Archive for the ‘McClatchy’ Category

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McClatchy down as 3Q trends worse

Tuesday, October 19th, 2010

McClatchy’s excuse that things are less bad than they have been looked like it might have run its course in the third quarter, as advertising revenue fell 6.1 percent in July over the same month of last year, followed by a 5.8 percent decline in August and then a 7.3 percent decline in September.

The McClatchy Co. reported an overall drop of 6 percent in third-quarter earnings on Tuesday, according to the Associated Press. Media Jobs Daily said the 6 percent revenue fall represents a 50 percent drop in income, or profit.

“Excluding unusual items, like a tax recalculation that saved the company some money in 2009 and one and a quarter million in restructuring costs in 2010, income was nearly flat at $10.5 million,” Media Jobs Daily said.

Even CEO Gary Pruitt appears shaken, saying that for the fourth quarter “visibility on revenues is limited,” according to the AP.

The publisher reported a 8 percent drop in revenue for the second quarter and and 8.2 percent drop for the first three months of the year.

Online advertising revenue from July-September was up 1.6 percent year-to-year to $47.5 million for the quarter, while print was down by 8 percent, at $201.7 million. Circulation revenue, including subscription fees and newsstand sales, declined 4 percent to $66.4 million, the AP said.

McClatchy stock was down 27 cents on Tuesday at $3.15 a share, a 7.89 percent drop on the day. Its highest price in the last three months was $3.96 on October 13. On April 20, it was $6.95, it’s best price in a  year.

McClatchy has cut more than 4,150 newspaper jobs since June 2008, according to the Sacramento Business Journal.

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McClatchy finances solid, analyst says – for now

Monday, September 20th, 2010

McClatchy Company gets a pat on the back for its fiscal discipline in a report by Fitch Ratings that’s summarized on Editor & Publisher’s Fitz & Co. blog.

The analyst says the publisher’s slowing revenue declines, tight cost controls and debt repayment have “exceeded expectations” and should be able to cover interest and principal payments for debt maturing through 2014.

“However, Fitch does not expect McClatchy to generate enough free cash flow to pay off its debt maturities in 2017,” the report says. “Given the secular risk for the industry, Fitch’s concerns that online revenue is not growing at a pace to offset the print revenue declines, and with no clear visibility of when revenues will turn positive, Fitch continues to remain cautious of McClatchy’s ability to refinance its 2017 maturities, and over the long term, the company’s capital structure could still be untenable.”

McClatchy has repaid about $3 billion in debt since buying the old Knight Ridder chain in 2006, and has lowered costs dramatically – principally through layoffs, which continue at the Kansas City and Miami newspapers.

Fitch continues to give McClatchy a CCC credit rating, a speculative-grade or “junk” rating that suggests a “high default risk,” but says keep up the good work and they could move the company to B, a speculative-grade or “junk” rating that suggests a “high default risk.”

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How newspapers are – and aren’t – diversifying

Tuesday, August 24th, 2010

Media critic Alan Mutter uses a McClatchy newspaper as the negative example in a post on his Newsosaur blog about how large newspaper publishers are diversifying to survive in the new media world.

“While papers like the Kansas City Star continue to pursue the traditional model of publishing only the main title and a free once-a-week advertising product sent to the homes of non-subscribers, the ABC [Audit Bureau of Circulations] reports that papers like the Chicago Tribune and Dallas Morning News have created such a wide variety of products that the flagship paper produces just 56 percent of the average weekday circulation in each of their respective markets,” Mutter writes.

As circulations fall, “foresighted publishers are creating niche products to try to capture readers who historically were unlikely to buy the legacy newspaper – and, of course, the advertisers who covet them as customers,” he adds.

The Tribune and Morning News both publish periodicals aimed at young adults and those who prefer to read Spanish-language publications. The Tribune also publishes a free tabloid written by and for teenagers, and the Morning News delivers a free, weekly TMC, or total-market-coverage, advertising product, like many McClatchy papers produce.

Mutter predicts that the once flagship, general interest newspaper will eventually become simply one product among several niche publications that successful publishers produce.

