Time Out: Media General Institutes Furloughs
2011 is shaping up to be another crappy year for newspapers, with more reports of financial woes, layoffs -- and now another round of unpaid furloughs. Media General, publisher of 21 daily newspapers including The Tampa Tribune and Richmond-Times Dispatch, announced that it will require employees to take 15 days of unpaid leave in the second half of 2011.
CEO Marshall Morton acknowledged that the move "will cause financial disruption for employees and scheduling challenges for our operations."
Morton echoed the sentiments of other newspaper executives in his memo to employees announcing the furloughs, writing that "the much anticipated economic recovery continues to be unevenly felt across our markets, and, more recently, the economy has faltered."
However, it's open to debate whether the continuing financial difficulties of newspaper publishers like Media General can be attributed primarily to the slow economy, or are simply due to a long-term secular decline in the print newspaper business and the rise of digital media.
On that score, Morton acknowledged that "while new revenue and Web site growth initiatives have been successful, these efforts have not produced enough revenues to offset declines in our traditional lines of business."
From 2006-2010, Media General's total revenues have declined from $964.9 million to $678.1 million, for a 30% drop in four years. In the first quarter of 2011, total revenues declined 6.2% to $148.9 million.
The decline in Media General's newspaper publishing division has been even steeper, with total revenues falling from $601.1 million in 2006 to $328.4 million in 2010, for a 55% decline over the same period.
The weak performance of Media General's newspaper division has been mitigated somewhat by its broadcast TV properties, but TV advertising is expected to suffer this year as well, due to the absence of Olympic and political advertising. Moreover, the broadcast TV environment in general is getting tougher. Looking at the long-term, broadcast revenues have slipped 10.5% from $343.1 million in 2006 to $306.8 million.
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