Dog Days Bite Newspapers, Ad Demand Falters In August

by adam.m , Michael Deibert, Sep 19, 2005, 7:45 AM

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August has produced some mediocre results for major newspaper chains, it seems--and with a host of media concerns set to release third-quarter results in the next two weeks, the question is posed as to whether the second quarter's modest growth can be sustained.

Last week, Knight Ridder Inc., the second-largest newspaper publisher in the United States and parent company of papers such as The Miami Herald, said that declining ad sales would help force its third-quarter earnings down by an estimated 20 percent.

Milwaukee Journal Sentinel parent Chicago Journal Communications Inc. said its August revenues dropped 3.2 percent compared to the same period in 2004--coming in at $38.18 million--with circulation revenue decreasing 6.3 percent to $3.45 million, and total advertising revenue static at $14.51 million, from $14.55 million last year.

Although it saw a climb in newspaper advertising revenues (including those from newspaper Web sites) of 5.1 percent, Media General, Inc. reported total revenues for August 2005 of $69.1 million--a decline of $766,000, or 1.1 percent, from August 2004.

The biggies were by no means spared from the lack of verve, with Gannett's national newspaper advertising revenue in August was down 8.2 percent, following a 5.1 percent decline in ad volume. National volume at the local domestic newspapers owned by the company also fell--down 2.7 percent over the period.

Chicago Tribune and Los Angeles Times publisher Tribune Co. saw August advertising revenue edge up a fractional 0.6 percent to $234 million, although the Tribune's overall revenue declined 0.9 percent to $428 million.

The early results may indicate that newsprint is reflecting the fall for demand in consumer magazines in August, after months of consecutive increases in ad pages. Publishers Information Bureau (PIB) figures released last week saw ad pages for the month totaled 15,223--down 2.2 percent from August 2004, and the first such drop in seven months.

In August, the Newspaper Association of America (NAA) released figures which demonstrated that although newspaper advertisers had increased their spending on newspapers by nearly 3 percent during the second quarter of 2005, most of that growth came from online newspaper advertising sales. However, this was bad news for the still mostly print medium. Total newspaper ad revenues--both print and online--showed only a modest growth of 2.8 percent over the figures from a year before.

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