• Editor & Publisher, Friday, October 12, 2007 11 AM

A new report from brokerage Bear Stearns says that newspaper companies with holdings in Florida and California will see their ad sales weaken even further as the real estate downturn starts to pinch other categories. "Already struggling with the secular challenges of declining circulation and shifts in ad spending away from print, the cyclical hit of the weak housing market and the ripple effect we believe will occur into retail should continue to weigh on earnings into first half of 2008," writes Bear Stearns analyst Alexia Quadrani.

Through August, newspaper ad revenue is down 7% year-to-date, while classifieds alone fell almost 15% in the first half. Retail, she continues, is likely to be hardest hit--as consumers will probably spend less, and she predicts that Florida will feel it the most. Retail sales are apt to drop in the third quarter, leading to cutbacks in ad spending.

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