News about what is hurting the newspaper business, from advertising downturns to the global economy to readers migrating from print to the Web are everywhere, but what is talked about less is the topic of debt. And debt, the Nieman Journalism Lab points out, is at the root of the industry's problem.

Sure, the above problems are certainly doing damage, but "acquisitions and corporate financing have created the conditions that led to much of the pain (newspaper companies) have inflicted on the papers they own," the Nieman Lab, a Harvard University project, contends.

"When the U.S. economy was strong, these acquisitions no doubt seemed like a slam-dunk. Despite declines in readership and some movement by advertisers to embrace the Web, many newspapers continued to spin off healthy amounts of cash as recently as a year or two ago, and many corporate chieftains including (Tribune Co. CEO Sam) Zell saw them as a no-brainer kind of acquisition. As the economy has weakened and advertising in particular has declined, however, newspaper owners have found it harder to meet their debt obligations. That doesn't mean their papers aren't healthy, just that they aren't profitable enough to make the payments on all that debt," the Nieman Journalism Lab states.

In December, Alan Mutter, a newspaper veteran and Silicon Valley insider, gave the example of American newspaper company Lee Enterprises. In 2005, the company's stock was worth US$1.5 billion. At that time, it borrowed nearly the same amount to buy the Pulitzer newspaper group. Lee's shares, as of December 2008, were worth only $13.5 million, Mutter wrote in his Newsosaur blog.

Between 2005 and 2007, too many newspapers borrowed too much money "to fund ambitious acquisitions," Mutter states. Had the business continued to boom, and the economy had stayed strong, "the executives who engineered these transactions would look like heroes today. But that's not how things worked out."