Various newspaper groups are likely to default on their debt and go out of business next year -- leaving "several cities" with no daily newspaper at all, says a new report from Fitch Ratings. Fitch
rates the debt of two newspaper companies, The McClatchy Co. and Tribune Co. as junk, with serious possibilities of default.
The ratings report is generally pessimistic, assigning
negative outlets to nearly all sectors, from Yellow Pages to radio and TV and theme parks. But newspapers are the most at risk of defaulting, Fitch says.
On a macro basis, Fitch
believes the world economy faces a severe global recession in 2009. While other forecasters are saying the advertising environment will be as bad as it was in 2001, Fitch predicts economic weakness
continuing into 2010 could depress advertising by 6% to 9% in inflation-adjusted terms.
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