Credit Rater Fitch Sees No Green Shoots in Newspaper Industry

By: Mark Fitzgerald Newspaper revenue will continue to shrink for the rest of the year and into 2010, Fitch Ratings says in its second annual "Credit Encyclo-Media" report on media and entertainment businesses, issued Wednesday.

"Much of the business risk for the media sector is likely to continue to be concentrated within the newspaper sector," the report states. "Fitch expects newspaper industry revenue growth to be negative in 2009 and 2010 off increasingly easier comparable periods."

Fitch's analysis of newspapers' principal problems are familiar: ad prices and volumes will be under pressure within each of the four main revenue streams of classified, local and national advertising, as well as circulation.

Newspapers are the most troubled part of a troubled media and entertainment sector that has been defaulting on debt at a higher rate than U.S. businesses in general. The report notes that since its last survey of the sector, three companies, including Tribune Co., have filed for bankruptcy. (Though many more newspaper companies have filed for bankruptcy, Fitch includes in its report only a small number of companies that are largely devoted to newspaper publishing.)

More data from the Fitch report is posted on E&P's business-oriented Fitz & Jen blog.


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