S&P lowered newspaper publisher Gannett's investment-grade ratings one notch, due to the company's deepening decline in year-over-year ad revenue.
"The slowing U.S. economy
will continue to exacerbate operating weakness at Gannett, when the company and the newspaper industry have experienced prolonged operating weakness from a secular shift away from print
advertising," S&P says. S&P had assumed newspaper industry revenue declines would be less than 6% in 2008, but by April, the 2008 decline was 10.3%.
One ray of hope: Gannett's geographically diverse portfolio of media properties and its internal cash generation prompted S&P to still view the company as investment grade.