It appears (ahem) that cutting newsroom costs may not be good for the company's bottom line in the long run.

A report from the University of Missouri (Columbia) School of Journalism based on ten years of financial data from news companies found this: "U.S. newspapers that spend more money on their newsrooms will make more money, according to a study released on Wednesday, which questioned the wisdom of the media industry's trend of cutting jobs to save costs," according to Reuters.

So, it turns out that investment in resources (and the resulting increase in quality) produces a positive return on said original investments.

Anyone having an a-ha! moment?

In light of this study, everyone should look at Gannett's upcoming SEC filings and see if their investments in newsrooms (the Gannett information center initiative that started last year) follows this pattern.

There is not much buzz about this study from the blogosphere yet, it seems, from a quick look through Technorati and my Bloglines feeds. ACCPhotos.com points out that Mizzou's journalism school does have a vested interest in helping its graduates find jobs.

Study co-author Esther Thorson, Associate Dean for Graduate Studies and Research and Director of Research for the Reynolds Journalism Institute at Mizzou, said the study will be in the April edition of Journal of Marketing. Until then, it's under wraps.

Suggestion: Print out the article and leave it on your publisher’s and CFO's desks! Do the same with the full study in April.

While we're on the subject of newsrooms and finances: There's a well-timed op-ed in today's Wall Street Journal from Steven Rattner on the "mounting" challenges for newspapers (declining circulation, newsroom cuts, readers spending less time with newspapers, etc.).

"Many journalists -- and having spent the first slice of my career reporting for the New York Times, I still regard myself as one -- would prefer to blame the nasty folks in their corporate offices. By this reckoning, it was the layoffs that degraded the quality that cost the readers that led the advertisers to flee that caused more layoffs and so forth," he writes.

The solution? Non-profit status for newspaper companies might be one. Rattner writes, "If public ownership for newspapers is problematic, then, why not withdraw from the harsh glare of Wall Street altogether?"

On the other hand, this article from Forbes suggests non-profit status is not a cure-all for the newpaper industry's ills.