In the fourth quarter, newspaper revenue dropped 10%, including revenue from online enterprises.
According to The Wall Street Journal, "Ad spending at newspapers and their Web sites totaled $12.6 billion in the December quarter, compared with $14 billion in the final three months of 2006." Online spending was only 7% of the total.
Two companies may be facing forced sales of some of their properties or even outright liquidations. The company in the most trouble is Journal Register (NYSE:JRC). The firm's share price is at $.55 and has been slightly lower. Two years ago, it traded above $12. Falling revenue this year could cause the company to miss payments on its debt. In the fourth quarter of last year, the company has about $9 million in operating income before a non-cash write-off. Its debt service was also $9 million. Revenue is likely to be down more again this year.
The other company in real trouble is the nation's third-largest newspaper operator, McClatchy (NYSE:MNI). The operator bought rival Knight-Ridder and took on huge debt in the process. McClatchy trades just above $10, down from $50 less than two years ago. The company's revenue fell almost 12% in February. McClatchy recently wrote off almost $1.5 billion due to the falling value of its assets. Both Moody's and Fitch have either cut the firm's ratings or put it on credit review.
Just a year ago, it would have been unusual to find investors who thought a large newspaper company would go Chapter 11. This year, it will almost certainly happen.
Douglas A. McIntyre is an editor at 247wallst.com.











Reader Comments (Page 1 of 4)
3-31-2008 @ 9:23AM
jojo said...
Unfortunately, there are too many newspapers with "journalists" that write opinion, or try to MAKE news rather than REPORT news (you know, those pesky FACTS that get in the way) and readers are fed up with it.
3-31-2008 @ 9:26AM
Douglas said...
It would be of great service to the state of Georgia if The Atlanta Journal/Constitution would go out of business. The editor, Cynthia Tucker, speaks only to the Flotsam and Jetsam of about 10% of this state. Those who need something from the Federal or State governments.
3-31-2008 @ 9:37AM
Chuck Boteler said...
As a newspaper media planner and buyer, I believe that most of us could see this coming a while ago. This trend will continue because we now live in an "information on demand" society, so traditional newspaper news is already old by the time we get to it.
The only reason we haven't seen news like this sooner is because of newspapers taking leading roles in online delivery of news, which has NEVER been its bread and butter revenue source.
From a print advertising perspective, local and national ad rates have roughly doubled or tripled over the past 20 years, while circulation has remained the same or dropped, thus making advertising buys only 1/2 to 1/3 as "efficient" as is used to be.
However, most newspaper advertising staffs haven't quite caught onto this concept from the buying side. The days of telling an advertiser "this is our rate...take it or leave it" are now allowing buyers to select the latter, unfortunately.
3-31-2008 @ 9:48AM
Joe said...
Douglas, well said. Living in Atlanta, it is painful to have to read that silly paper, and, of top of that, have to read the communism of that incompetent and useless editor.
It is for this reason I only get the paper on Sundays. On Sunday, at least, we can get the coupons.
3-31-2008 @ 9:51AM
Tom Sanchez said...
People do not want the opinions of the liberal media.
3-31-2008 @ 10:02AM
termig8rr said...
Newspapers just don't get it. They are driven by people (reporters, editors, publishers) that do not want to give customers what the customer wants. Instead they want to advance their own agendas. Finally the customer has other options.
Most mainstream media in the US is very liberal. People just don't want the continued pessimissim.
Remedy? Report the news as it is - not as you want it to be. Spare us the liberal diatribes. Change ad policies/rates so small business & individuals can afford to advertise.
Then again - it may be to late. See Ya!
3-31-2008 @ 10:27AM
Jim T said...
It looks as if the liberal newspapers are going to go the route of liberal talk radio. Maybe we the people are trying to tell the liberal, anti-American crowd something. We want facts in our news, not opinion. Keep the opinion to the op-ed pages and maybe even balance those out. But news should be the facts as they happened not the way some leftist reporter and/or editor wanted them to happen.
3-31-2008 @ 10:27AM
Beltway Greg said...
Liberal media? People can hardly identify the rhetorical slant of an article. People in this country don't read, it's that simple. Of course when the White House clears a former gay call boy working for the non-existent Talon News Service into its news conferences for two years and gives him a disproportionate number of questions that's fine. One thing is for sure, the 4000+ brave soldiers that have died in this senseless war weren't killed by the "Liberal Media." They were killed by this White House and by flag waving drug addicted draft dodgers like Rush Dirtbaugh, A.K.A., Cheney's best friend.
Mission Accomplished.
Beltway Greg
3-31-2008 @ 10:29AM
TAK said...
Everyone before me got it right - we are tired of the media making and spinning their version of the news. The egos must be huge and they think they are the stars we yearn for. For some reason, the intelligence of the average American who is paying attention - important distinction - is seriously under-rated. We dont have to be told what to think or what is good for us. We DO see the agenda of some people coming through their "news" story, and with so many alternatives to the newspaper, it's clear we don't have to put with that source anymore, we can read the facts and make up our own minds. Online versions of the newspaper will not catch on either if it is just the same old thing rehashed electronically, I know I don't bother to read them either.
3-31-2008 @ 10:40AM
SFlorida said...
