KR Q3: San Jose Gains, while Philly Drops

By: E&P Staff Knight Ridder reported Friday that total advertising revenue for Q3 is up 3% to $571.5 million compared to the same quarter last year. Excluding the recently acquired newspapers-The (Boise) Idaho Statesman, The Olympian (Wash.), and The Bellingham (Wash.) Herald - total ad revenue advanced 1.8% to $565 million.

Tony Ridder, CEO of Knight Ridder, said in a statement: "When you strip away the complexities associated with our asset sales and acquisitions, the story of the quarter is relatively simple: Excluding the acquired newspapers, total operating revenue was up 1.1% and costs -- in a stark aberration from our normal pattern -- were up 7% ... That level of cost increase will not be repeated in the fourth quarter."

Though health and pension costs have increased, Ridder said in a statement, "We continue to add people where they can contribute to growth: in core newspaper sales, in online, and in targeted publishing." Three Knight Ridder papers -- the Philadelphia Inquirer, The Daily News in Philadelphia, and the San Jose (Calif.) Mercury News -- announced in September they were cutting their newsrooms by 15%.

For Q3, retail advertising revenue was up 2.2%. National was up 0.9% and classified was up 4.8%. Within the classified category, help wanted was up 16.1%, real estate was up 9.8%, and auto was down 10.0%.

Year to date, total ad revenue advanced 2.7%. Retail rose 2.4%, National dropped 0.4% and classified increased 4.5%. Total ad revenue was up 2.1% in July, 1.2% in August, and, excluding the acquired newspapers, 2.2% in September.

For Q3, St. Paul (Minn.) showed the greatest ad revenue increase of 8.1%. San Jose and Contra Costa (Calif.) followed with an increase of 6.6% each. Miami was up 5.2% and Charlotte (N.C.) was up 3%. Philadelphia was down 4.8% and Kansas City (Mo.) was down 2.9%. Fort Worth (Texas) was flat.

Retail was the strongest in San Jose and St. Paul, up 21.4% and 7.3% respectively. It was up 5.3% in Charlotte, 3.9% in Contra Costa, and 2% in Fort Worth. Philadelphia, Miami, and Kansas City were down 5.5%, 4.6%, and 4.2% respectively.

National advertising was up 16.9% in Contra Costa, 10.3% in Charlotte, 8.9% in St. Paul, 5.8% in San Jose, 3.2% in Fort Worth, and 2.4% in Miami. It was down 10% in Kansas City and 9.9% in Philadelphia.

Within the classified category, employment advertising in the large markets was up 11.9%; in the mid-sized and smaller markets it was up 24.5%. Real estate was up 6.8% in the larger markets; it was up 10.4% in the mid-sized and smaller markets. Auto was down in the double digits across the board.

Circulation revenue, excluding the acquired newspapers, was down 2.3% for Q3 and down 3% year to date.