Newspapers: Bad News With One Exception (NYT)(GCI)

Newspapers continued their march into oblivion with one tiny bright spot, the internet revenue for The New York Times.

Reporting April numbers, NYT said the the internet revenue in its newspaper group rose 25.6% due to growth in both display and classified advertising.

Revenue at the company’s papers was awful. It is hard to imagine that the NYT operations in Boston, lead by the Boston Globe, can make any money at all. Advertising revenues for the New England Media Group decreased 12.0%

At least things at the company’s franchise paper were a bit better. Advertising revenues for The New York Times decreased 0.7%. At the NYT regional papers, ad revenue dropped. 16.4%.

All of the numbers show that the Times would certainly be better off selling or spinning-off its operations outside the New York City area. None of these other properties has enough of an internet presence to recover.

At Gannett, the nation’s largest newspaper chain, revenue for April declined almost 9%, and advertising sales were down 10.4% at the print paper operations. The housing downturn hit the company particularly hard. Classified real estate revenues declined 23.8 percent.

The data out of both companies should have some ripple across the entire industry. It is certainly bad news for chains with large amounts of debt, especially McClatchy (MNI) and Journal Register, which was recently delisted from the NYSE. It has become hard to make an argument that either company can make debt service as advertising continues to drop across the sector.

Douglas A. McIntyre