Posts Tagged ‘revenue’

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.

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.

Street no longer buying ‘cost-cutting’

Tuesday, July 20th, 2010

Editor & Publisher’s Mark Fitzgerald takes a look at Gannett Co.’s second-quarter earnings and says in his Fitz & Co. blog that simply cutting costs, which for the most part means laying off staff, no longer flies for newspaper publishers.

“The Street will no longer be satisfied with earnings pumped up only by continual cost-cutting. Gannett (GCI) handily beat Street estimates of earnings – but its overall earnings, in a quarter when its broadcast properties were humming nicely, was down 1.6%. … GCI got hammered for those results Friday, falling more than 10 percent.”

Gannet’s print and circulation revenues were down for the quarter also.

Other publishers’ stocks are also down as their 2Q reports come in the next several days, Fitzgerald says.

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.

McClatchy ‘profit’ debatable; more job cuts hinted

Thursday, April 22nd, 2010

The McClatchy Company continues to be hampered by debt, with a reported loss in the latest quarter attributed “primarily to one-time charges for refinancing debt and restructuring,” according to the Sacramento Business Journal.

The publisher’s first quarter report on Thursday showed improvement, thanks to reduced expenses — obtained chiefly through layoffs, which may not be over  — and an advertising climate that isn’t as bad as it was.

But the bottom line was  “a net loss from continuing operations of $2 million, or 2 cents per share,” the Business Journal says. “In the same period last year, the company incurred a net loss from continuing operations of $37.7 million, or 45 cents per share.

“Without the charges, McClatchy earned $4.8 million, or 6 cents a share, for the quarter, compared to a loss of $22.9 million, or 28 cents a share, in first-quarter 2009.”

The Associated Press report, on the other hand, says “a one-time accounting gain related to newspapers that it sold a few years ago” allows McClatchy to claim a profit for the quarter. “[N]et income, including discontinued operations, came to $2.2 million, or 3 cents per share,” the AP says. It lost $37.5 million, or 45 cents per share, in the same period a year earlier, which included charges for severance.

Advertising revenue dropped 11.2 percent to $253 million, better than the 20.5 percent drop in the fourth quarter of 2009. In last year’s third quarter, ad revenue fell 28.1 percent.

Total revenue for the quarter was 8.2 percent less than a year ago, at $335.6 million compared to $365.6 million.

McClatchy’s stock fell following the report, perhaps, Benchmark Co. media analyst Edward Atorino told the AP, because “some investors may have been looking for more details about how McClatchy plans to cut costs, given that it expects further revenue declines.”

The company’s  costs, excluding severance payments, declined more than 21 percent in the first quarter, compared with the same period a year earlier, largely because of lower payroll and newsprint expense, the AP said. McClatchy has cut about a third of its work force since the middle of 2008.

“In a statement, McClatchy CEO Gary Pruitt said the company ‘will remain vigilant’ on costs but acknowledged that second-quarter expenses will not decline the way they did in the first,” the AP said. “During a conference call, Pruitt said the company would try to avoid further job cuts, but he didn’t rule them out.”

The debt restructuring involved extending  “approximately $1 billion in maturities from mid-2011 to mid-2013 and beyond, including the $875 million of senior secured notes due in 2017,” Pat Talamantes, McClatchy’s chief financial officer, said in the release.

McClatchy’s debt remains from its $4.5 billion purchase in 2006 of the much-larger Knight-Ridder newspaper chain.

McClatchy’s stock fell $0.75, or 10.98 percent, to close at $6.08 Thursday.

Gannett leads off 1Q reports with a hit

Friday, April 16th, 2010

Cost cutting and a not-as-bad advertising climate in the first quarter made Gannett Co. look good in its 1Q earnings report Friday, and the tide lifted not all but some boats.

“Gannett did not issue formal earnings guidance for the current quarter or the rest of the year, and CEO Craig Dubow declined to give specifics on how ad revenue is shaping up in April,” The Associated Press said. “But he told analysts on a conference call that the year was ‘off to a great start.’ He added: ‘The momentum that we had at the end of the year continued through the first quarter.’

“Gannett was the first major publisher to report earnings for the January-March period and could offer a preview of what will come next week from McClatchy Co., Lee Enterprises Inc. and The New York Times Co.”

