(Chicago) Sun-Times Group Loses $169 Million In Q3 (Dinosaur Media DeathWatch™)

Editor & Publisher ^ | November 6, 2008 | Mark Fitzgerald

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Sun-Times Media Group Inc. reported late Thursday a net loss of $168.8 million, or $2.04 per diluted share, narrowing slightly its loss of $192.4 million, or $2.39 per share, from a year ago -- but forcing the company to impose a new round of deep cuts, its CEO said.

Last summer, the publisher of the Chicago Sun-Times and dozens of other Chicago-area papers completed an extensive round of expense cuts by reducing staff by 19%, outsourcing distribution, and cutting the physical size of its newspapers.

"In the first half of 2008, we successfully implemented a $50 million annual cost reduction, which we expected would stabilize the company's cash flow. It didn't," CEO Cyrus F. Freidheim Jr. wrote to shareholders. "We have developed and are implementing another major cost reduction program of $45 million to $55 million. We expect to implement these actions during the next nine months. In total these two programs are expected to reduce our cost base by almost 30 percent. Our goal is to be cash flow neutral while preparing for a future economic rebound."

Freidheim said the company's cash position shrank by $16 million in the third quarter, and stands at $99.8 million, excluding another $10 million in Canadian asset-backed securities it has been unable to redeem because of the collapse of that market.

Operating losses at Sun-Times widened to $227.8 million in the third quarter of 2008 compared with a year-ago operating loss of $23.2 million. The 2008 results include a non-cash goodwill impairment charge of $209.3 million reflecting accelerated revenue declines and the precipitous fall in its market capitalization. As its stock collapsed to pennies per share in the past year, its market cap has tumbled, too. At close of trading Thursday, Sun-Times shares (OTCBB: SUTM) were priced at 10 cents, and indicated a market capitalization of just $7.81 million.

Ad revenue in the quarter fell 18% to $59.1 million, Sun-Times said. Classified advertising revenue dropped 21%, retail was down 13%, and national off 24%.

Sun-Times also became the latest newspaper company to report a drop in Internet advertising revenue. It said Internet ad revenue fell by 2%. It represented 5% of total ad revenue for the third quarter.

In his letter to shareholders, Freidheim responded to the suggestion made earlier this week by Davidson Kempner Capital Management LLC, owner of a 5.9% stake in Sun-Times, that the company cut its board of directors to five members, replacing four with Davidson Kempner nominees, keeping one present director, and eliminating the others, including Freidheim.

"The board intends to consider this request with full consideration of its fiduciary responsibility to act in the best interests of all shareholders and its other stakeholders," Freidheim wrote. He also said the company continues to explore strategic alternatives, including a sale and deregistering as a public company.

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Friday morning good news.

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ping

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http://poynter.org/forum/view_post.asp?id=13690
SF Chron ends Service Awards Program

http://www.mediapost.com/blogs/on_media/?p=294
Future Growth Depends On Serious Change

[Elvina]

Will they get the message? No! Good riddance. We can all find something else to line our birdcages with when they become totally obsolete.

[RU88]

Have no fear. Zero is primed to bail out his mouthpieces.

[Zakeet]

And the Tribune (Barry's other hometown rag) has a huge balloon payment (about 3.5 billion IRRC) due in about eight months -- and nobody is willing to buy either WGN or the Cubs for anything like what it would take to fund the note -- and the banks won't refinance ...

Looks like the Daley Machine might soon be without two of their largest cheerleading house organs.

[Old Grumpy]

“Friday morning good news.”

Yep. Another one is biting the dust. In increments.

[scooby321]

Bailout time.

[CARTOUCHE]

But, but, nut, where is the recycled paper going to come from for my McDonald’s sacks (that by the way are nigh on functionally worthless as well)?
If’n I were a greenie I’d say that there will a gazillion trees saved by this and millions of gallons of diesel not consumed in getting the rolls of paper to the printing presses. And soy ink goes out of business and the soy beans go back to where they belong, in the food chain.

[mdmathis6]

“Future Growth Depends On Serious Change”

They have to start telling the objective truth, then we’ll start buying newspapars again!

I don’t buy that it’s internet changes that are damaging the
the MSM. People will even buy internet subsciptions if they feel the news is trust-worthy. The dirty little secret is that it’s conservatives that are the main supporters of news media...if they distort the news, they lose conservatives!

