Pruitt Upbeat on McClatchy: Debt Cut, All Papers Profitable

By: Jennifer Saba

McClatchy CEO Gary Pruitt delivered an upbeat, if short, presentation to analysts and investors this morning during the UBS Global Media and Communications Conference in New York.

Forgoing the McClatchy tradition of opening the presentation with a song, Pruitt took a defiant tone and said that advertising revenue is “finally, finally, improving,” that all 30 of its newspapers are profitable and that McClatchy expects to maintain, if not grow, cash flow in 2010.

“Our expectations are better than analysts’ expectations. Who is right?” Pruitt asked.

He emphasized McClatchy’s growth in online ad revenue and how it is becoming a more integral part of total revenue. In November, online ad revenue was up more than 16% and in 2009, projected online revenue is expected to reach $180 million, representing more than 16% of total ad revenue.

In Q3, slightly more than 44% of online ad revenue is online-only. McClatchy, Pruitt said, leads the Yahoo newspaper partners in sales.

That said, the company is still facing significant challenges. McClatchy is expected to trim expenses in the “high 20” percentage range next year. McClatchy is looking to outsource more production, financial and back-office functions — it already outsources the printing of eight of its papers — and to continue partnering with other news organizations, increasing shared editorial content.

McClatchy has wiped out some $1.4 billion in debt over the last four years, mostly acquired to take on its blockbuster acquisition of Knight Ridder in 2006.

Pruitt signaled he was confident that McClatchy will see immediate results from even the slightest uptick in the economy. He had some parting words for critics who said McCatchy and some of its peers would be bankrupt by now: “They were wrong.”

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