cos10000

Newspaper Stocks: New York Times Company, Gannett and McClatchy

This author seems confused. She bills herself as a Silicon Valley-based corporate strategist. However, her piece seems to ignore the limitations of newspapers' online business.

She neglects to mention that despite impressive percentage revenue growth online, that growth is decelerating, and is occurring off a small base. In other words, gains online are not keeping pace with losses in print ad revenue.

The author further neglects to mention that McClatchy may be cutting its dividend by the end of the year if not sooner, so it will free up cash to service its $2.1 billion in long term debt from its poorly-timed Knight Ridder acquisition. Interest expense alone has consumed 80% of McClatchy's operating income so far in 2008.

McClatchy has been scrambling to cut costs - including an outsourcing initiative to a firm in India. It also just offered buyouts to a large number of employees at the Sacramento Bee.

McClatchy and other publishers may be establishing a separate, independent business from their print product, but that business is not growing quickly enough - or profitably enough - to support the high fixed costs associated with the current print infrastructure. Profitability continues to decline, and advertisers will not pay up for the same ad online that they purchased in print.

Where was all this mentioned in the author's article?

Newspaper Stocks: New York Times Company, Gannett and McClatchy

Jay, what leads you to believe Gannett is undevalued? 80% of revenue comes from print advertising, and that revenue is declining by doub;e-digit percentage figures. Where is the growth and profitability that will drive the stock price?

Newspaper Stocks: New York Times Company, Gannett and McClatchy

notsosmart: Let me guess....You're retired, live in red-state America, and no college degree. Right?