• Advertising Age, Tuesday, February 24, 2009 9:15 AM

Even as they suffer from the recession and digital media, newspapers still earn decent profits, especially papers outside of big cities. Publicly owned newspapers averaged an operating profit of 10.8% in the first three quarters 2008, says industry analyst John Morton.

Newspaper owners, on the other hand, are posting huge losses and struggling to make payments on debt they took on under projections that didn't pan out. But that's no reason for newspapers to stop the presses.

McClatchy, for instance, is struggling under more than $2 billion in debt, much of which it assumed in 2006 to buy Knight Ridder. But the publisher of papers including the Sacramento Bee and the Fort-Worth Star Telegram just delivered a 21.5% operating profit margin when excluding interest, taxes, depreciation, amortization and charges, such as severance. The nation's biggest newspaper publisher, Gannett, produced an 18% operating profit margin last year, excluding one-time charges such as severance and write-downs.

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