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Kansas Liberty: 16 September 2008
Going down: Readers, advertisers, revenue, stock price, employees
Eagle, KC Star publisher hammered again
The McClatchy Co., publisher of the Kansas City Star and Wichita Eagle, announced Tuesday it would cut its work force another 10 percent as the company's shares continued to disintegrate. MNI shares are now around $3.
The cuts announced by CEO Gary Pruitt come on top of previous announcements earlier this year that brought workforce reductions to more than 20 percent in the last two years.
Analysts blamed the cuts on the disappearing readers and advertisers the company once counted on for revenue.
Many critics say the papers have alienated at least half their potential readership because of their strident partisan tone and their failure to connect with the concerns of Midwestern readers. Many conservative Republicans now consider the Eagle and the Star to be adversaries and wish the papers ill. News commentators have noted that the vice-presidential campaign of Sarah Palin seems to gather momentum every time the press attempts to ridicule her.
Company announcements sound confused. For example, Pruitt told Dow Jones Newswires the cuts, which will amount to a companywide reduction of 1,150 journalists and other employees, reflect McClatchy's commitment to deliver news online or "in whatever medium our readers want to receive it." Pruitt didn't specify what other ways the company might deliver the news.
McClatchy's fortunes have been in decline for several years. The most recent bad news for employees and stockholders: Total revenue fell 16 percent in August and ad revenue dropped 18 percent compared with a year earlier as readers and advertisers abandoned the papers.
Worse, those declines are more severe than other recent downward-trending figures.
For the first eight months of the year, Dow Jones reported McClatchy's total revenue declined 15 percent while ad revenues dropped 17 percent. Online revenues were up slightly in recent months, but not nearly enough to offset the losses.
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