STMG Reports Weak 2Q

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By: E&P Staff The Sun-Times Media Group (STMG) reported an operating loss of $80.6 million for 2Q.

Advertising revenue dropped 12% to $73.2 million. Classified ad revenue was down 18%. Retail advertising revenue decreased 9% and national tumbled 19%.

Internet advertising revenue jumped 58%.

Circulation revenue declined 8% to $19.3 million.

"We have been clear all along that 2007 would be a tough year," Cyrus F. Freidheim, Jr., CEO of STMG, said in a statement. "Like all newspapers we continue to face a very uncertain advertising environment. Yet the turnaround plan we announced in May is beginning to show some results."

Operating revenue dropped 12% to $94.3 million in the quarter. Total operating costs and expenses grew to $174.9 million compared with $121.1 million for the same quarter a year ago. The change reflects a $25.1 million charge related to the litigation costs for former STMG executives and $33.7 million in bad debt expense related to a loan due from an affiliate of Hollinger Inc.

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