Thursday, October 23, 2008

Analyst: "The bond market is voting McClatchy won't survive 5 years from now"

Another tidbit tucked inside Tuesday's 3rd quarter earnings call was this question put to Gary Pruitt by analyst John Cornright:
"... if you look at the price of your fixed income bonds, that market is saying that McClatchy’s going to have a tough go merely to financially survive in the next five years. This is a vote that you’re not going to make it. That’s what the fixed income markets are saying much less the equity markets. If you look out beyond ’09 and just assume that your revenues were to decline at a mid-single-digit pace beyond ’09, what do you do? Is the long-term answer to bring in a partner with an equity infusion in this company even if it’s a foreign partner? What’s the survival formula?"
Evidently caught off guard by the question, Pruitt's answer was little more than "well, our audience is growing."

Gulp. The fact that the CEO can't give a reassuring answer about his company surviving beyond 5 years doesn't speak well for him or the company.

Gearino read the transcript and noticed the question too.

1 comment:

Anonymous said...

The whole "well, our audience is growing." thought process is predicated on paying advertisers, having revenue to pay for advertising. With housing, auto, and retail sectors in a long term crunch, there will be no miracle on 21st street.