We recently wrote a blog entitled “Why We Must Not Let Newspapers and Magazines Fail,” and here’s another reason why: if they go under, so does a big piece of the paper industry. With newspapers going belly-up faster than bass in a poisoned pond, newsprint consumption is plummeting. In 2008 consumption dropped 16% among daily newspapers, and that was before the bankruptcies, closings or death-throes of papers in New York, Chicago, Los Angeles, Philadelphia, Denver and other major venues wracked the newsprint industry in the opening months of 2009.

Tree huggers may take some satisfaction in this news, but it spells more economic woes piled onto the ones already bowing the shoulders of magazine, newspaper and book publishers. AbitibiBowater, a gigantic newsprint supplier that seems to have more syllables than assets, is desperately seeking refinancing of its debt , otherwise it too faces shuttering. Its stock has dropped by more than 90% and is currently worth about half a buck per share. This according to Michael J. de la Merced and Geraldine Fabrikant of the New York Times, a newspaper with troubles of its own.

Rescuing AbitibiBowater should be about as easy as pronouncing it three times fast, but as of this writing management is scrambling to reduce the pressure.

RC