As newspaper spending falls, some companies face end


reading newspapersIn 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 4 of 4)

Symbol Lookup
IndexesChangePrice
DJIA-1.6712,502.81
NASDAQ-8.132,839.08
S&P 500+0.641,316.63

Last updated: May 23, 2012: 03:49 AM

Hot Stocks

General Electric

19.18+0.06(+0.31)

Alcoa

8.49-0.11(-1.28)

Apple Inc

556.97-4.31(-0.77)

Google Inc 'A'

600.80-13.31(-2.17)

Bank of America

6.98+0.15(+2.20)

Wal-Mart Stores

63.73+0.69(+1.09)

Exxon Mobil Corp

81.95-0.09(-0.11)

Ford

10.19-0.01(-0.10)

Citigroup

26.92+0.67(+2.55)

IBM

196.82-0.94(-0.48)

Yahoo

15.29-0.29(-1.86)

Starbucks

53.37-0.33(-0.61)

Microsoft

29.76+0.01(+0.03)

Home Depot

48.26+0.65(+1.37)

DailyFinance Headlines

Benzinga Headlines

TheFlyOnTheWall.com Headlines

    BioHealth Investor Headlines

    WalletPop Headlines

    DailyFinance BlackBerry App

    My Portfolios

    Track your stocks here!

    Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

    BloggingStocks Partners

    More from AOL Money & Finance

    BioHealth Investor Headlines

    Page Loaded in 1337759389679 ms.