More Goodwill Write-downs; Debt Burden Ties Owners’ Hands
Goodwill is becoming harder and harder to find in the newspaper business these days and recent financial moves tend to confirm that. Editor & Publisher reports that Belo and McClatchy collectively took more than $1.75B in goodwill write-downs at the end of the first quarter to recognize the lost value of their media properties. The piece goes on to look at other goodwill write-downs in recent history, including the New York Times Co.’s recognition that more than half the value of its New England properties had declined since 1993. Goodwill is just a paper loss, but it reflects a business’s recognition that the value of an asset has declined and probably won’t come back in the foreseeable future.
Follow the Media looks at the increasingly crushing debt burden that newspapers face. As media companies went deeply into hock to finance big consolidation ventures in the 1990s, they saddles themselves with payment terms that now force them to do everything in their means just to service the debt load. The piece concludes with a description of the spiral into which the industry has fallen: “Print newspapers will continue to cut expenses, some of which we the readers will notice and some we won’t, their editorial and advertising product will continue to deteriorate, and eventually we readers will reach the point where we decide we are no longer getting our money’s worth and we all go elsewhere. The gamble for publishers is just how much deterioration we will accept before we truly abandon ship?”
Demographic Trends Headed in Wrong Direction
Another sign that newspapers have all the demographic trends going against them: MediaPost cites a comScore report that found that “18- to-24-year-olds were 38% more likely than the general population not to read a newspaper in a typical week. The 35-44 cohort were 9% more likely not to read one. The flip comes with the 45-54 cohort, which were 24% more likely than the general population to read one.” The good news is that young people who care about news are big users of newspaper websites. The bad news is that online revenues are less than 10% of sales at most big newspapers.
Zell Gets Pissed
Is Sam Zell losing it? He’s recently been quoted saying that he never expected an 18% revenue decline in one year and he’s become increasingly belligerent in his meetings with employees recently. BNet has more. By the way, have you seen the video of Zell telling one of his reporter employees, “F**k you?” It’s here on YouTube. He mutters the comment under his breath at the end of a response to an Orlando Sentinel’s reporter’s pointed question about how newspapers can thrive by giving readers what they want when all readers want is stories about puppy dogs.
And Finally…
Maybe it’s time to get while the getting is good? Romenesko documents a trio of retirements of veteran journalists, including:
- Palm Beach Post Publisher Tom Giuffrida;
- Austin American-Statesman Editor Rich Oppel; and
- Gannett Newspaper Division chief Sue Clark-Johnson.
And Executive Editor Joel Rawson of The Providence Journal, who announced the previous week that he’ll retire soon, says the industry’s problems are not driving him out. He’s still got his health and he wants to spend more time flying, he says. Having cut his staff by 40% over the last 19 years has nothing to do with it.
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