Big media conglomerates (NWS, DIS) say they’re not feeling the effects of a recession. Big newspapers companies, however, say they’re getting pummelled. The latest entry: McClatchy, who reported total ad revenue dropping 9.1% in the last quarter. MediaPost:
As with other newspaper companies, McClatchy’s losses were led by a 20% decline in print classifieds, with real estate, automobile and help-wanted revenues all suffering double-digit drops. In the fourth quarter, real estate tumbled 30.9%, automotive 13.3%, and help wanted 24%.
McClatchy management blamed the weakness in real estate markets in California and Florida, in particular, with chairman and CEO Gary Pruitt noting, “even though they represent only about a third of our total revenues, they account for a majority of our advertising revenue declines.”
However, McClatchy, like other newspaper companies, is now also seeing an ominous new trend: declines in local and national advertising, including retail. In the fourth quarter, national advertising slipped 6.8%, while retail, which accounts for a large proportion of local ad revenue, was down 2.7%.
What’s to come? More of the same, predicts CEO Gary Pruitt: “The advertising environment in 2008 does not appear to be improving. In fact, in January we’ve seen headwinds from a worsening national economy. We now expect advertising will likely be down in the low double-digit range in the first quarter of 2008.”
And a final kicker: Newspaper observer Alan D. Mutter notes that McClatchy looks like it’s on track to write off half of the $4.4 billion it spent buying Knight Ridder in 2006.
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