24/7 Wall St.

Tribune’s (NYSE:TRB) consolidated revenues for the July (7th) period were $467 million, Down 5.9% from last year’s $496 million.  As youread through the numbers you’ll see that there is really only one bright spot, and that bright spot will have to grow mush faster to offset the rest of the carnage: Interactive.  Publishing revenues in July were down 8.6% to $319 million. Advertising revenues Fell 10.3% to $247 million.  Here is a breakdown:

Retail advertising revenues decreased 6.0% with the largest declines in the department stores and home furnishings categories, partially offset by improvements in the health care and restaurants.

National advertising revenues fell 3.7%, with declines in auto, financial and resorts.

Classified advertising revenues decreased 18.2% total. Read these and you know they have to hate Craig’s List:  Real estate -24%; Help wanted -19%; automotive -14%.  The only bright spot was, of course, Interactive Revenues at $22 million and up 11%.

Circulation revenues were Down 5.4% due to single-copy declines and continued selective discounting in home delivery.

Broadcasting and entertainment group revenues in July were flat at $147 million as a decrease in television revenues was offset by increased revenues at the Chicago Cubs and Tribune Entertainment.  Television revenues fell 3.7%, with lower automotive, movie and political advertising, partially offset by strength in the telecom/wireless and health care categories.

What is puzzling is just why on earth Sam Zell even wants to buy (or actually invest in controlling interest) Tribune.  We noted earlier this week that even with shareholders approving the deal that Sam Zell will likely lower his offering price.  It won’t necessarily be by choice either, because if you were a banker would you loan that vast sum of cash to finance a deal when the underlying business is eroding this fast? 

The carnage continues across the board and as small as Interactive revenues are they cannot offset the onslaught against print media.  This company better go out and start buying up more ‘interactive’ plays where it can.  The long hard truth is that newspaper readers are falling off faster than smokers in nursing homes.  Sad, but true.

Jon C. Ogg
August 24, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.