McClatchy’s Revenue Decline: A Tale of Two Markets?

McClatchy recently announced revenues in the third quarter 2007 were $540.3 million, down 9.2% from revenues of $595.1 million in 2006. The downturn was mostly the result of the real estate market slump in Florida and California.

Bill Vincent, business manager of Dallas/Ft. Worth’s La Estrella tells Portada that “McClatchy's results are very tough, but not unexpected. This reflects a definite trend of the entire newspaper industry in the general market, because of reader movement to online news sources.  This trend means, and will continue to mean, decreased ad linage, which negatively affects bottom line and stock prices.”

Are McClatchy’s Hispanic properties faring better than its general market properties?

In Vincent’s opinion, the McClatchy results do not directly correlate to the performance of the Hispanic properties.  Each of the 3 properties accepts sales from their parent newspapers (The Sacramento Bee, Fort Worth Star-Telegram, Miami Herald).  So when major advertisers cut ROP and preprint orders to our parent newspapers, often an easy and quick place to cut is "ancillary" buys (niche papers, weekly community papers, etc.) .  And since from that perspective we are considered niche and ancillary, we in Hispanic print have lost sales that normally come from our parent companies.   Our local retail ROP business is up considerably, but we have taken a big hit in National and Classified advertising linage.  The 4th quarter appears to be trending the same way.”

Part two of this article will appear on this week.

Related Article: Strong Demand for Weekend Advertising Prompts New Strategy for La Estrella