Posted on 01/10/2008 5:14:58 AM PST by abb
NEWSPAPERS WILL TAKE IT ON the chin in 2008, according to analysts with Goldman Sachs, who warned Wednesday of a potential double-whammy, as the industry's secular downturn converges with a broader economic slowdown. Overall, they forecast a 7.9% decline in revenue, a much more substantial drop than their earlier prediction of just 2.6%. The predicted 7.9% drop is especially gloomy as it comes after several years of losses, compounding a 1.8% decline in 2006 and a roughly 8% drop in the first three quarters of 2007 compared to the same period in 2006 (fourth-quarter figures aren't yet available).
As always, the collapse in classifieds leads the way. In a note to clients, GS said: "We expect the classified categories to be very weak with the real estate, help wanted and auto categories particularly sensitive to broader economic activity." All three categories are also suffering from intense competition from the Internet.
The downturn in the housing market has led to a meltdown in real-estate classifieds in particular, with overall real-estate classifieds falling 24.4% in the third quarter of 2007, compared to 2006. Recruitment is down 19.7%, and automobiles 17.7% in the same period.
As a result, GS cut earnings forecasts for the New York Times Company, McClatchy, Gannett, Belo, Journal Communications, and E.W. Scripps.
ping
Really going out on a limb with that one.
LLS
Couldn’t happen to a nicer set of folks. On my priority list for business collapse and, hopefully, future extinction:
1) New York Times
2) Los Angeles Times
3) Boston Globe
4) Atlanta Journal Constitution
5) San Francisco Chronicle
6) Houston Chronicle
... and then my wish is that the others get bought out by right-wing, union-busting businessmen who send the leftist journos packing.
May the trend be so bad, that 2007 will be looked at as the last “Good” year for these bastards.
I predict maybe double this. I think the acceleration of this decline will be higher than expected.
I hope the prediction is understated.
What does GS stand for? I thought it was George Soros but that doesn’t really work in your statement.
Don’t discount the effect of incompetent management on these companies. They have allowed their ad departments to collapse, then the gut their content because they can’t sell enough ads.
Maybe it is just the bad advertising market driving good salesmen to other fields, but the ad salesmen I deal with are just awful. If someone wants to buy an ad, CALL THEM BACK.
A friend wanted to place an ad in a specific print publication. He called repeatedly, but no one would call back until after the ad deadline.
Sorry... Goldman Sachs.
LLS
Note to self, read the headline. Duh!
GS is the outfit that engineered the Mexico debt bailout to save Robert Rubin. You’re exactly right.
:-)
LLS
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