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Newspaper Profits

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Submitted By ZoeyLucy9713
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Newspaper Profits American Military University
ECON600

The combined newspaper company would be able to make a profit because the cost of competition is being removed. They would be able to streamline operations and eliminated redundant positions and systems. The reduction in basic staff functions would be substantial because labor is the most expensive part of any business. The lowered competitive market will add profit and the ability for the company to leverage with the consumer to get the highest value possible for their papers. Before the merger they companies were offering advertising space in their papers for a specific price. Assuming that the viewership was the same and the targeted market was the same than the consumer would just place and add with the newspaper company that offered the best value. The two companies were fighting for the advertising dollars and therefore were forced to lower the advertising cost. They were doing this to get people committed to their respective paper in hopes that they would just keep renewing there advertisement without shopping the market. Some people can be lazy and just continue to pay what they were used to paying until something forces them to look at the alternative. I think that they got these people in at a low cost to the consumer but would slowly increase the cost overtime. However, the combined company now is in a position to ensure that those that are buying advertising are paying the full cost for advertising space in the paper. With only one company in town the consumer cannot just go to the other newspaper company and buy an advertisement from them because the cost would be the same. The two newspaper companies are not lowering the cost for advertisements because they are not competing with each other any longer. With them working together they ensure that they are getting the

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