In his 2004 book The Vanishing Newspaper: Saving Journalism in the Information Age, Philip Meyer imagined “the final stages” of a “squeeze scenario” by a newspaper owner who wanted to exit the business but didn’t want to actually sell the title: He would start charging more for his newspaper and delivering less, commencing the “slow liquidation” of his property. This slow liquidation would not be immediately apparent to observers, Meyer wrote, because the asset “being converted to cash” would be “goodwill” – the newspaper’s standing in the community and the habit of advertisers and subscribers of giving it money.

One reason an owner would want to extract a newspaper’s goodwill value before selling its physical assets – its real estate, presses, computers, trucks, paper, ink, etc. – is that traditionally, goodwill is where most of a newspaper’s value has resided. When Meyer asked two newspaper appraisers to estimate how much of a newspaper’s value was locked up in goodwill versus physical assets, both gave him the same answer: 80 percent goodwill, 20 percent physical assets.

Selling goodwill is a dangerous strategy because once sold, it’s difficult to reacquire. But a newspaper owner who feels trapped by losses and can’t find a new owner at what he considers a fair price may feel he has no alternative but to cheapen his newspaper bit-by-bit, month-by-month. He may explain the goodwill sell-off as temporary economizing to be reversed once business conditions improve, or even as the exploration of a new business model. Sellers of newspaper goodwill might protest that the financial losses they’re absorbing constitute a serious investment in the newspaper’s future, that they’re harvesting nothing. But don’t be fooled. If you’re winding your company down with no strategy to wind it up, you’re burning goodwill even if you don’t acknowledge it.

It’s hard to blame newspaper owners for winding their print operations down, even if you devour four dailies a day, which I do. All of the industry’s vital signs are pointing south. Profit margins are way down, its stock prices have collapsed, daily circulation has fallen about 30 percent over the last 20 years, the percentage of adults regularly reading newspapers has been falling steadily since 1999 (especially among younger adults), and advertising revenue, which stood at $50 billion in real terms in 1984, fell to $23.9 billion in 2011. The corresponding decline in newspaper valuation is illustrated by three recent sales of the Philadelphia Inquirer and Daily News. In 2006, the papers went for $515 million. In 2010, they commanded $139 million. Just two months ago they sold for $55 million.

Of course newspaper owners aren’t the only heavies in the story. “The owner didn’t decide to shrink the paper,” said Detroit News reporter Charlie LeDuff in 2008 as the Detroit papers decreased home delivery from seven days to three. “The reader decided to shrink the paper.”