Insane Analyst Says Newspaper Decline is "Cyclical" (NYT) (Dinosaur Media DeathWatch™)

Silicon Alley Insider ^ | December 13 2007 | Henry Blodget

[Milhous]

There are two schools of thought on the declining newspaper business:

1. The right one, which thinks the dead-tree-distribution business is dying as readers move online and alternative news and advertising options proliferate, and
   
2. The crazy head-in-sand one which thinks the awful performance of leading newspaper companies over the past few years is just the result of the housing bust.

CSFB's newspaper analyst John Klim appears to be a card-carrying member of the nutbag school. He argues that newspapers' recent troubles are mostly cyclical (2/3) and that newspapers are in a great position to benefit from the transition to digital media.

All newspapers have to do, Klim says, is "transform themselves from lumbering dinosaurs into nimble, multiplatform information providers capable of reaching customers in print, online, or by mobile download." That's not all they have to do--they also have to get tens of million of new users who already get much of their news elsewhere--but Klim tosses this transition off as though it's the equivalent of losing 2 pounds.

Klim is no dummy: He has ensured that he and CSFB's investment bankers will be hailed as heroes in the offices of newspaper investors and executives everywhere, and newspaper stocks rose on his call. Alas, he has also ensured that other observers of the newspaper business will be forced to conclude that he's a wack job.

[Milhous]

The Washington Post Company (WPO) recently followed Scripps' (SSP) lead to beat a path out of the newsprint industry. 9/2007 Z-scores indicate that both companies enjoy 2-4 times the financial strength of most competitors.

	NYT	WPO	NWS	MNI	GCI	SSP	LEE	JRE
Z Score 9/2007	1.835	4.118	2.139	0.812	2.755	4.137	1.282	0.752

Deutsche Bank noted that about 80 percent of The Post Co.'s profit-creating businesses -- almost everything but the newspaper -- have not been affected by the economic slowdown.

[Milhous]

ping

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Coral Ridge Ministries, proclaiming truths that transform the world.

[conservativehusker]

Cyclical..riiiiight...these same folks use a small snapshot in time to diagnose Global Warming as man made when it IS proven to be cyclical but the man made downturn of the newspaper is real...heck even Igor(?) in Ghost Busters said print is dead 20 years ago.....

[Greg F]

Durr. Stagecoaches have been in a heckuva down cycle. Invest now because the upside is massive.

[Grampa Dave]

Not surprising bs from a firm with a history of BSing its clients and more:

http://search.yahoo.com/bin/search?fr=ybr_sbc&p=Criminal%20investigations%20of%20csfb

[Milhous]

So it turns out that the old grey corpse in Pinch's cellar touts a bucket shop operator. Thanks for sharing.

[Grampa Dave]

Thanks, we/I learn something everyday like “What is a Bucket Shop?”

[GOPJ]

Thanks for the ping.