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9 takeways from the New York Times Co. 3rd quarter earnings call

The New York Times building in this 2009 file photo. (AP Photo/Mark Lennihan)

The New York Times building in this 2009 file photo. (AP Photo/Mark Lennihan)

The New York Times Co. joined McClatchy yesterday in booking a rare operating loss for the third quarter, $9 million or about 2.5 percent on revenues of $364.7 million.

But the many moving parts of the Times digital transformation effort had a number of positives mixed in as well. Here are nine takeaways:

  1. About that loss. It was driven by high costs associated with staff reductions ($20 million) and investment in new products. The first will be a one-time blip. But the Times will be launching and relaunching new digital versions for some time to come. Each is expensive to develop and market, and significant new revenues may be slow in coming.
  2. Equilibrium in ad and circulation revenues. A 17 percent year-to-year gain in digital advertising for the quarter roughly offset a 5 percent decline in print. 
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Thursday, Oct. 23, 2014

McClatchy_Co._Logo

Tough times at McClatchy — A quarterly loss and four assets sold

McClatchy closed the books today on a rocky third quarter with an earnings report yesterday showing a small loss of $2.6 million (1 percent on revenues of $277.6 million).

But CEO Pat Talimantes instead opened the conference call with analysts offering commentary on a much bigger issue, what he described as “important events that have sealed our financial flexibility.”

An unfriendly commentator might describe those “events” as a yard sale. So far in 2014, McClatchy has sold four separate and substantial assets. The largest of them, in a deal with Gannett closed the first week in October, was a 25.6 percent stake in Classified Ventures’ Cars.com, which will bring in $631.8 million before taxes, $406 million after.

Earlier this year McClatchy sold its stake in Apartments.com (another part of Classified Ventures)  It also sold its half of McClatchy/Tribune Information Services to Tribune and the Alaska Daily News to wealthy investor Alice RogoffRead more

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Monday, Oct. 20, 2014

Gannett

Gannett earnings strong, but publishing revenues continue a steep slide

FILE - This July 14, 2010 file photo shows the Gannett headquarters in McLean, Va. Gannett Co. reported Overall company revenue growth of 15 percent. The media company said, Monday, Oct. 20, 2014. (AP Photo/Jacquelyn Martin, File)

FILE – This July 14, 2010 file photo shows the Gannett headquarters in McLean, Va. Gannett Co. reported Overall company revenue growth of 15 percent. The media company said, Monday, Oct. 20, 2014. (AP Photo/Jacquelyn Martin, File)

Embedded in otherwise excellent third quarter financial results reported today by Gannett are some sobering numbers on the continuing decline of revenues for its newspaper division.

U.S publishing ad revenues year-to-date are down 6.3 percent. At Gannett, that difference is more than made up by booming broadcast operations and freestanding digital ventures like CareerBuilder.  So revenues for the entire company are up a healthy 13.4 percent.

But I also consider USA Today and Gannett’s 81 community newspapers a reasonable proxy for the entire newspaper industry, which has stopped reporting its financial results quarterly.  If the rest of the year is roughly in line, newspapers are on track again in 2014 to lose $1 billion-plus in advertising. Read more

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Thursday, Sep. 25, 2014

WantedNewOwners-100

Papers for sale, who’s buying?

After Digital First Media’s announcement two weeks ago that it was formally putting its 76 daily newspapers up for sale, the logical next question in each of those newsrooms is “so who will I be working for? And will they cut more jobs here?”

The normal time frame from offering to completed transactions is six to nine months — pushing a likely resolution to the angst well into 2015. But there are at least three deep-pocketed prospects, who have already assembled chains of dozens of papers, bought more the last two years, and can be assumed to still be on the prowl:

*Top of the list is New Media Investment Group, a public company formed earlier this year which subsumed GateHouse Media. It owns the former Dow Jones local group and struck a deal last month to buy the Providence Journal. Recapitalized as GateHouse Media emerged from bankruptcy, New Media just announced that it is issuing $90 million more in stock, presumably to buy more papers. Read more

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Monday, Sep. 08, 2014

piano

Slovakian Piano Media acquires Press+ and aims to take paid digital content global

Only close watchers of paid digital content (paywalls) will have heard of Piano Media, a little three-year old Eastern European start-up that has steadily been adding clients. Today, Piano leaps to the front of the paywall vendor line, announcing its acquisition of  Press+, the dominant provider in the United States.

That same little company also hired Kelly Leach, publisher of the Wall Street Journal’s European edition, as its new CEO, and plans aggressive expansion into Latin American and Asian markets where digital pay is just beginning to get serious attention from publishers.

If the transaction, being described as a merger, sounds like a minnow swallowing a whale, it is. Press+, which Poynter uses to solicit donations, is 8.8 times as big in revenues, Piano communications director David Brauchli said in an e-mail exchange. The transaction is being financed by 3TS Capital Partners, a Central European venture capital firm.

