Costly tariff on Canadian paper hits Nebraska newspapers where it hurts

Nebraska newspapers are feeling the squeeze from a costly tariff imposed by the U.S. Department of Commerce earlier this year on Canadian uncoated groundwood paper, leading to the highest newsprint prices in five years.

A trade war over Canadian newsprint is affecting newspapers large and small across the United States.

Nebraska newspapers are feeling the squeeze from a costly tariff imposed by the U.S. Department of Commerce earlier this year on Canadian uncoated groundwood paper, commonly known as newsprint.

The tariff has led to the highest newsprint prices in five years.

Nebraska Senator Ben Sasse is so concerned about the unnecessary and costly tariffs, he wrote an editorial printed in papers statewide explaining why newsprint tariffs are bad.

“The reality of these tariffs is this: They do not just hurt newspapers as a local business and an employer, but they also hit our communities and they hit you,” Sasse said.

Sasse says local newspapers have a significant place in our history and our society that goes well beyond the economics of running a business. “Newspapers help tell the story of our state,” he said.

“Even though the way we consume media is changing, Nebraska newspapers have long been a fundamental part of our communities,” Sasse said. “It would be tragic for unnecessary tariffs to change that.”

Sasse’s support for local newspapers, lower tariffs, and more trade, pleases Aurora publisher Kurt Johnson. As a former president of the Nebraska Press Association, Johnson says the current situation couldn’t happen at a worse time. He says today newspapers are up against a changing digital media landscape.

“Our whole industry is changing so this tariff issue has just complicated that scenario a great deal,” Johnson said.

Johnson said the tariffs imposed nearly doubled the price of newsprint from a year ago. He had to scramble to buy enough paper to make it through this summer.

“To see it ripple into our industry and just realize what a huge impact it can have in such an immediate time frame is really troubling,” Johnson said.

And, the price increases aren’t just affecting small papers, either.

BH Media Group owns 31 daily and 47 weekly newspapers in 10 states. In Nebraska, BH Media, a Berkshire Hathaway Company, owns six dailies in Omaha, Grand Island, Scottsbluff, North Platte, Kearney, and York.

Terry Kroeger, chief executive officer of BH Media Group, says the additional costs add another test to an already challenging business.

“It’s taken an industry that certainly-- I guess it’s no secret-- we have our share of challenges,” Kroeger said. “As we take care of a wonderful legacy business and while we develop a new digital business, this is just another and makes the hill a little steeper for us.”

That steeper hill hits newspaper publishers right where it hurts: financing newsprint and payroll, the two largest operating expenses.

As co-publisher of the News-Register for the last 18 years, Johnson said he’s had to figure out how to manage a business when the public wants to receive information for free on their phone or another device.

“It’s obviously at a time when our industry as a whole has had a tough time. And digital, online, the way folks get their news has certainly changed over the last 10 years,” Johnson said. “And we’ve tried to change with that. The News-Register, as many papers, has a very active Twitter and Facebook and online e-edition, lots of variables, that add up to what we call digital media to compete in that game.”

Both Kroeger and Johnson say they don’t want to pass the high price of newsprint along to the reader or the advertiser. But, longtime newspaper subscriber Roger Holmes of Lincoln, has already felt the pinch in his wallet.

“Then I looked into it and got a deal with two print editions then the rest online for about half that price, but even that price has gone up,” Holmes said.

As a lifelong newspaper reader, Holmes says he’s noticed fewer pages, less content and reduced editorial, advertising and circulation staffs.

But, Holmes thinks the real problem underlying this tariff issue is a general drop-off in print advertisers.

“My guess is that the price of newsprint, to my mind, is sort of a canard; the problem newspapers have is they don’t have any advertising anymore,” Holmes said. “The fact that newsprint cost more money is too bad, but it’s the lack of advertising that’s killing newspapers.”

While he greatly enjoys sitting down with the printed edition of the newspaper, the cost increases have caused him to adapt his reading habits slightly.

“I read it on a Kindle,” Holmes said. “I really don’t like to read anything on computers, but as far as newspapers go, I’m an old-fashioned guy; I like to read the newspaper; that’s just ingrained in me after having done it for so many years.”

BH Media’s Terry Kroeger says providing content for consumers in many accessible formats is one way the industry is responding to society’s changing tastes for news.

“Well, a lot of our readers, myself included, actually use both. Enjoy reading in print but then also understand the convenience and immediacy of the digital,” Kroeger said. “We think we’re pretty good at both and we’re going to get better.”

So, with six weeks until a congressional hearing on the issue, Johnson says he’ll put his trust in the lobbyists representing Nebraska newspapers.

Still, Johnson says, the best solution to this serious threat is a rollback and refund.

“So the best end result we’re hoping for and I really think it should happen as a matter of common sense is they roll back those tariffs or not enforce them and then refund the money that has been collected during a three-month tenure, during which time it has all been a bit confusing for everyone,” Johnson said.

Confusing to those in the business and to the 600,000 paid subscribers in Nebraska.