By: E&P Staff Calling current results "lousy" amid a worsening economy, McClatchy chief Gary Pruitt nevertheless will promise today to narrow revenue declines and streamline operations in 2009.
His statement was released ahead of the annual aUBS media conference in New York.
"We are all aware of just how difficult this year has been for the newspaper industry," Pruitt said.
"We recognize that part of our advertising decline is permanent -- reflecting the secular shift to the Internet. Another part is temporary -- reflecting the cyclical nature of our business in a recession."
McClatchy has reportedly put The Miami Herald up for sale.
According to Reuters, the company had $2.07 billion in debt as of Sept. 30, having paid down about $404 million in debt principal in the first nine months of the year.
"We have made further progress in paying down debt in the fourth quarter and expect to do so again next year." Pruitt said in the statement.
He gave no specifics on how McClatchy would streamline operations next year, but admitted, "Our current results are lousy, and the economy seems to be worsening. On the other hand, we expect in the second half of 2009 that the recession may have bottomed or perhaps the economy may even have returned to growth."
More from Pruitt's statement below.
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"We are responding with a broad, disciplined strategy focused on permanent changes in how we do business, and are focused on five key initiatives: improving revenue performance, especially from internet advertising; growing total audience based on the unduplicated reach of our print and online products; providing and expanding our range of high quality public service journalism, in all channels, print and digital; permanently reducing our cost structure; and continuing to pay down debt and improving our financial position.
"These initiatives are beginning to show promising results. Our online advertising is up 10.9% through October, way ahead of the industry average. Excluding employment advertising, which has declined nationally both online and in print, our online advertising grew 53.8% through October.
"We were also pleased to note that in the third quarter more than half of our online advertising came from ads placed only online; that is, they were not tied to a joint print buy. And online only advertising is growing quickly - up 26.9% in the third quarter. We believe this independent revenue stream bodes well for the future of our digital business and is evidence of its importance as a resource for advertisers. We are an industry leader in online advertising which now represents 12.2% of total advertising revenues compared to 8.6% for all of 2007....
"We approach 2009 with a strong sense of resolve. On the revenue side, the picture is decidedly mixed. Our current results are lousy, and the economy seems to be worsening. On the other hand, we expect in the second half of 2009 that the recession may have bottomed or perhaps the economy may even have returned to growth. Our ad revenue comparisons ease throughout the year, and we expect to see results from the initiatives we've taken to improve revenue performance. We will be working hard to narrow the rate of revenue decline in 2009.
"On the expense side, we have several advantages working for us. In the coming months you will see the full effect of our restructuring actions and we will continue to streamline operations in 2009. While newsprint prices currently compare unfavorably to the prior year, we believe they have peaked, and we expect them to fall as 2009 unfolds.
"We have paid down more than $404 million in debt principal through the first nine months of 2008 and debt at the end of the third quarter was $2.07 billion. We have made further progress in paying down debt in the fourth quarter and expect to do so again next year."
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