Better Make That A Double; It’s Earnings Time
Today’s lead factoid: The American Society of Newspaper Editors (ASNE) says the number of U.S. newsroom journalists shrank to its lowest level since 1984 after total cutbacks of 2,900 in 2007. Update: Newsosaur Alan Mutter says this survey is a load of hooey.
In this week’s news, earnings season is upon us, and investors will be watching nervously as Media General and the New York Times Co. kick off what is likely to be a gruesome round of financial reports. Reuters says Media General revenue could fall 10.6% and lose money. The revenue slide at the times is expected to be a more modest 3.5%.
The news from Journal Register Co. could be worse than that. The floundering chain is being delisted by the New York Stock Exchange this week, which is hardly surprising given that its stock is off more than 99%. The company has hired an investment banker to explore it options. What a rapid fall from grace. Your obedient editor actually owned a few shares of this catastrophe two years ago when one of the leading money magazines called it a sleeper. Today, it looks like sleep of a permanent variety is a more likely possibility.
Alan Mutter writes that JRC was actually a model of expense management under the reign of CEO Robert Jelenic, but the disasterous acquisition of a chain of newspapers in the Detroit area saddled the company with a debt burden that may now pull it under. Some of Mutter’s stories about Jelenic’s obsession with expense reduction are amusing. What’s not amusing is the outlook: with debt at seven times trailing operating earnings and a business rooted in declining markets, it looks unlikely that JRC can successfully pull out of this tailspin.
Rate of Decline Quickens In Seattle
How bad is the newspaper business in Seattle? Despite owning a legally sanctioned near-monopoly, the Seattle Times and Seattle Post-Intelligencer have seen revenues drop more than 25% since 2000. What’s potentially worse is that online revenues are shrinking, too. No doubt the 2000 figures were bolstered by recruitment advertising revenue during the tech stock bubble, but the current year-to-year declines are outstripping industry averages. The fact that the company has made two major belt-tightening moves in just four months indicates that the shrinkage of its business is racing ahead of its own forecasts.
Crosscut Seattle publisher David Brewster has some ideas for rejuvenating the struggling Times. He advises the company to start delivering more products to people’s doorsteps, create an advertising network to sell locally on behalf of national advertisers and find a big partner, among other things.
Good And Bad News In The Numbers
This chart from eMarketer illustrates painfully the obscuring effect of percentages. Online ad sales at U.S. newspapers were up almost 19% in 2007, while print sales were down 9.4%. But the online revenue increase amounts to just $500 million, compared to a $4.4 billion drop in print sales. That means that print contracted eight times as fast as online expanded last year. This trend is ominous. In 2006, the falloff in print sales was only 1.3 times the growth in online sales.
There’s good news, though. Newspapers are doing pretty well in local advertising markets, according to Borrell Associates. Quoting from Media Post: “The survey of 3,000 local Web publishers found that newspaper sites garnered 26.9% of total local online advertising dollars, and also forecast big increases in spending for online video in particular in 2008. Overall, in 2007 newspaper Web sites netted over $2 billion in local online advertising. Thus, according to Borrell, they dwarfed online Yellow Pages sites…” The researcher says the secret is that newspapers are learning to sell better to local advertisers.
And finally…
Los Angeles Daily News Editor Ron Kaye quit 23 years after joining the paper and one month after being forced to lay off nearly 20% of his newsroom staff. “All good things in life come to an end sooner or later, even my love affair with the Daily News,” he wrote. with characteristic bluntness. Noted the E&P writeup: “During his tenure at the Daily News, Kaye became the public face of the newspaper, and his bombastic personality and scathing criticism of Los Angeles City Hall shaped the editorial pages of the paper.”
Romenesko treats us to t-shirts given out at a recent Hartford Courant awards event.
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