Red Ink: E.W. Scripps, 'Boston Globe' Swing The Axe

Boston GlobeThe newspaper business, lost in a whirlwind of layoffs, saw another 442 positions axed last week. E.W. Scripps Co. is cutting 400 positions from its 15 daily and community newspapers, while The Boston Globe is cutting 42.

The news of the Scripps layoffs, first reported by Editor & Publisher on Thursday, was confirmed by the publisher on Friday during its third-quarter earnings announcement. Overall, the company's revenues fell 9% due to a 17% drop at the newspaper division to $131 million, which more than offset a 5% gain at its television stations, to $76.9 million.

Richard Boehne, the president and CEO, said that in addition to cutting positions, the company is canceling dividend payments for the time being--a move long advocated by newspaper analysts who fear that publishers will not have enough cash to build online businesses.

That is a clear concern at Scripps, where online revenue fell 12% in the third quarter compared to the same period last year, to $9.1 million. Online revenues are vulnerable because Scripps--like many other newspaper publishers--had achieved most of its double-digit growth in previous years through online "up-sells" from print classified listings. As the collapse of print classifieds accelerates, there are fewer opportunities for such up-sells.

Also, The Boston Globe said it is laying off 42 employees in advertising, circulation and marketing--following 48 positions that were cut earlier this year, mostly through buyouts. The New York Times Company, which owns the Boston newspaper, is suffering from the same trends that are hurting the rest of newspaper business--including the migration of readers and advertisers to the Internet, the rising cost of newsprint and distribution, and the broader economic downturn.

In the third quarter, NYTCO ad revenues decreased 14.4%, driving an overall revenue decline of 8.9% to $687 million. Online ad revenues grew 10.2%, but still accounted for just 12% of total revenues.

In recent years, the NYTCO's New England division, which includes The Boston Globe, has been a drag on the company's already poor results. During its third-quarter earnings announcement, NYTCO President and CEO Janet L. Robinson said the company will probably take a writedown for impairment of goodwill and long-lived assets at the New England Media Group.

While the non-cash impairment charge has yet to be decided, it will probably be in the range of $100 million to $150 million, according to Robinson, who explained: "The impairment charge reflects the decrease in print advertising revenues stemming from the secular changes in the media industry."

 

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