Monday, October 27, 2008

Alan Mutter calls out McClatchy's flim-flam man

Alan Mutter takes McClatchy's CEO Gary Pruitt to task for talking nonsense about McClatchy's chances to revive.
Not once, not twice but five times, Gary Pruitt, the chief executive at the McClatchy Co., told stock analysts that the sagging sales and profits at his company are the result of “secular headwinds” which evidently will abate at some point to enable his business to revive.

Here is the phrase used in a sentence, as transcribed by Seeking Alpha: “We may be facing secular headwinds for quite a while until the revenue market settles in terms of the Internet being a more mature medium.”

By definition, a secular move in an industry refers to a permanent and fundamental shift, such as the change in consumer preference to automobiles from horses and carriages.

The ups and downs of the economy do create headwinds for business. But a secular change is more like gravity. Unlike headwinds, which eventually blow over, gravity is here to stay.

For the record, the secular forces dragging down newspapers are: Declining readership, shrinking advertising, high fixed costs and growing online competition that makes it increasingly difficult to charge the premium ad rates that were possible prior to the Internet.

The question: how much longer will McClatchy's board tolerate a Flim Flam Man as CEO?
Pruitt's lame answer to a tough question means it should be "Golden Parachute Time" at McClatchy

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