped study is being overlooked.
Slaughter said they were attracted to partnering with RJI for a couple of reasons.
“They’re familiar with the study and we’ve worked with them on the study before,” said Slaughter. “We know that they do a lot of sophisticated analysis and research. That capability we thought was important as we moved along with this project.”
Slaughter hopes to have the research completed and have the data engine built to aggregate the new set of information completed by November or December.