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Better papers tap readers to build revenue

Friday, August 6th, 2010

Newsonomics author Ken Doctor finds that newspaper companies are turning to higher prices for the paper itself to battle revenue declines, rendering the traditional 80/20 ad-circulation split obsolete. And  the ones that are doing it well are getting away with charging readers more because they’ve made their papers better, he says.

“While the digital news world seems consumed with conversations about paywalls and memberships, it is old-fashioned print circulation revenue that is the gainer in the post-80/20 formulas,” Doctor writes for Nieman Journalism Lab. “Sure, advertising’s ski slope decline has greatly altered the 80/20. So has, though, the significant up-pricing of both subscriptions and single copies over the past three years.”

A leader in the trend is apparently The Dallas Morning News, which raised the price of monthly subscriptions from $18 to $30 and is earning 38 percent of its revenue from circulation, 54 percent from advertising, and 8 percent from “contract printing plus,” he says.

The Dallas paper’s parent, A.H. Belo, reported a 6.6 percent increase in circulation revenue in the second quarter, while The New York Times Company reported a 3.2 percent increase and Scripps had a 4.5 percent increase in the first quarter (Scripps’ 2Q report is due Monday).

“Significantly, I think, each of those companies may have done a better job of minimizing newsroom cuts and reinvesting — at least a little — in that now higher-priced product,” Doctor says.

Better than whom? Better than McClatchy, which reported a 2.5 percent circulation revenue decline in the second quarter (and has raised prices); Lee, which was down 4.4 percent; and Gatehouse, which was down 2.5 percent.

Doctor has the current splits for each of the four publishers, and for McClatchy, the one we follow, it’s pretty much the newly declared old-hat model of 20 percent circulation, 76 percent ads and 4 percent other.

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McClatchy shows ‘hope’ despite 83% revenue fall

Friday, July 30th, 2010

So, this is good news these days? “Despite an 83 percent drop in net income, the results announced Thursday offered at least one sign of hope: McClatchy’s ad revenue, its lifeblood, fell by its lowest rate in more than three years.”

The report by the AP’s Mike Liedtke says McClatchy’s 8 percent fall in ad revenue is the best performance since a 5 percent decline in the first quarter of 2007. But, as he also points out, today’s year-to-year comparisons are against poor performances. That’s 8 percent less than a number that was bad to begin with.

Net income for the quarter was $7.3 million, down from $42.2 million a year ago. Total revenue fell 6 percent to $342 million, the AP says.

The company is blaming the earnings plunge on “higher interest costs as we extended debt maturities,” according to the Sacramento Business Journal’s report.  Interest payments for the quarter were up 44 percent to $49 million compared to $34 million at the same time last year after restructuring in February that extended repayment to 2017.

McClatchy was struggling with a debt of $1.8 billion as of the end of June, the SBJ says.

The company also sold about 200,000, or 8 percent, fewer copies of its weekday newspapers this past quarter, though higher prices eased that hit a little.

McClatchy management projects a 4 to 6 percent revenue decline year-to-year for the coming third quarter.

“While the economic recovery hasn’t been robust or smooth, we believe it is beginning to spread across the markets we serve,” CEO Gary Pruitt said, according to the AP report.

Employment advertising, half of which is online these days, was up 1.5 percent in May, marking the first month of growth in employment advertising revenue in four years, the SBJ says. Employment advertising rose 0.8 percent in June.

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McClatchy signs for exclusive Groupon deals

Friday, July 9th, 2010

McClatchy newspaper websites will begin presenting exclusive daily deals on local goods, services and cultural events through the Groupon shopping website, Editor & Publisher reported recently.

The Sacramento and Kansas City sites will get them first, and the program will roll out to the rest of the chain over the next few months.

“The agreement provides a key component in McClatchy’s local marketplace initiative designed to bring together consumers looking for bargains and merchants seeking increased sales,” E&P says.

“For Groupon, the agreement is part of a larger initiative to offer a new, incremental revenue stream to major publishers.”

Groupon negotiates discounted deals with local businesses, and then sends free e-mail alerts to subscribers. Deals are activated if a minimum number of people agree to buy, which encourages subscribers to share the promotion with others via social media tools.

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McClatchy D.C. Bureau drops polling

Thursday, July 8th, 2010

Budget cuts at McClatchy Newspapers  mean the Washington D.C. bureau will drop its contract with Ipsos, which has conducted polls for the news outlet for years, Media Matters for America reported today.

