Newspaper Ad Spending Rises, But A Sustained Recovery Remains Uncertain

by Paul Gough, Jan 30, 2004, 12:00 AM

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Three more of the nation's publicly traded newspaper companies on Thursday reported higher advertising revenues in the fourth quarter, although a long hoped-for, all-out newspaper recovery hasn't materialized yet.

Print advertising revenues at The Washington Post rose 3 percent to $572.2 million in 2003 compared to the year before, and increased 4 percent to $155.9 million in the fourth quarter compared to a year ago. General and preprint advertising revenues rose in the fourth quarter and full year and offset declines in classified and retail. And although classified revenue was down at The Post, help-wanted revenues actually rose $800,000 or 6 percent in the fourth quarter, even though volume was flat. It was the first rise in revenues in employment classifieds since 2000.

McClatchy, a pure-play newspaper company that publishes the Sacramento Bee and Minneapolis Star-Tribune among other dailies, also reported some possible light at the end of the tunnel for help wanted in particular and advertising in general.

"We're expecting a steady recovery in advertising revenues," Gary Pruitt, McClatchy's chairman and chief executive officer, said in a conference call Thursday afternoon. McClatchy expects a mid-single-digit increase in advertising revenues in 2004, although it would start slow with what it predicts would be low- to mid-single-digit ranges in the current quarter. Pruitt said that retail advertising was holding up and help wanted seemed to be making a recovery, although he didn't think it would turn positive companywide until the second quarter because of tough comparisons in the first quarter.

Advertising revenues rose 3.8 percent to $245.3 million in the fourth quarter, helped by a 5 percent gain in December that compared to an 8.7 percent ad gain in December 2002 when the industry saw gains in what it hoped was a sign of recovery back then. December 2003 had one less Sunday than December 2002, with a possible adverse affect on advertising revenues, as Sunday is the largest paper of the week.

December's retail advertising dropped 3.8 percent to $530.8 million. National advertising revenues continued strong, up 20.4 percent to $107.4 million compared to December 2002. And classified advertising fell 3.6 percent to $503.3 million compared to a year ago. All of the newspaper group's regions saw positive growth, with the exception of the Northwest. Minneapolis' ad revenues rose 6.6 percent to $23.83 million, California rose 6.2 percent to $28.04 million, and the Carolinas increased 4.2 percent to $11.32 million, all compared to a year ago. The Northwest was down 1 percent to $10.24 million.

Journal Register Co., which owns a string of community daily and weekly newspapers in the Northeast, saw its fourth-quarter revenue dip slightly to $104.4 million, as ad revenue was essentially flat at $76.4 million. Total advertising revenues rose slightly to $299 million in 2003 compared to $297.1 million in 2002.

In the fourth quarter, retail and national advertising were down. The Journal Register was quick to point out that three of its six regions--the capital region of New York, the mid-Hudson valley in New York, and central New England--reported increases. National advertising, which had been strong in the fourth quarter 2002 because of an airline ad campaign in Philadelphia, dropped 14.7 percent in the most recent quarter.

Yet classified advertising went the other way, up 4.4 percent in the quarter compared to a year ago. It was Journal Register's best quarterly turnout in classified advertising since 2000. Real estate was particularly strong-up 12.1 percent--but employment was up 1.9 percent as well in the quarter. That brought employment classified into positive territory for the first quarter in three years. Automotive stalled in the fourth quarter, down 4.8 percent compared to a year ago because of what the company said were last year's revved-up sales of auto ads.

These mixed results didn't change Journal Register's positive outlook for 2004. It said Thursday morning that it expects ad revenues to grow 4 percent to 5 percent companywide in 2004.

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