Press+ founders Gordon Crovitz and Steven Brill sold their company to RR Donnelley in March 2011, but stayed on as co-CEOs.  Read more

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Tuesday, Aug. 12, 2014

WISH_TV_8

CBS prepared to play rough with affiliates over money

CBS fired an opening salvo in what could become a disruption for network affiliated television stations.

WISH TV, the LIN Broadcasting owned station in Indianapolis will no longer be the CBS affiliate starting January 1, 2015. CBS is moving from LIN owned WISH-TV to the Tribune owned station WTTV, currently the CW affiliate. Tribune also owns the FOX station in Indy.

The move will cost WISH about half of its revenue, according to one media analyst, who added it will serve as a warning to other network affiliated stations. CBS is sending a signal that it is prepared to play rough when it comes to the percentage of revenue that local stations pass along from the retransmission fees that cable companies pay the local stations. In TV terms, the money that an affiliate pays a network is “network compensation” often called “net-comp.” Side note: A couple of decades ago, networks sent compensation to local stations and it is now the other way around. Read more

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Thursday, July 31, 2014

breakup rope  on big dollar background

Splitsville: Why newspapers and TV are going their separate ways corporately

Like the sale of the Washington Post this time last year, the merger of E.W. Scripps and Journal Communications, announced last night, and their reorganization into separate print and broadcast companies came as a jaw-dropping surprise.

But the morning after, the complicated transaction makes perfect sense.

  • Local broadcasting is seeing a wave of consolidations. The business is healthy, and getting bigger provides station groups more leverage negotiating retransmission fees with cable providers. That has become a significant new source of revenue growth as political and automotive advertising remain strong.
  • Financially squeezed newspapers drag down the share price of companies with prospering TV, cable and digital divisions. The spinoff of Tribune Publishing scheduled next week and the division of News Corp a year ago give the remaining parent television and entertainment companies investment wind at their back.
  • At the same time, newspaper groups theoretically do better with management whose exclusive focus is on the particular challenges of that industry. 
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Wednesday, July 23, 2014

Gannett

If Gannett is a bellwether, 2014 will be another tough year for newspaper advertising

the sign for Gannett headquarters is displayed in McLean, Va. (AP Photo/Jacquelyn Martin, file)

the sign for Gannett headquarters is displayed in McLean, Va. (AP Photo/Jacquelyn Martin, file)

Since the Newspaper Association of America stopped reporting quarterly revenue results last year, I have looked at Gannett’s numbers as a reasonable proxy for the industry. Here are three takeaways from yesterday’s second quarter earnings report and conference call with analysts.

  • National advertising was terrible in the second quarter (down 16.3 percent compared to the same period in 2013) for Gannett’s publishing division. Despite a small gain in digital advertising and marketing services, overall advertising was down 6 percent.CEO Gracia Martore told analysts she had heard of similar weak national results from friends in the industry, as have I.  One explanation, on top of the stop-and-go economic recovery — the World Cup was an attractive advertising opportunity for big companies, and they pulled from print budgets to go heavy in social media.

    The third quarter is looking somewhat better, she said.

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Tuesday, July 22, 2014

AP F IL USA EARNS TRIBUNE

Eighteen months after dropping AP, Tribune happy with Reuters

When newspaper ad revenues were in free fall in 2008, there was much angry complaining among editors about the high cost and inflexibility of the Associated Press service. At a gripe session in Washington, one editor compared the cooperative to the USSR’s politburo.  Threats to quit were common.

In the end though, AP cut its rates, offered several levels of service and has retained the great majority of its newspaper members (who also own the cooperative and hold most its board seats).

But there was an exception.

Starting in 2009, Chicago Tribune editor Gerould Kern quietly began working with Reuters to build an acceptable substitute service.  Kern told me the Chicago Tribune ran its last AP material in March 2012.  With six other Tribune papers (but not the Los Angeles Times), it dropped AP entirely at the start of 2013.

Kern said in a phone interview that he cannot recall a single reader complaint about inferior wire coverage.  Read more

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Tuesday, June 24, 2014

nola

Advance digital makeover of its newspapers — five years in and no turning back

It seems like only yesterday, but we are closing in on five years since Advance Publications shook up the newspaper business by stopping daily publication of the Ann Arbor News, dissolving the company and reincorporating as a web-dominant enterprise.

I was reminded to take a look back at the relentless, if controversial, strategy when Advance Local president Randy Siegel released one of his regular six-month progress reports to senior executives Friday and e-mailed me a copy.  (The full text follows at the end of this post).

In the manner of such communiques at Advance and other newspaper chains, the report was upbeat, noting big increases in web traffic and digital ad sales, spiced with mentions of journalism of note and editorial prizes.

As measured by comScore, Advance’s 31 properties were up 43 percent in visits year-to-year in April and 37 percent in May, Siegel wrote, and collectively comScore ranks the sites ninth among general news sites nationally. Read more

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