This is hardly a newsflash, but newspapers are marching to their ultimate doom. And when I say newspapers, I mean literal papers….black ink on cheap paper, printed and dropped at your door daily. Of course, there’s less and less ‘printing and dropping’ every year.

You already know why. In fact, the fact that you’re reading this now is the problem. The internet is fast, free, easy, and doesn’t leave smudges all over your fingers.

This is hardly a Eureka! moment for any of us, so why bother talking about the death of the newspaper industry? There are those who think the industry can be revived. Mostly it’s the owners of newspapers thinking that way, and I suspect it’s based more on hope than demand for their product. That’s their problem though. My concern is for investors who may be swayed to agree with them. Don’t jump on a sinking ship.

As evidence of the idea, I submit to you EW Scripps’ (SSP) recent decision to spin-off their television and internet business from the newspaper business. In legal terms that’s how it’s happening; in reality I think it was a decision designed to separate the winner from the loser. Scripps admitted they’re looking for yet another decline in newspaper revenue, but also anticipating top-line growth for their broadcasting and web divisions.

The question is, why? There’s no answer from them, but I’ll submit one possibility…newspapers just ain’t worth it anymore. Their stocks are declining because revenues and earnings are declining.

On the chart below I’ve plotted the stock’s of the four major newspaper companies…Washington Post (WPO), New York Times (NYT), McClatchy (MNI), and Gannett (GCI). Clearly their pain isn’t something new - they’ve been sinking since 2004.

Immediately under each stock chart I’ve plotted their quarterly earnings-per-share results (red). The stocks started struggling long ago, while earnings started to weaken shortly after the stocks. Yes, there’s still some bottom line, but you see the trend in place.

If you’re betting on newspapers, the bet you’re essentially making is that those earnings lines are going to turn around and start moving higher. My question to anybody who thinks that’s going to happen is this….why? What can print newspapers do a year from now they couldn’t do a year ago? The answer is, nothing. For the same reason jets replaced trains, the internet is replacing newspapers - Speed and cost. That’s why MySpace.com sold for billions.

These stocks are nothing but liabilities in the internet age. If you don’t believe me, when’s the last time you took a train on a long-distance (non-commute) trip? At least Scripps saw the writing on the wall.

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