No hope

After a hopeful post, time for the dark side. There’s so much darkness just today:

* The New York Times Company’s results are just awful: Ad revenues in the news group down 21.8%. Ad revenue for the Times down 21.2% Ad revenue for the Boston group down 23.3%. Internet advertising down 4.0%. Ad revenue for About down 3.5%. If you want to see good news, I suppose you can find it here: “In total, Internet businesses accounted for 12.1% of total revenues in November versus 10.7% in November 2007.” But that likely means that print is falling faster.

* McClatchy shares hit 60 cents yesterday. As I write this, it’s up to a big 78 cents. Bubble! Gatehouse hit 4 cents (and I’d still short them given their current attitude); market cap: $2.3 million. See Alan Mutter’s excellent analysis of how debt did in papers. I’d say it’s more than that: It was misplaced optimism in the form and in the incumbents. If these papers had instead taken on debt to innovate and create or to buy innovates (a la the New York Times buying About), that might have been productive. Instead, they bought newspapers, which was only an indication of how snug their blinders were.

* In the U.K., Guardian editor Alan Rusbridger (my boss) continues to beat the funereal drum about local papers there, telling BBC Radio 4: “I think we have to face up to the prospect that for the first time since the Enlightenment you’re going to have major cities in the UK and western democracies without any kind of verifiable source of news.” Hear him here.

* For the first time, according to Pew, the internet as surpassed newspapers as a primary source of news for the public. In the whole population, TV is still No. 1 (I suppose that’s cause for depression), but among young people, under 30, the internet has tied TV. But then again, that wouldn’t be bad news at all so long as newspapers become digital and become part of that trend rather than killed by it.

  • Jeff,

    I think that last bit, from Pew, is great news twice over.

    First, it shows that user and publisher efforts over the past 13-15 years to build the internet into a news medium have been largely successful.

    Second, it is yet another crisis moment to help slap the biz awake so that it can, finally, admit that the paper is a noble – but certain – part of its past.

  • barbara raab

    Jeff,

    Do you really HAVE TO slam television news? Not all of it is bad. And god knows there are quite a few truly BAD newspapers out there. I’d wager that there are as many decent-to-excellent t.v. newscasts out there as decent-to-excellent newspapers (in this country, that is).

  • Foobarista

    Where are the good TV newscasts? Whenever I flip on my local stations, it’s a couple of “top stories”, with graphic video, followed by several chucklehead sessions and “heartwarming” spots in which stupid animal tricks figure prominently, and finally, the only thing anyone cares about: sports scores and highlights. They’ll slip weather in there too at some point.

    I can cover all the “news” from this telecast after seconds of browsing Yahoo or Google News and Sports.

    And Youtube has far better stupid animal tricks.

  • Can’t resist a TV joke, Barbara. I’m put in a bad mood by the combination of local-news weather and Christmas-shopping stories.

  • It’s all good news to me (apart from the McClatchy bubble, but hopefully that will only be temporary).

    Newspapers provide negative information — that is to say, a person who reads a newspaper is less well informed than one who does not. With their accelerating demise, we might hope that for the first time in history, major cities in the UK and western democracies may no longer be dominated by the propaganda and misinformation spread by dishonest and incompetent journalists.

    The end of newspapers is not a tragedy — it is a liberation.

  • barbara raab

    Won’t argue with you about local t.v. news, Jeff. Most of it stinks, especially in the network owned-annd-operated markets, where the station news divisions have been treated as nothing more than cash cows ever since the late 80s. Interestingly, the best local newscasts I’ve seen in the past 15 years have been those in teeny tiny markets (i.e., Huntington, W.Va.), where, although the resources are meager, the effort to serve the community seems truly sincere. I can’t claim the reporting is deep, and maybe in the end that’s all that matters, but I was impressed by the lack of fluff and junk — the sense that TRYING to do “real journalism” was the goal.

    Happy holidays to you and your family!

  • Also, Lee Enterprises (who purchased the Pulitizer chain for debt) closed at $0.35 — down from $49.00 just four years ago… They’ll probably get de-listed soon and are good candidates for the next newspaper bankruptcy.

    bob wyman

  • invitedmedia

    should know more about lee when (if?) it files its (delayed) 10K “by 12-29-08”.

    lee, based in iowa, publishes the 100+ year old paper on kauai ( thegardenisland.com ).

    wtf.

    miles wide, inches deep

  • I get so fucking tired of correcting you, Jeff. Has it *ever* occurred to you to do some reporting — like asking questions of those involved — before pronouncing such apocalyptic conclusions?

    It’s perhaps more than interesting that you so frequently refer to blinders; I’ve never read an analyst who is so consistently, persistently wrong about basic facts.

    Yes, the stock price sucks. As you know (or should) that reflects Wall Streets’ analysis of our prospects. And we all know those are some smart guys who always get it right, huh? To cite stock price as a definitive measure of performance is as bad a sin as those who ran their companies mainly to maximize stock price.

