Saturday, March 8, 2014
NEW YORK — Regional and national newspaper publishers, already staggering with a drop in ad revenue more severe than the industry has seen since the Great Depression, say the second half of 2008 may be even worse.
Three publishers -- McClatchy Co., Lee Enterprises Inc. and E.W. Scripps Co. -- reported Thursday that their profits had fallen by nearly half in the second quarter compared with last year.
They joined industry heavyweights New York Times Co. and Gannet Co., which reported earnings Wednesday and last week, in saying double-digit drops in ad revenue were most to blame for plunging profits, though rising costs played a role too.
All five publishers said ad revenue fell fastest in June, and most said July is looking as bad or worse.
''It really shows we haven't yet reached a bottom for revenue declines,'' said Mike Simonton, a media analyst with Fitch Ratings.
Thursday afternoon, The Copley Press Inc., parent company of the San Diego Union-Tribune, where the work force was cut 10 percent this year, announced it was exploring a sale. Executives cited the impact of the housing slump and falling ad revenue as the two main factors in the company's decision.
E.W. Scripps, the newspaper and broadcast TV company that spun off its Internet and cable divisions on July 1, warned Thursday that its third-quarter earnings would fall short of analysts' expectations. After it reviews the fair value of its assets, the company said, it may post a noncash charge to reflect how far the value has fallen.
McClatchy Co., whose papers include The Miami Herald and The Sacramento Bee, said Thursday the market for ad spending will not improve until the current economic slump abates.
The major costs hitting publishers are in distribution and newsprint. Scores of papers have reduced their newsprint consumption, by trimming the number or size of pages they print, to offset prices that have jumped in the past year.