Gannett 4Q: Revs Drops 22.7%

The drumbeat of bad news for newspapers continued Friday with Gannett Co.'s announcement that print advertising revenue dropped 22.7% in the fourth quarter of 2008, compared to the same period in 2007, from $1.2 billion to $963 million.

The decline drove an overall decline of 10.5% in operating revenues, which fell from $1.9 billion in the last quarter of 2007 to $1.7 billion in 2008. For the full year 2008, Gannett's total operating revenues came in at $6.8 billion, down 9% from $7.5 billion the year before.

Gannett pointed to the usual culprits for the steep fourth-quarter declines. At U.S. community papers, classified revenues fell 30.7%, due to a 32.9% drop in real estate, a 46.5% drop in employmen and a 25.7% drop in automotive. These drops were amplified by a 13.9% drop in retail ad revenue and an 18.2% drop in national ad revenue. Thus, Gannett--like most other big newspaper publishers--is taking double-digit hits across all three of its core print advertising categories.



Total ad revenues at flagship USA Today, which relies on national and retail advertising, were down 18.5% in the fourth quarter.

As a result of dismal results in 2008, Gannett also announced Friday that it is taking a non-cash impairment charge of between $4.5 billion and $5.2 billion on an after-tax basis. Craig Dubow, Gannett's president, chairman, and CEO, tried to adopt a reassuring tone: "The impairment charges, while significant, will not impact operating cash flow, our ability to pay down debt or the way we will operate the company going forward."

The Gannett revenue release followed similar results from the New York Times Co. earlier in the week. NYTCO said total news media ad revenues in the fourth quarter fell 18.4%, compared to the same period in 2007. Earlier in the month, Lee Enterprises said total advertising revenues fell 15.2% in the fourth quarter.

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