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Kansas Liberty: 23 October 2008
Punch-drunk publisher staggers on, despite losses in circulation and advertising.
Star publisher takes yet another hit
At first, it seemed like good news for the McClatchy Company, the once high-flying publisher of the Kansas City Star and the Wichita Eagle. The company announced a third-quarter profit, the equivalent of a unicorn spotting for the nervous employees of Kansas' liberal dailies.
But then the ad revenue reports came in, and the Star and the Eagle were back in the real world again, where the papers faced the now-familiar scenario of declining readership and declining advertising.
In a statement released with the new figures, Gary Pruitt, the company's chairman and CEO, said the ad forecast “continues to be weak...we expect print adverting revenues to continue to be down. Thus far in October, advertising revenues are tracking similarly to September."
And September was disastrous for the publisher.
For the quarter ending September 28, McClatchy lost nearly $1.5 billion. Third-quarter net income was $1.4 million.
As recently as Tuesday, McClatchy shares had been $3.39 - near historic lows for a company whose stock sold for nearly $75 less than four years ago. Nevertheless, keeping the share price above $3 had been a near-miraculous feat of levitation, considering the downward pressure on the stock.
McClatchy has lost more than 90 percent of its value in the last two years. The stock closed at $2.84 Thursday.
According to the St Louis Business Journal, total ad revenue fell 19 percent to $370 million over the last 12 months, while circulation revenue dropped 4.9 percent or nearly $65 million for the last three months.
In September, print ad revenue fell 22.6 percent, for a combined advertising drop of 19.9 percent to $115 million, reported the Business Journal. The company recently cut its dividends by half to pay down some of its debt. Since 2007, the company has laid off nearly one in five employees.
One of the few exciting developments for the Star has been the reaction to the paper's recent assertion that anyone who calls Democratic presidential nominee Barack Obama's a "socialist" is a racist. Last week, Obama promised to "spread the wealth around."
Today, Fitch Ratings cut the company's debt standing to B-.
Sebelius names Dan Biles to the state Supreme Court
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