Posted on 07/12/2008 10:47:28 AM PDT by abb
The shares of seven publicly held newspaper companies on Friday plunged to the lowest point in modern history in what Alan Mutter at his Reflections of a Newsosaur site calls "perhaps the worst single trading day ever for the industry."
Here is Mutter's report:
--McClatchy (MNI), Lee Enterprises (LEE), and GateHouse Media (GHS) hit all-time lows when their shares skidded respectively to $4.85, $3.11 and $1.55 in the opening hours of trading on the New York Stock Exchange.
Also hitting new lows today were:
--Gannett (GCI) at $17.42, the lowest point since 1990.
-- Media General (MEG) at $10.34, the lowest point since 1994.
-- New York Times Co. (NYT) at $13.03, the lowest point since 1996.
-- News Corp. (NWS) at $14.20, the lowest point in 52 weeks.
After scraping the bottom early in the day, the newspaper issues recovered by the end of trading to close at something higher than their record morning lows.
However, the group has lost $3 billion of value since the first of this month (not counting the $6.3 billion reduction in the value of Scripps [SSP] occasioned by its spinoff on July 1 as a standalone newspaper company).
The biggest losers on a percentage basis since the first of this month were GateHouse, whose shares fell 55.7%, and McClatchy, whose stock slid 33.2%. Double-digit drops were suffered in the period by Gannett, Journal Register (JRCO), Lee, Media General, New York Times and Sun-Times Media (SUTM).
ping
http://newsosaur.blogspot.com/2008/07/6-newspaper-stocks-hit-record-lows.html#comments
7 newspaper stocks hit record lows in 1 day
http://newsosaur.blogspot.com/2008/07/tribune-gets-payday-loan.html#comments
Tribune gets a ‘payday loan’
I’ll drink to that...
Records are made to be broken. :{)
Keep those cancellations coming. No sneaking buying off the newstand..you can get the sports news on the net.
http://www.latimes.com/news/printedition/suneditorials/la-op-cooper-frey11-2008jul11,0,3507981,full.story
Is The (Los Angles) Times really dying?
Marc Cooper and Patrick Frey agree that the paper is nearing its demise, though for different reasons.
Check out Alan Mutter’s blog about the Tribune Co. and their ‘payday loan.’ I had seen last week about the short-term loan and posted it, but had missed the fact that it was secured by accounts receivable.
The Tribune Company (LATimes, Baltimore Sun, Orlando Sentinel, etc.) is for all intents and purposes bankrupt. They’re just going through the motions now.
Yep you can get sports off the net. And some people have only bought papers for Dear Abby or crossword puzzles or other things besides the political slant. This is tough for them, because now people are going to the web to get what they want; they don’t have to take the whole package anymore.
http://sacramento.bizjournals.com/sacramento/stories/2008/07/07/daily68.html?ana=yfcpc
Friday, July 11, 2008 - 5:14 PM PDT
S&P again cuts McClatchy credit grade
Sacramento Business Journal
Reflecting “meaningful declines in revenue” and pre-tax earnings, Standard & Poor’s Ratings Services on Friday cut its corporate credit rating on The McClatchy Co. from BB-minus to B-plus with a negative outlook.
It also cut its rating on the senior unsecured debt that Sacramento-based McClatchy assumed when it acquired Knight-Ridder Inc. in 2006, from B to B-minus, and kept unchanged its assessment that creditors holding that debt are unlikely to recover more than 10 percent if there is a payment default.
S&P upgraded its assessment of recovery risk for McClatchy’s unsecured credit facility to indicate as much as 90 percent could be paid in the event of a default, and it kept the credit rating for that instrument at BB-minus.
“The (corporate credit) downgrade reflects meaningful declines in revenue and EBITDA (earnings before income tax, depreciation and amortization) in McClatchy’s newspaper publishing business and the likelihood for further declines over the intermediate term,” credit analyst Emile Courtney said in a statement from S&P.
McClatchy is likely to see 2008 revenue decline by around 15 percent, plus or minus a few points, and EBITDA decline in the mid-20-percent range for the year, S&P said. That would force changes in the terms of McClatchy’s credit line, which lenders would probably grant but which would increase interest costs.
“McClatchy’s leverage profile,” S&P said, “while strained relative to historical levels and expected to deteriorate further over the intermediate term, compares favorably with newspaper company peers’ and other highly leveraged borrowers’. In addition, we expect McClatchy to generate declining, but sufficient, levels of discretionary cash flow over the intermediate term.”
McClatchy (NYSE: MNI) publishes The Sacramento Bee and 29 other daily newspapers, many of them in markets where advertising has been hit hard by the housing downturn. Shares, which have traded as high as $28.73 in the past year, closed up 2 cents Friday at $5.09 after dipping as low as $4.85 in intraday trading.
