The third such article today on the problems facing old media, this one by the
Financial Times, focuses on the inside pressure from investors on companies to change. Shares of old media
companies have been performing poorly for the last five years, because investors don't see concrete plans for the future despite growth and profits from companies like Time Warner, News Corp. and
Comcast. Analysts say the market "senses the threat more than the opportunity." Even though the effects are not necessarily being felt yet, the writing is on the wall for these companies, and it
starts with flat or slightly declining ad growth. The best example of this is the shareholder revolt at newspaper publisher Knight Ridder, where the three principal investors in the company have
demanded that it be sold to boost shareholder value. Meanwhile, Knight Ridder's profit margins remain healthy, but ad growth has been flat and circulation declined in the last six months, leading to
the revolt. Other companies like Time Warner and VNU are also under intense pressure to acquiesce to the requests of its largest shareholders. Says one analyst: "Investors are saying that companies
have not recognized the changing world and need to sell their businesses to people who do."
Read the whole story at Financial Times »
