Globe revenue dropped 12% in February

The Boston Herald reported today that the financial situation at the Boston Globe is scary. The Herald Financial Page story reads in part:

The Boston Globe dragged down the financial numbers of the New York Times Co. with a huge drop in ad revenue last month that one analyst described as "a disaster" and the worst he's seen among major U.S. newspapers.  "It's pretty nasty numbers," said Ed Atorino, managing director of investment firm Benchmark Co., referring to a 12 percent revenue plunge in February by the Times' New England Media Group, made up overwhelmingly by the Globe.... The Times Co. is apparently eyeing staff reductions and other cost-cutting measures at the Globe.

The investment house Goldman Sachs reacted negatively to the NYT's earnings report according to yesterday's newspaper trade journal Editor & Publisher,

Goldman Sachs issued a pessimistic report on newspapers' revenue trends this afternoon in the wake of The New York Times February numbers announced earlier today.  It reads in full: "We believe the February revenue report from The New York Times Co. illustrates the continued difficulty in the operating environment for newspaper publishers. Consistent with our expectations, ad revenue growth remains anemic, particularly in the New England Media Group (where ad revenue dropped 12% in February), and cost pressure continues to hurt profitability, evidenced by an EPS guidance range that implies margin contraction...

The Herald also carried a column by Brett Arends with this speculation of what is  happening at Boston Globe:

Rightly or wrongly, the question being asked in the newsroom down on Morrissey Boulevard right now isn’t whether there are more job cuts coming.  It’s how many.  “Janet Robinson was in town this week, and Arthur Sulzberger is coming next week,” as one staffer put it to me yesterday, “so it can’t be good news.”  Robinson is the Times’ CEO, Sulzberger the chairman. 

You’d be hard pressed to find any good news at the Globe right now.  Certainly not the latest financials. Nor the New York Times share price, which fell yesterday to its lowest level in nearly eight years.  Nor a warning from Moody’s that it may soon downgrade the company’s debt.

Arends went on to write in The Herald;

Globe general manager Mary Jacobus is not alone. Everyone running a newspaper knows what the future looks like: Someday, papers will all be delivered and read electronically.  But they don’t know how to manage the transition, while print-based revenues sink and online revenues only slowly creep up.  If she cuts truck drivers and printers, she’ll hurt the paper’s sales today and tomorrow. But if she cuts reporters and editors, she will damage the Web site, the future of the business....

The least valuable content? Opinion.  The blogosphere produces little news, but it is proving that anyone can produce mere vaporware.  Maybe that’s why 17 million people visit The New York Times’ Web site each month, but so far only 171,000 have actually paid up for the privilege of reading columnists like Thomas Friedman, Maureen Dowd and Paul Krugman.

Former Cape Cod Times publisher gets a promotion

According to numbers just released  for Dow Jones/Ottaway Newspapers, the parent company of Cape Cod Times, the economic outlook is at least as dire: not only the mega-loss of all Filene's advertising, but the coming recession being caused by a half billion dollars coming out of The Cape's economy to pay for increased energy costs. At Ottaway Newspapers, advertising linage decreased 9.0% in February due to declines in auto classified, non-daily, display (read Filene's) and national advertising, partially offset by a gain in real estate classified advertising.

As reported last month in the Media Daily News

In yet another clear example of the inroads online publishing is making against its traditional print counterpart, Dow Jones announced a reorganization that includes a combined print and online Wall Street Journal news operation...  The Community Media Group includes the Dow Jones's portfolio of 15 daily and 19 weekly Ottaway community newspaper properties in nine states. It will be led by John Wilcox, who was Publisher of Cape Cod Times until recently will become senior vice president of Dow Jones, president of Dow Jones Community Media Group, and chairman and CEO of Ottaway Newspapers, Inc. 

The  BlueMassGroup website reported much the same, but added,

"want more on how newspapers and the internet do or don't work together?  Check out this long and very interesting article at Editor & Publisher about the various ways newspaper  are trying to integrate the Internet into their operations... or this recent Molly Ivins' column diagnosing and prescribing various cures for what ails the newspaper industry... or this interesting Pew survey showing that local TV remains most Americans' primary news source, followed by national TV and radio, and that among Internet users the Internet comes in fourth for broadband users but fifth for dial-up users (fourth place for them goes to newspapers)."

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