McClatchy Ad Revenue Down 9.8% in 3Q

The McClatchy Company, the third-largest newspaper owner in the country, reported Tuesday that ad revenues dipped 9.8% in the third quarter of 2007 to $457 million. Net income fell from $52.6 million to $23.5 million over the same period a year ago, a 44.6% drop.

The losses were mostly due to continued declines in the main print classified ad categories: housing, down 27.4%, automotive, down 19.2%, and employment, down 22.4%.

Increases in online classifieds revenue were not sufficient to offset these drops, with combined print and online revenues still falling by double digits. The downturn in real-estate markets in Florida and California hit McClatchy particularly hard, accounting for 68% of the lost ad revenue, according to CEO Gary Pruitt.

Yahoo has been using stories from McClatchy's newspapers in April; it began an expanded effort two weeks ago, but has yet to impact revenue, said McClatchy's Vice President for Interactive Media Christian Hendricks. McClatchy's online ad sales rose 1.4 percent to $41.6 million in the quarter, the company said.



Like other newspaper companies, McClatchy is enduring losses on multiple fronts as retail and national revenues also drop. Combined print and online retail advertising fell 3.1% to $204.3 million in the third quarter, while national fell 12.3% to $41.7 million.

Overall, Pruitt offered a bleak forecast for the rest of year, predicting continuing declines into the fourth quarter. Even more ominous, he admitted: "We do not know when this downturn will end, and do not have visibility beyond the fourth quarter."

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