The Los Angeles Times, the second-largest city newspaper after The New York Times, reported that “advertising revenue has been nearly eliminated.” It can still rely on its subscription revenue. However, the company said it had cut scores of workers, particularly on the business side of the company. Editors and writers have been sparred for the time being.

The announcement is particularly troubling since the paper is owned by one of the richest men in the country, Patrick Soon-Shiong. He bought the LA Times for $500 million. If he is battling to keep his staff intact, imagine what has happened to the rest of the industry.

The billionaire bought the paper with the plan to reverse what had been flagging fortunes. He promised to add editors and writers to make it among the most prominent and well-regarded news outlets in the country. The process started well has he hired a large number of employees, particularly editors. All signs are that he will reverse that and shrink the operation for the time being.

Soon-Shiong’s pockets dwarf those of the rest on the industry. McClatchy, among the largest paper chains in the country, has already gone bankrupt. Under the current circumstance, it may be hard to find a buyer or a financier that will rescue it. Another large chain, Tribune Publishing Co. (NASDAQ: TPCO), has furloughed workers and cut salaries. It owns the Chicago Tribune and several other large urban newspapers. Its share price has dropped 53% in the past two years. Unlike many other chains, it has no debt and cash on its balance sheet.

Newspapers are among the pillars of American democracy. The LA Times announcement shows just how much the industry is under siege. People worry that the industry will be financially destroyed by the new recession. If the LA Times is deeply damaged, the concern is absolutely warranted.

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