    This much is clear: When McClatchy demonstrates, as it will, that it is coming out of the the downturn/transformation challenge whole, that price will rise again.

    Yes, debt is tough to manage when revenues fall. No shit. But I guess you refer to Alan Mutter’s analysis as “excellent” simply because it confirms your beliefs. It’s anything but excellent. It’s very thin soup, persuasive only to people who know less about these issues than he does.

    He opens by lumping all the news companies together and saying “The details in each case may be different. But the story is the same.” Nothing could be more wrong. It’s *all* about the differences. To equate the Tribune’s debt with McClatchy’s KRI debt is simply looney. Stop repeating this trash; it makes you look stupid.

    Your post is entitled “No hope.” Bullshit. McClatchy remains a strongly profitable company (you can look it up at the SEC). It’s never missed a payment and isn’t about to. Lehman Bros failed; GM is failing; even in the same economic climate, McClatchy is not. There is much hope.

    Online sales and revenues continue to grow at double-digit rates. Our percentage of revenue from online leads the industry (excluding, perhaps, the national papers) and continues to grow. Perhaps more importantly, the company is so much more efficient now than two years ago (to the tune of some $350 million in reduced expenses) that it doesn’t have to return to anything like historic margins or revenues to be successful.

    You know that I have long offered to wager $1,000 on McClatchy’s prospects with anybody who doesn’t believe me. Let’s make it personal, shall we? Show me your money, Jeff.

    Because you’re wrong. Consistently, persistently wrong in a way that hurts thousands of McClatchy employees who are working hard every day to advance the interests you profess to believe in but routinely dismiss with a shrug and near-total disregard for facts or reporting.

    Stop it.

    \-\/\/

    P.S. Re Pew: The internet IS NOT a source of news; it’s a delivery system.

  • My response to Howard on his blog:

    Howard,

    It’s Christmas. Can you at least talk civilly on Christmas.

    I’ll take your bet if we agree to definitions and terms – what is success?

    But first answer this: Was buying Knight Ridder smart?

    My argument in this post is that having too much optimism about paper as paper is what led McClatchy to make what is turning out to be the disastrous acquisition of Knight Ridder. Those are the blinders to which I refer. They’re made of paper.

    I’ve heard your CEO speak more than once and even though this makes you mad, I did hear him talk for far too long about the strength of papers as papers and about the change being cyclical. If he has seen the light, the question is whether he has seen it in time.

    The thousands of employees who are going to be hurt are those who are laid off to deal with issues of the debt and those who had their pensions in the company’s stock. My opinion is not what’s hurting them. And this is about differing opinions Howard.

    P.S. The internet is not a medium. Paper is a medium. The internet is not.

  • The discussion continues on Howard’s blog.

  • invitedmedia

    “wall streets’ analysis” doesn’t declare a .36 dividend on a (then) $2 stock, oversee a balance sheet gone wild or report >$15 per share in losses, that’s mgmt’s job.

    nice job!

    p.s. ‘howard’ reminds me of pete waldmier

  • MovingTarget22

    Weaver wins his bet on McClatchy’s future if the company is still in business in a year. Shareholders, who have lost millions of dollars, and thousands of ex-employees, who have lost their livelihoods, might like a success target that is held a little higher. If the company had such a clear vision of the media future in 1995, as Weaver blogs, then why did it buy Knight Ridder at the top of the market in 2006? That mistake makes Jarvis’s point about the company being fatally focused on paper products.

  • Walter Abbott

    Jeff and Howard,

    My prediction is that McClatchy Co. (MNI) will seek bankruptcy protection sometime within the calendar year 2009. Lee Enterprises (LEE) will likely do the same.

  • Bo Stukes

    ….McClatchey people laughed when Bush had a shoe thrown at him…that was enough for me…I can’t wait for those smug jerks to lose their jobs….I look foreward to MNI’s demise….our local MNI paper is the Charlotte Observer….its editors just chant the NY Times anti-American mantra anyway….why buy it?

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  • G.May

    What did Howard do with his own shares of stock of McClatchy?

  • A small aside concerning TV news…

    …for two years or so now (more or less since YouTube took off and Flash became universal) I have stopped using the term “TV news” preferring “video news” instead, television being merely one platform (and a diminishing one at that) on which video is seen. In February when the broadcast TV signal switches to digital, the TV platform is likely to subdivide further as some content (sports, movies, specials) becomes tailored for HDTV wide screens and other (news, weather, traffic, talk, clips) for tiny mobile devices.

    Video news is being produced, more and more, by journalists who do not work in television and journalists who do work in television are producing more and more video news that is not seen on TV. The categories in Pew’s survey are starting to make less and less sense. Pew has “Internet,” “Television” and “Newspapers” as three separate categories…but how are respondents supposed to reply if they streamed TV-produced video coverage of a story from a newspaper’s Website. According to Pew’s questionnaire, which was their source of news?