Yet none of them are yet willing to:
1. report the news straight
2. have even a balanced editorial page.
Suicidal is the only way to describe such behavior. I know FNC has done pretty well on cable and I think the WSJ and IBD are not suffering as much as the lefty daily papers.
Maybe they can boost revenues by weaving product placements into their “news” articles, said as I sit back and draw another cool refreshing sip from my Coca-cola. They’ve perfected the art by subliminally shilling for the Democrats all these years.
Excellent point. And the stupid bastards GAVE it away for free!
Think of all the Trees that will be Saved!
Pray for W and Our Troops
Obama/Rat Congress will subsidize the newspapers...mark my words.
NewsCorp? How could Rupert’s newspaper holding drag down all of newscorp? Odd.
Marked.
We clearly need a Subsidized Fairness Doctrine for print media, don't we?
The 4th estate is a 5th column.
You said it well. They are the vanguard of the liberal ruling establishment. The difference is, they used to be able to make us pay for it. Their controlled information will have to be disseminated another way. The net is the biggest reason they can't prosper. People won't continue to pay for what they can have for free.
The same can be said for network news. Who watches those broadcasts? Only old people. I'm old and I don't watch them, because I recognize falsehood, propaganda, and brainwashing at work. But the stuff is badly done and written to the level of the films we watched in the seventh grade when I was growing up.
What's a newsstand?
Haven't even seen one in decades where I live.
You can bet they will fire & lay off everyone else before the editors responsible for the freefall.
This is especially good news to me.
I would match the America-hating, gay and illegal alien agenda-promoting, Military-hating, and Stalinist-selective-indignation of the Sacramento Bee against anything the NYT can do.
As a parent of two currently in uniform, I'm constantly fuming about how the Bee chooses not to recognize the sacrifices and successes of those who serve; but obligately cheers on our enemy with headlines when we suffer a casualty.
I think I might buy a few "put" options on McClatchy.
And they still can’t figure out why! Hello...like maybe people aren’t willing to pay for chronic doom and gloom anymore.
Marked
Yes they will subsidize the newspapers but only after they gain control of the new media.........Mark my words!
What’s a newsstand?
Here in Las Vegas news stand are boxes with lids set up all over town. Just lift the lid and get your free copies of facinating publications advertising services of the “Flowers” of our fair city.
What a great piece of news for a great Saturday. Thanks for the link!
The liberal shills for our national enemies forget the first casualties of our defeat would be our armed forces. The second casualties would be the media people. Third would be the academia eggheads. The first fight to save the second and third types who cannot recognize the real enemies.
can you graph that vs NYT???
His father was a Mutter.
The papers are fodder.
His father was a Mutter.
If he's from West Virginia, his mother might have been a Mutter.
The papers are, however, fodder.
Won’t be long, McClatchy’s debt payments will exceed cash flow and they will be forced to do ‘payday loans’ to make payroll. See the article above about Tribune Co.
Me too. Offhand, I'd say that I've been getting all my news from the Internet these last five years.
The greatest antidote to Internet B/S is one word -- SOURCE? You can't ask that of the print media.
The only pint newspapers to survive will be the local ones. Those in my small town give details I can't get anywehere else and remind me of the old "Give 'em Hell Harry" days. Lots of fireworks over the foibles of local small town politicians.
remarkable...
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003827051
The Horror! Preview of ‘Wall Street Weak’ Ahead
By Mark Fitzgerald
Published: July 13, 2008 6:00 PM ET
CHICAGO Between the Fannie Mae and Freddie Mac meltdowns, the collapse of airline industry market caps, the cratering of the financial sector, and arrival of $145-a-barrel oil, last week in the stock market was no fun for anybody.
Lost in the general media headlines, however, was the beat-down of publicly traded newspaper companies, a sickening dive of share price in the double-digits — for some, in a single trading session. Don’t blame the media. Newspaper stocks swooning is old news.
But the sector’s stock woes may get another 15 minutes of fame over the next two weeks as investors and analysts get a look at second quarter results. Bet your house: It’s not going to be a pretty picture.
First, let’s look at where the industry is.
By the definition of slipping 20% from the peak of the Dow Jones Industrial Average, Wall Street officially became a bear market last week. But given the far deeper plunge in newspaper stocks, what should they call the nightmare market they find themselves in?
Right below is where the stock of selected newspaper companies ended last week. And these results are calculated against their 52-week highs — because it would be just too depressing to compare last week’s results to the prices newspaper companies fetched when The Street loved their huge cash flows, and going-to-market strategies of being the monopoly information source of insulated smaller towns, like Lee; or of concentrating on growth markets, like McClatchy; or funding big dividends like GateHouse; or just being disciplined yet appropriately acquisitive like Gannett.
