The fourth-quarter and full-year results repeated a familiar refrain in the industry, with big drops in classifieds, national and retail ad categories--meaning that McClatchy, like other newspaper publishers, is taking hits across the board. Classified revenues fell 35.9% in the fourth quarter and 29.6% in the full year, with employment down 40% and real estate down 37.6%. Retail advertising fell 9.9% in 2008 compared to 2007, and national fell 19.6%.
There was one bright spot: Online revenues grew 10.3% in 2008, to $181.3 million--especially noteworthy considering that most other big newspaper publishers are seeing online revenues stagnate or decline. McClatchy's online revenues contributed 11% to the company's bottom line in 2008. That's up from 7.8% in 2007, but much of this apparent increase must be attributed to the steep decline in overall revenue.
Confronting this grave situation, McClatchy said it plans to cut $100 million to $110 million in costs in 2009 with more restructuring. However, the company added that "details of the plan have not yet been finalized and as a result, costs to complete the plan are not yet known."
In part, the plans include a continuing freeze on executive salaries, no executive bonuses in 2008-2009, as well as freezing pension plans and temporary suspension of matching contributions to 401(k) plans. After the first quarter, the company is also suspending its quarterly dividend. The new measures follow buyouts and layoffs that cut about a third of the company's workforce from about 16,800 to 11,500.