[PugetSoundSoldier]

Exactly. There will be a big stimulus/funding package for the MSM since they are “an integral part of our nation”, and thus are “too big to allow to fail”.

Then the Marxist Messiah will implement the Fairness Doctrine (under another name, of course) and FORCE more consumers to the MSM as alternatives are methodically shut down...

Have no fear, the MSM will only lose money for the next 2-3 quarters, then it will get its Government largess and mandated viewership so it can jack back up advertising rates and become profitable again...

[sirchtruth]

What I find so interesting is not only are the DBM losing customers from the republican side, they are also losing people for whom they are so blatant biased for and trying to protect! I had a conversation recently with a staunch looney liberal (DU type) who said the media was a republican clamorous propoganda machine!

I literally LOL uncontrollably at her inane comment and the people standing around who heard her started laughing too!

[phothus]

Good thing these Bozos decided to hound Conrad Black all the way to jail. Although, he’s a decidedly difficult guy to get along with, he’s still one of the few people in the world who could make money from a newspaper.

[abb]

http://cancelthebee.blogspot.com/2008/11/rumor-new-round-of-layoffs-at-kansas.html
Rumored: new round of layoffs at Kansas City Star to be announced next week

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http://www.adweek.com/aw/content_display/news/media/e3i798ea20fcf86512a92553eff6ec0d5e8
Disney Reports Record Revenue, Sees Rough Road Ahead
Softness in TV ads, theme-park bookings cause ‘sobering outlook’

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http://recoveringjournalist.typepad.com/recovering_journalist/2008/11/how-many-newspaper-execs-does-it-take.html
How Many Newspaper Execs Does it Take?

http://online.wsj.com/article/SB122601717105106935.html

Hollywood Rewraps The Holidays
Facing a dark economic forecast, the movie industry is shuffling release schedules and banking on the drawing power of Brad Pitt, Tom Cruise and Will Smith. It’s placing some risky bets.
By PETER SANDERS and LAUREN A.E. SCHUKER

Some of the season’s biggest films, clockwise from top left: “Australia,” “Madagascar: Escape 2 Africa,” “Quantum of Solace,” and “Seven Pounds.”

Can Hollywood deliver the goods this holiday season for an economically drained, election-weary public?

To lure filmgoers, movie studios have spent the past few weeks rearranging release schedules for their holiday films to avoid bruising matchups and find weekends without too much competition. The end-of-year period includes some epics — including Paramount Pictures’ “The Curious Case of Benjamin Button” and Twentieth Century Fox’s “Australia” — which will test the public’s appetite for drama on a very large scale.

View Interactive

And then there is the problem of Harry Potter. The famed wizard was originally slated to reappear in theaters on Nov. 21 in the sixth installment of the blockbuster film series. Instead, Warner Bros. decided to risk the ire of fans and delay “Harry Potter and the Half-Blood Prince” until next summer to fill a hole in its 2009 slate.

Harry’s disappearance set off a frenzy of adjustments, as rivals scrambled to take advantage of the newfound elbow room. Summit Entertainment slipped “Twilight,” its film adaptation of Stephenie Meyer’s teen-vampire novel, into Potter’s slot, moving it up from its initial Dec. 12 release.

snip

[Natty Bumppo@frontier.net]

Does anyone know of a mutual fund that invests only in put options and short sales of Dinosaur Media with the portfolio weighted by the liberal bias of their editorial page?

Such a fund is about the only investment that will produce sufficient positive returns in the next four years as to let me make at least a down payment on “That One’s” tax increases.

[drzz]

These jerks of the Tribune supported Obama. They can die now.

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ping to post #16

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http://www.chicagotribune.com/business/columnists/chi-fri-phil-rosenthal-7nov07,0,2696600.column
3rd-quarter losses signal more cuts at Sun-Times

http://uk.news.yahoo.com/22/20081107/tbs-uk-media-results-b99ff97.html
No end in sight to misery for ad-dependent media

http://www.medialifemagazine.com/artman2/publish/Media_economy_57/Expect_Obama_to_get_tough_on_media.asp
Expect Obama to get tough on media
His FCC is likely to oppose further easing of rules

http://www.spectator.org/archives/2008/11/07/the-newspaper-belongs-in-the-t
The Newspaper Belongs in the Trash