The roll call of collapse:
—GateHouse Media Inc.: Down 91.7%.
—Lee Enterprises Inc.: Down 84.1%.
—The McClatchy Co.: Down 82.3%.
—Media General Inc.: Down 68.7%.
—Gannett Co. Inc.: Down 68%.
—Journal Communications Inc.: Down 65.4%.
—New York Times Co.: Down 43.9%.
Even The Washington Post Co. — a more-or-less Wall Street favorite because it has diversified into the strong educational material sector and pointedly no longer refers to itself as just a “newspaper company” — ended trading last Friday down 34.3% from its 52-week high.
For cheerleaders for the newspaper industry, there were times during the carnage you had to laugh lest you burst into tears.
After 4 p.m. EDT trading ended Friday, for instance, I was idly scrolling the list of the biggest percentage losers of the day. Among the biggest losers, a list headed by the 22.35% drop in Fannie Mae, was the department store chain — and newspaper advertiser — Dillard’s, the 14th percentage decliner with a 14.53% fall.
I was meditating on that doleful fact, and scrolled farther down, realizing at some point that I had skipped through stocks off 12%, and hadn’t seen GateHouse, which lost 12.7% of its value Friday — the sixth consecutive trading session in which it hit an all-time low.
Then I saw the fine print on this particular list: A stock had to list for at least $2 a share to be considered. GateHouse — which leaped to $22 a share on the first day it went public in October 2006 — sank below $2 last week, ending at $1.58 Friday.
That’s kind of how it’s going with the newspaper industry. So far, the NYSE has kicked Journal Register Co. and Sun-Times Media Group off the Big Board because they fell below the requirement to cost at least $1 a share. with market capitalization of at least $75 million. On Friday you could buy a share of either company for less than a copy of their flagship papers. Sun-Times, which fell 10.42%, ended Friday at 43 cents a share. Journal Register shares cost just 15 cents. The publisher of the New Haven Register, the Daily Tribune in Royal Oaks, Mich., and 20 other daily newspapers has a market cap of less than $6 million.
Going into Monday’s trading, GateHouse’s market cap, at $91 million, was not much higher than the NYSE’s minimum requirement.
It’s tempting to think things can’t get worse for newspaper stocks.
But consider what Goldman Sachs said last week about E.W. Scripps, which at the beginning of the month spun off its more profitable lifestyle cable networks and online ventures into a separate publicly traded company. Predictably, its stock sank like a rock on the first day of trading on volume 10 times normal.
Yet Goldman Sachs issued a “neutral” recommendation on the stock, saying that, at a value of 3.8 times EBITDA (earnings before interest, taxes, depreciation, and amortization), the newspaper industry’s woes were already priced in to the stock.
The implication was that there was plenty of “downside potential,” as they say, for the rest of newspaper stocks, which are priced, Goldman Sachs estimates, at an average of 5.5 times EBITDA. (Want more doleful implications? As recently as 2006, the industry average by most estimates was 10.5 times.)
Some big newspaper stakeholders haven’t waited to bail big time. Last week, for instance, FMR LLC disclosed that it now holds just 431,000 shares of Lee Enterprises, or about 1.9% of shares outstanding. FMR had been the second-biggest institutional holder of Lee, with more than 5 million shares of Lee Enterprises, a 13.12 stake.
This week, anemic second quarter earnings reports are sure to give disenchanted investors even more reasons to dump newspaper stocks.
The 2Q season kicks off Wednesday when Gannett reports its earnings. Next up is Media General on Thursday, followed by Journal Communications July 22; New York Times, July 23; and Lee and McClatchy July 24.
There will be blood.
—GateHouse Media Inc.: Down 91.7%.
—Lee Enterprises Inc.: Down 84.1%.
—The McClatchy Co.: Down 82.3%.
—Media General Inc.: Down 68.7%.
—Gannett Co. Inc.: Down 68%.
—Journal Communications Inc.: Down 65.4%.
—New York Times Co.: Down 43.9%.
“That’s kind of how it’s going with the newspaper industry. So far, the NYSE has kicked Journal Register Co. and Sun-Times Media Group off the Big Board because they fell below the requirement to cost at least $1 a share. with market capitalization of at least $75 million. On Friday you could buy a share of either company for less than a copy of their flagship papers. Sun-Times, which fell 10.42%, ended Friday at 43 cents a share. Journal Register shares cost just 15 cents.”
Savoring the words.
Savoring the words.
Enjoying the numbers....
.....How could Rupert’s newspaper holding drag down all of newscorp......
News Corp was thrown in for spite. Note that the decline is to a 52 week low, not a many years ago low as with the others. The News Corp decline reflects the decline of the general market, not newspapers.
The fact represents strength, not weakness of News Corp
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.