As a longtime Miami Herald subscriber, I find not only the content beginning to lag but also simple editing being sacrificed. There are many spelling and print errors every day. McClatchy has also turned up the heat of global warming. Even the most esoteric article has some left-wing statement about our impending doom about global warming. It's weird, stupid and a total turn-off. Another favorite topic of the Herald is their constant concern for the prisoners at Guantanamo Bay. I am sick of it. Let 'em rot.
3-31-2008 @ 10:50AM
Julie said...
To Beltway Greg:
You're wrong. A recent Harvard study has shown that increases in sectarian violence in Iraq seems very much tied in time to negative reportage in our press. Some of us just say, "Well, duh," to that. If you think that our enemies aren't "taking our temperature" by monitoring our media to measure our resolve in the Iraq conflict, well--you're just delusional.
So, dude, put down the crack pipe.
3-31-2008 @ 11:01AM
Marty said...
Good. I hope their liberal bias breaks them all. Hypocrites claim to be the voice of freedom.
3-31-2008 @ 11:07AM
Kate said...
Our local newspaper is known as " The Herald And No News". It's not "liberal based" as others are claiming their newspapers are, it's very much the opposite. Newspapers are said to be "liberal" when they accurately report the negative management of our country (and war in Iraq) by President Bush and his administration. That does not make a newspaper liberal, just factual.
3-31-2008 @ 11:56AM
StoneMan said...
The main reasons for the Newspapers decline is the Liberal Leftist Agenda, Journalistic Malpractice Of So Called Journalists.
The Fair and Balanced FOX NEWS, Open Blogs & Bloggers, show more fairness than the past Liberal Propagandists. It is funny to see phony liberal reporters or so called journalists condem bloggers, the internet and FOX NEWS. They are threatened because of their success and the exposure of their liberal ideology. Some Liberal So Called Journalists want to Censor and apply "A Fairness Doctrine" Their media has never been fair as far as I am concerned until FOX and others have taken on the Nazi Media Press & Unfair Indoctrinated DemonRats! Screw you Bill Moyers, Bernard Kalb, Chris Matthews, Keith Olbermann, Wolf Blitzer...etc...NY Times, Boston Globe, etc..We have arrived and you are departing and good ridance, liars and Facist Liberals. Are you going to Burn The American Spectator?, Bomb Fox News? Stifle Rupurt Murdoch? Please Go to Hugo Chavez Land and Cuba for this kind of BULL.
3-31-2008 @ 12:05PM
Walt said...
I can't believe most of the listers have it right! We are tired of being lied to and only hearing "their" version of what "they" call the truth of the current happenings. This is refreshing!
3-31-2008 @ 12:05PM
Mike Rath said...
Unfortunately, not all newspapers fall into the category of the above named. Some are dying out because of the internet.. I read both, but prefer a newspaper with my cup of coffee in the morning.
The internet does not provide the "local" news
that some of us find interesting...
I doubt many people are swayed by either the liberal or conservative bias found in newspapers. If that were the criteria, TV, radio and most of the internet are also doomed.
3-31-2008 @ 12:42PM
Elizabeth said...
A year ago I left a newspaper I'd loved, where I had been writer, editor and designer for 18 years.
There were three prompts for this exit:
Management made it clear that no opinion was valued unless it came from the same-old, same-old golden boys or from outside "consultants" who knew exactly squat about our culture, readers.
Staff on the streets -- the people who really knew the buzz -- were never, ever consulted on a potential revised mission statement for the paper.
The more addled management became the more work was heaped willy-nilly on editors dizzied by myriad, shifting responsibilities and little sense that anything proposed was going to save the ship.
The price paid? Disarray and slumping revenues.
It breaks my heart but I saw all this coming four years ago; I am witness to the chosen profession of my lifetime as it is being swept down the drain.
While grieving this demise, I'm also disgusted by arrogance of many newspaper management grunts who effectively closed the door to fresh ideas from staff that might have made a difference.
Now the know-it-alls are sinking in their own mud while the fabulous teams of street reporters will be the ones to eventually face job loss partially due to that arrogance. What a damn shame!
3-31-2008 @ 12:58PM
Albert said...
Is it any wonder they are shutting down? I used to get the Baltimore Sunpaper every day but when trying to read the news, there were many spelling errors not to mention improper sentence structure. I was told that they were required to hire management people who graduated from Morgan State College who could barely read let alone write for a newspaper. Our colleges are pushing people through even if they can't pass the exams, just like in High Schools now.
3-31-2008 @ 1:01PM
Mike said...
Journalists don't belong anywhere on the political spectrum. They're not politicians, they're purveyors of information; the information citizens need to make informed decisions. When a journalist installs himself anywhere on the political spectrum, he stops reporting news and starts spouting opinion. Opinion is worthless. People are catching on to this fact, and the papers that try to sell it are suffering the consequences.
3-31-2008 @ 1:02PM
Bob said...
If they would roll back their advertising rates this might not have happened. They aren't the only way to advertise anymore, but instead of rolling back their rates, they have increased them even more, driving more and more advertising away - simple basic greed and a lack of foresight as well as arrogance on their parts. We have a McClatchy paper here in my city and their rates are unbelievably unreasonable.....no wonder craigslist has become so popular.