Ipsos had conducted about one poll a month for McClatchy, usually about politics, Robert Rankin, McClatchy’s government and politics editor, told MMA’s Joe Strupp.

“The budget requires that that relationship comes to an end,” Rankin said. “… This hurts. We are staffing (political coverage) at about the same level. But we can’t cover the absence of polls. There is no way to replace them.”

“McClatchy’s move is not unique,” Strupp writes. “Numerous news outlets in print and on air have been cutting back on the use of polls, most citing budgetary needs.”

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McClatchy to automate online ad creation

Sunday, May 23rd, 2010

McClatchy newspapers are set to begin using a computer program that automatically creates online advertisements for local businesses, the New York Times reported Friday.

After the user types in the business name and location, PlaceLocal builds a display ad automatically, “scouring the Internet for references to (the business)” the NYT says. “Then it combines the photographs it finds with reviews, customer comments and other text into a customized online ad for the business.”

“The company has … signed up the McClatchy newspaper chain and will soon be on some of its Web sites,” Roger Lee, chief operating officer of PaperG, the program’s developer, told the newspaper.

The program is already in use on 32 local media websites, including Time Out New York and Time Out Chicago, and on 29 network TV affiliates owned or managed by Hearst Television, Lee said.

Advertisers pay about $150 a month to $500 or more, based primarily on how many times the ad is shown, and PaperG takes a percentage of this fee.

“Because the program creates an ad in moments, it saves the time of people on the Web site who might normally need to build the ad themselves, or work with the customer to build one. That can translate into lower charges,” Shaina Park, a sales representative at Time Out New York said.

Victor Wong, PaperG’s chief executive, said sales reps at media companies also use PlaceLocal to create sample or “spec” ads to show potential customers.

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Gary Pruitt lies to stockholders

Thursday, May 20th, 2010

Gary Pruitt, at McClatchy’s shareholders meeting Wednesday, boasted of “McClatchy’s unwavering commitment to public service journalism” and vowed that the publishing company would continue to “provide relevant, high quality journalism.”

Anyone who reads a McClatchy newspaper knows the quality of the journalism has declined precipitously as the company has cut positions, and anyone who works for, or has worked for, McClatchy knows that its management is committed only to the bottom line — money.

Pruitt bases his claim of ongoing quality on national recognition of the work of three McClatchy papers: The Kansas City Star winning the Robert F. Kennedy Award, the Belleville (Ill.) News-Democrat winning the George Polk Award and the McClatchy Washington Bureau being named as a Pulitzer Prize finalist for national reporting. But this work, and other solid reporting at McClatchy newspapers, is the work of local journalists who remain dedicated to their profession, not McClatchy. Pruitt gloms onto their efforts while he has eliminated the jobs of about a third of their colleagues and makes plans to eliminate more.

Perhaps the job cuts were inevitable given the economy and the changes in the newspaper industry. But to maintain that they have not adversely affected the quality of the newspapers is simply a lie and an insult to those whose lives have been disrupted by these layoffs.

Pruitt is every bit as despicable as the CEOs of BP, Wall Street banks, Big Tobacco and other industries who care solely about profits and don’t give a thought about who they use or hurt along the way.

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McClatchy to reap $230M in sale

Friday, May 7th, 2010

The McClatchy Company is about to pocket $230 million from a man interested in a sure-fire advertising vehicle.

But, Mark Siffin isn’t advertising in the company’s newspapers. He wants land McClatchy owns so he can build a parking garage and erect a pair of 20-story-tall electronic billboards on top of it, according to the South Florida Business Journal.

Siffin will pay $230 million for 10 acres owned by McClatchy’s Miami Herald. He plans to build the garage and a retail center next door. He has already paid McClatchy $16 million toward the purchase, which included an extension on the contract to close in 2011.

Siffin still has to get a city commission to approve a new ordinance allowing the electronic billboards. Some residents oppose them.

Regardless, McClatchy gets to sell land it has been trying to unload for some time at a good price; the same lot was under contract for $190 million in 2005, the height of the real estate market, according to the Journal.

You’d think $230 million could save a lot of journalists’ jobs, but you wouldn’t want to bet on it.

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