After surging to a new 52-week high of $19.68 in early trading, Gannett shares retreated to $18.04 Friday afternoon, down $0.10 on the day. McClatchy rose $0.42 to $6.46, and Lee shares jumped $0.31 to $4.35. The New York Times was down $0.36 to $12.35.

Gannett, which owns USA Today and more than 80 other daily newspapers along with TV stations, said its net income jumped 51 percent despite a 4 percent decline in revenue. Last year it cut 1,400 jobs, or about 3 percent of its work force.

As for McClatchy, which reports April 22, “JP Morgan forecasts that ads will be off by 8.4 percent as circulation continues to grow,” says PaidContent.org. “While the circulation gains might not offset negativity on the ad front, cost-cuts should help margins jump to 25 percent from 1Q ’09’s 12 percent. Ebitda should rise 91 percent to $83 million.

“In general, McClatchy’s heavy presence in Florida and California means that its fortunes are directly tied to the economic winds in those two troubled states. Ultimately, that will add to the general industry-wide woes affecting the publisher.”

Magazines show ad growth in few sectors

Saturday, April 10th, 2010

New figures from the Publishers Information Bureau show some advertisers are coming back to magazines, says Advertising Age, including automotive advertisers, whose spending on ad pages and rate-card ads rose in the past quarter for the first time since 2007.

“Three of the 12 major advertising categories in magazines ran more magazine ad pages in the first quarter this year than in the first quarter last year: financial, insurance and real estate, which increased ad pages by 11.3 percent; toiletries and cosmetics, which increased ad pages by 7.6 percent; and automotive, which increased ad pages by a slim 1.3 percent,” the magazine says.

“The other nine big marketer categories continued to post significant drops, led by apparel and accessories, which ran 15.7 percent fewer ad pages; drugs and remedies, which ran 15.6 percent fewer ad pages; technology, which ran 14.7 percent fewer pages; media and advertising, which ran 13 percent fewer ad pages; and public transportation, hotels and resorts, which also ran 13 percent fewer ad pages.”

“Keep in mind that these comparisons are being made against a quarter last year that was wholly abysmal, with a 25.9 percent drop in ad pages by the bureau’s count,” the magazine says.

Christian Science Monitor growing, earning online

Wednesday, April 7th, 2010

The Christian Science Monitor, which stopped publishing a daily print edition in March 2009 and is mostly a Web-only operation, has seen a 60 percent increase in traffic but has earned about half of the projected ad revenue, says Media Jobs Daily quoting Media Matters.

The CSM actually maintains a weekly print edition, which has seen 79 percent circulation growth since its launch, Media Jobs Daily says.

Meanwhile, the company projected $870,000 in online ad revenue in its first year, but only brought in $490,000.

“The paper also extended a buyout offer to its 85 editorial employees, and four accepted,” says the blog, which focuses on media industry employment, recruitment and career development.

“But … there’s still 81 newsmen and women working at this paper, which is a heck of a lot more than the number of people at any other online-only outfit we can think of.”

News & Observer records solid first quarter

Tuesday, April 6th, 2010

Employees at The News & Observer in Raleigh fearing a new round of cuts with the end of the year’s first quarter were able to exhale Monday. A memo  to employees from Publisher Orage Quarles III says the newspaper exceeded “budgeted goals in all categories” during the first three months of 2010.

The note gives few details, but credits “better than expected advertising revenue performance and a continued focus on expenses.” The Advertising Department’s “third annual online sales blitz” racked up “more than $1 million in annualized sales,” Quarles adds.

“There are still question marks about the economy and its effect on our ad revenues, but we are seeing signs that the worst may be behind us.  We certainly hope so,” the memo says.

Newspaper revenue sinks to 23-year low

Thursday, March 25th, 2010

Another bad report about newspaper ad revenue: the Newspaper Association of America, a group that some accuse of spinning too positively for its industry, said this week that ad revenue hit its lowest level since 1986 after a drop of 27 percent in 2009.

But the $27.6 billion in 2009 revenue looks worse when you adjust for inflation, the Associated Press’ report says. The $27 billion earned in 1986 “would equal nearly $53 billion in today’s dollars.”

On the other hand, “ad revenue in the final three months of the year fell 24 percent from a year earlier to $7.7 billion — the smallest quarterly percentage decline of 2009.

“‘Unfavorable trends for newspaper ad spending continued to diminish as the fourth quarter progressed, a sign that business conditions have begun to gradually improve,’ NAA President and CEO John Sturm said in a statement.”