• by Erik Sass , April 24, 2008

McClatchy has added its own discouraging results to the round of first-quarter figures announced by newspaper publishers. According to the company, total revenues fell 13.8% to $488.3 million compared to the first quarter of 2007. Ad revenues tumbled 15.3% to $404.0 million. The ad revenue declines were compounded by falling circulation revenues--down 5.6%--as subscriptions and newsstand sales contracted at many regional newspapers.

The newspaper business is being hit by two coinciding trends: a secular downturn in the medium, caused by the movement of ad dollars to the Internet, and a general economic slowdown that is accelerating the first process.

Newspapers are especially vulnerable to both trends because they derive so much of their revenue from online classified listings for housing and real estate, which were migrating to the Internet even before the current economic woes.

As with other newspaper publishers, Internet revenues were a relative bright spot for McClatchy--up 10.6% in the first quarter to $45.6 million. That's up from an average 2.2% growth rate in 2007.

Again, like other publishers, McClatchy is seeing the biggest percentage growth in online display advertising versus online classifieds, which are faring poorly. In fact, CEO Gary Pruitt remarked: "Excluding employment advertising, which has declined nationally both in print and online, our online advertising grew 52.1% in the first quarter of this year."

The negative overall results from McClatchy come close on the heels of similar figures from other big newspaper publishers. In the first quarter, ad revenues fell 9.2% at the New York Times Company, 8% at Gannett, and 19.1% at Media General.