Rough Start in ’07: 5 Newspaper Companies Report Slides

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By: E&P Staff

Several newspaper companies today reported big hits to their revenues in early 2007.

Tribune Co. said today its publishing revenues were off 5.1% for February with circulation revenue off 7% (see separate story).

Advertising revenue at The New York Times Co. plummeted 6% in February due to weakness at its flagship and regional papers, the company announced yesterday. Total revenue for the company was down 3.6%.

Hammered by double-digit decreases in automotive, real estate and help-wanted classified ad revenues, Sacramento, Calif.-based The McClatchy Co. reported Wednesday that, on a same-property basis ad revenues in February fell 5.2%, and total revenues dropped 5.1%.

Total classified on a pro-forma basis — counting results from the 20 dailies acquired in the Knight Ridder Inc. acquisition and excluding the recently sold Minneapolis Star Tribune — fell 12.4% to $59.4 million.

Newspaper automotive classified plunged 15.4%; real estate dropped 16.3%; and help-wanted fell 11.6%.

McClatchy said Internet advertising, while up 1% for the month and 7.6% year-to-date, was affected by the new affiliate agreement with CareerBuilder for online employment advertising.

“This agreement is helping to grow online employment revenues at the legacy McClatchy newspapers, (which was) up 40.7% in February and 31.0% year-to-date in this category, and is an attractive agreement for these papers,” McClatchy CFO Pat Talamantes said in a statement. “However, under the new affiliate agreement selected products are no longer available to be sold by the 20 acquired Knight Ridder newspapers, which is depressing their Internet revenues. We will begin cycling through this change in August 2007. We believe our underlying online advertising is quite healthy, as represented by our February growth of 19.8% in online advertising excluding the employment category.”

Ad revenues by market were down pretty much across the board.

Meanwhile, newspaper publisher Media General Inc. said Wednesday it expects to report a first-quarter loss on a weaker-than-expected start to the year for its publishing and broadcast businesses and loss on its investment in a recycled newsprint manufacturer.

The publisher of the Tampa Tribune, Richmond Times-Dispatch, and Winston-Salem Journal forecasts a quarterly loss between 26 cents to 30 cents per share. Analysts polled by Thomson Financial were looking for a profit of 20 cents per share.

The company said revenue from its publishing division fell 4.2 percent in February, reflecting a decline in national and classified advertising. Broadcast revenue dropped 2.7 percent, excluding revenue from stations acquired last June.

Declining newsprint prices had both a positive and negative effect on results.

“While lower newsprint prices have enabled the publishing division to hold expenses almost even with last year, we expect a loss of more than $2 million from our one-third interest in SP Newsprint in the first quarter, with continued downward pressure expected as the year unfolds,” President and Chief Executive Marshall N. Morton said in a statement.

Publisher and broadcaster Journal Communications Inc. said Wednesday that total February revenues fell 3.5 percent on weakness in publishing and broadcasting and the absence of Olympic revenue.

Sales at the daily newspaper and community newspaper and shopper segment declined last month to $22.9 million from $24 million in the year-ago period.

Monthly advertising revenue slid 4.6 percent to $32.6 million from $34.2 million.



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