By: MediaNews Group Inc. swung to a loss in its first fiscal quarter ended Sept. 30 as the newspaper company reported a tough advertising climate, both in print and online.
Also Wednesday, MediaNews and The Hearst Corp. said they had jointly purchased 80 percent of the online classified-advertising software provider Kaango for about $20 million.
Privately owned MediaNews, whose newspapers include The Denver Post, San Jose Mercury News and The Detroit News, said it lost $1.01 million in the most recent quarter. It reported a profit of $13.3 million in the same quarter a year earlier.
Revenue was $334.7 million, up from $295.3 million a year ago, thanks to acquisitions in fiscal 2007 that added the San Jose Mercury News, Contra Costa Times, The Monterey County Herald and St. Paul Pioneer Press to its portfolio of newspapers that MediaNews either owns or manages.
Excluding the transactions, advertising revenue fell 9.3 percent in the quarter, mostly due to dropping volume from retail, national and classified advertisers, the company said. It said revenue from Internet operations remained relatively flat.
The transactions also led to a $12.6 million boost in circulation revenue. Excluding those deals, circulation revenue fell 2.9 percent in the quarter as newspapers held on to subscribers with heavy home delivery discounts. MediaNews has now raised home delivery prices at most of its newspapers.
MediaNews said newsprint prices have fallen 8 percent to $558 per metric ton since the same period last year. It also has been using less newsprint, with volume falling about 23 percent in the quarter from a year ago.
MediaNews operates 57 daily newspapers in 12 states. Its vice chairman and CEO, W. Dean Singleton, is chairman of The Associated Press, a not-for-profit cooperative owned by its member news organizations.
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