By: Lucia Moses
For many newspapers, particularly those in big markets, this year is starting out by looking a lot like last year. A turnaround in the advertising recession remained out of clear sight as publicly held newspaper companies began reporting fourth-quarter and full-year earnings last week, although some said ad declines were beginning to ease in the first few weeks of the year.
Dow Jones & Co. Inc., whose reliance on national and financial advertising has made it especially vulnerable, said it expects linage at its flagship, The Wall Street Journal, to be down 20% to 30% in the first quarter following a 41.5% drop in the fourth quarter last year.
Knight Ridder posted a profit in its last quarter, albeit more reflective of charges in the year-ago period than of a strong financial picture. Ad revenue declined 11.8% in the fourth quarter from the same period a year ago (excluding an extra week in the year-ago quarter for easier comparisons), and the No. 2 U.S. newspaper company sees no upturn in January. Its papers in Philadelphia and San Jose, Calif., accounted for the biggest part of the decline.
“If ad revenue persists at this level, it will make first-quarter 2002 comparisons particularly difficult,” Gary R. Effren, senior vice president and chief financial officer, said in a statement.
The E.W. Scripps Co. expects newspaper revenue to be down between 2% and 4% in the first quarter after declining 8.8% in the previous quarter (treating the Denver Rocky Mountain News as if its joint operating agreement was in place both quarters).
Ad revenue for the first few weeks of the year is “so far a little better, but we’re very early to be speculating,” said Alan M. Horton, Scripps’ senior vice president for newspapers, during a conference call with analysts.
Economists expect the economy to improve later this year, and year-over-year comparisons for newspapers should be easier in the second half because 2001 got worse with time.
Still, the unlikelihood of a quick turnaround means companies aren’t done cutting costs. The Tribune Co. and Scripps said they expected to make more staff cuts this year, while Dow Jones is looking elsewhere to do its cost cutting.