Newspaper Print Ad Sales Fall 10 Percent
March 28 2008 - U.S. newspapers suffered their worst drop in print advertising sales since industry record- keeping began 57 years ago, hammered by the housing-market slump and competition from the Internet.
Revenue plunged 9.4 percent to $42.2 billion, from $46.6 billion in 2006, the Newspaper Association of America said today at its Web site. A 19 percent rise in Internet ads to $3.17 billion cushioned the decline.
Newspapers were squeezed by the combined impact of the slowing economy and the loss of ads to other media, such as cable television and the Web. Classified advertising led the drop, falling 17 percent as real-estate ads dropped by 23 percent. National advertising lost 6.7 percent while retail, the biggest category, skidded 5 percent.
“On top of the economy, there is a breathtaking loss of market share,” said Kip Cassino, research director at media- consulting firm Borrell Associates in Williamsburg, Virginia. “Our forecasts keep going down through 2013.”
Real-estate markets in Florida, California and Nevada have been responsible for the biggest fall in ad spending, according to fourth-quarter reports from Gannett Co., the largest U.S. newspaper publisher, and McClatchy Co., owner of the Miami Herald and the Sacramento Bee.
The housing boom that preceded the current bust may have obscured a shift toward online advertising, Cassino said. “Realtors began leaving in 2004 or 2005 and that wasn’t discovered until 2007.”
Housing Bust
Gannett, based in McLean, Virginia, fell 37 cents to $28.54 at 4:03 p.m. in New York Stock Exchange composite trading. The stock has dropped 27 percent this year. Sacramento, California- based McClatchy rose 15 cents to $10.90 and has declined 13 percent.
Newspapers’ woes accelerated toward the end of last year, as total print advertising sales fell 12 percent to $11.7 billion in the fourth quarter, according to the association’s data. The decline was the largest since the final three months of 2001, after terrorists attacked the World Trade Center and the Pentagon on Sept. 11.
The decline has continued into 2008. McClatchy’s February advertising sales fell by 20 percent in California and in Florida.
Newspaper advertising at Chicago-based Tribune Co., owner of the Los Angeles Times, fell 15 percent in the fourth quarter. Spreads on bonds of Tribune Co., left with $12.8 billion in debt after its $8.3 billion buyout led by investor Sam Zell in December, have widened this year to distressed levels.
Zell Selling
This month, Zell said he may sell one of his newspapers because of a greater-than-expected decline in revenue, the Baltimore Sun reported. News Corp. Chairman Rupert Murdoch has made a bid for Tribune Co.’s Newsday on Long Island, Crain’s New York Business said, citing an unidentified person in the newspaper industry.
Mortimer Zuckerman, owner the New York Daily News, and James Dolan, chief executive officer of Cablevision Systems Corp., are also considering bids, the New York Times reported, citing people involved in the sale.
Newspaper Print Ad Sales Fall 9.4%, Most on Record
By Tim Mullaney | Bloomberg