So, maybe we can clean the house a little bit. Finally, these guys are getting a bit of a shake up too! Isn’t it amazing that the crowds that arrogantly stirred propaganda over the last decades are being shaken at their foundations?
Bring on the cleansing! Maybe next time around, we will find the media a bit more humble and a lot more wholesome?!
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Feb. 19 (Bloomberg) — The collapse of the U.S. newspaper industry is accelerating as a deepening plunge in advertising forces publishers to consider curtailing print editions or shutting down altogether.
The Seattle Post-Intelligencer will shut down or appear only on the Internet if its parent company can’t find a buyer for it by March. The Tucson Citizen in Arizona will close if it can’t be sold. Denver’s Rocky Mountain News is up for sale, and Detroit’s two dailies cut their publishing schedule to three days a week.
“There’s going to be a lot of papers giving up days of the week that they publish editions and an acceleration of movement from print to digital publishing,” said Ken Doctor, an analyst at media consultant Outsell Inc. in Burlingame, California.
New York Times Co., Gannett Co. and McClatchy Co., which altogether own about 135 dailies, posted publishing ad revenue declines of more than 13 percent in 2008 and anticipate further drops this year. The publishers are selling assets and cutting at least 5,000 jobs amid the worst recession in more than 70 years.
“There really isn’t much of a silver lining to look to for advertising sales this year,” said Jon Swallen, an analyst with TNS Media Intelligence in New York.
About 60 percent of ad revenue comes from retail, automotive, financial services and real estate marketers, among the hardest-hit industries during the U.S. recession, he said.
Circulation Declines
The recession has exacerbated print declines that began when readers started migrating to the Internet, where advertising is less lucrative. U.S. newspaper circulation fell 4.6 percent to an average of 38.2 million copies daily in the year ended Sept. 30, according to the Audit Bureau of Circulations, which tracks 507 titles. It declined 2.6 percent in 2007.
New York Times posted a 13 percent drop in ad revenue last year, with a 16 percent decline in December. The New York-based company hired Goldman Sachs Group Inc. to sell its minority stake in the Boston Red Sox baseball team and is in talks for a sale- leaseback deal for part of its Manhattan headquarters.
The publisher is trimming jobs at its Boston Globe newspaper and cut almost 10 percent of staff at its About.com Web site.
“Advertisers will be cautious with their budgets, particularly in the early part of the year,” Chief Executive Officer Janet Robinson said on a Jan. 28 conference call. “The rate of decline in print advertising has accelerated from what we saw in December.”
Gannett, the largest U.S. newspaper publisher, said print ad revenue slipped 16 percent in 2008. Sacramento, California-based McClatchy reported an 18 percent decline in the period.
USA Today Cuts
This quarter, Gannett is enforcing one week of unpaid leave for about 31,000 U.S. employees to help prevent firings. The McLean, Virginia-based publisher has cut positions at USA Today, the largest newspaper by circulation, and plans to close the Tucson Citizen unless it can find a buyer by March 21.
Gannett’s Detroit Free Press and MediaNews Group Inc.’s Detroit News, published jointly, deliver three days a week.
Tara Connell, a spokeswoman for Gannett, said the publisher would be accepting bids for the Tucson newspaper through today to allow time to review them. She declined to give any more details.
Gannett, down 87 percent in the past year, declined 6 cents to $4 at 10:55 a.m. in New York Stock Exchange composite trading. New York Times fell 7 cents to $3.64 and McClatchy was unchanged at 51 cents, a record low. Standard & Poor’s 500 Publishing & Printing Index slumped to its lowest in 16 years in November.
McClatchy, which prints the Sacramento Bee and Miami Herald, is eliminating its dividend, halting matches to employee 401(k) plans and freezing its pension plans.
“We don’t have any better sense than other market observers as to how long the current recession will last,” CEO Gary Pruitt said on Feb. 5.
‘Very Tough’
Standard & Poor’s cut its rating on McClatchy debt further into junk this year, saying ad declines may cause the publisher to violate financial covenants.
“It’s going to be very, very tough for a lot of papers,” Mort Zuckerman, who owns the New York Daily News, said on the Charlie Rose show aired Feb. 11. “We have been deserted by advertisers, that’s the problem.”
Yesterday, the Daily News; Hearst’s Albany Times-Union; Berkshire Hathaway Inc.’s Buffalo News; North Jersey Media Group’s Record; and Advance Publications Inc.’s Newark Star- Ledger said in a joint statement they would be sharing articles and photos to help pare expenses.
Tribune Co. is sharing content among its Sun-Sentinel, based in South Florida, and Chicago Tribune to save costs, according to people who attended a meeting where the strategy was discussed. It’s planning job cuts and pay freezes at the Chicago paper and will eliminate 300 positions at the Los Angeles Times.
Tribune, saddled with debt after being taken private by billionaire Sam Zell and a group of investors in 2007, is seeking a buyer for its Cubs baseball team. The publisher filed for Chapter 11 bankruptcy Dec. 8 and is reorganizing its debt.
Rocky Mountain News
E.W. Scripps Co. said Dec. 4 that it was seeking a buyer for Denver-based Rocky Mountain News and its share of a joint operating agreement with MediaNews’s Denver Post. Cincinnati- based Scripps said it would examine other options for the unprofitable newspaper if no acceptable bid comes in.
Closing the newspaper is among the alternatives the publisher may consider, E.W. Scripps spokesman Tim King said. Scripps said today it will cut most employees’ pay by as much as 5 percent and suspend matching contributions to 401(k) plans and cut bonuses as part of a plan to save $20 million this year.
Hearst Corp., based in New York, will keep a Web-only edition of the Seattle Post-Intelligencer if it can’t find a buyer by early March. The newspaper lost $14 million last year and Hearst expects the loss to widen in 2009.
Jessica Kleiman, a spokeswoman for Hearst, and New York Times spokeswoman Catherine Mathis declined to comment.
Doctor, the analyst, said that strategy likely won’t work for most publishers because Internet advertising represents on average only about 10 percent of revenue.
“You’ll never make up for the lost revenue from the print side in that arrangement,” he said.