MediaNews Group Reports Soaring Profits, Helped by Acquisitions

By: E&P Staff MediaNews Group Inc., the nation's fourth-largest newspaper publisher, reported sharply higher profits during the quarter ending Sept. 30, crediting its recent acquisitions.

The Denver-based company reported net income of $13.3 million during the quarter, up from $982,000 from a year earlier. Revenue jumped 50 percent to $295.3 million, up from $196.6 million in 2005, according to a filing with the Securities and Exchange Commission on Tuesday.

Privately held MediaNews owns and operates 54 daily newspapers in 12 states, including The Denver Post, the San Jose Mercury News and others. It also owns a television station in Anchorage, Alaska, and operates radio stations in Texas.

Excluding acquisitions, MediaNews said its ad revenue on a same-newspaper basis decreased 2.3 percent and circulation revenue fell 3.8 percent from the quarter a year ago.

Excluding depreciation and other costs, the company's joint operating agreement in Denver with E.W. Scripps Co., the Cincinnati-based owner of the Rocky Mountain News, generated net income of $1.6 million on $102.3 million in revenue. A year earlier, net income was $3.4 million on revenue of $107 million.

"The results of the Denver JOA were negatively impacted by a soft advertising market combined with higher newsprint prices, increased circulation, promotion and delivery costs and increased employee benefit costs," the filing said.

Earlier this year, MediaNews purchased the Mercury News, the Contra Costa Times and other papers in California for $736.8 million from Sacramento, Calif.-based McClatchy Co.

Earlier this month, the St. Paul (Minn.) Pioneer Press said it will cut the equivalent of 40 full-time positions, or about 5 percent of the staff, through buyouts, layoffs and job eliminations. Knight Ridder sold the Pioneer Press to the Hearst Corp., but it is managed by MediaNews.