1) Another round of layoffs by March 2009
2) Ann Caulkins and/or Rick Thames will “resign to pursue other opportunities”.
3) The uptown HQ for the Charlotte Observer will have a “for sale” sign before the end of 2009.
4) Home deliveries will be reduced to 3 days per week, similar to the strategy recently adopted by Detroit newspapers.
All 4 predictions seem reasonable to me, what do you think?
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7 comments:
The Sacbee analyzes 'the bottom' as usual. Bottom feeding is nothing new to them. Now we have it, the bottom dropped out because of shareholder panic.
Sacbee Business:
"December 18, 2008
The 52-Week Low Club: (MNI) (McClatchy Newspapers Drops to $.98 as shareholders panic) …..(What appears to be a wave of panic-driven selling…)"
Douglas A. McIntyre
"Panic" is the right word.
I don't see McClatchy making it much past mid-year next year. The lenders will wring as much cash flow as possible for as long as possible.
Then they will cease publication. The only value left will be the dirt on which the scrap iron printing presses sit.
Newspapers always thought they were in the "news" business.
Wrong.
They were in the business of delivering advertisements to potential customers for businesses willing to pay for that service. They did this via a print-on-paper system invented 500 years ago.
That system was the only one that could broadcast a semi-permanent advertisement. Radio and TV ads are instantaneous and once you see/hear them, they are gone.
They had a monopoly.
Now we have the internet as an information distribution system. Focused, semi-permanent, widely used, and much cheaper.
It's over for newspapers. There's nothing anyone can do.
Walter Abbott
Odd, considering that the little scrap of news above comes from a newspaper.
Pure Crap. I explained a couple of weeks ago that come the 10th or 11th that this was going to happen. There is no panic and the sell off was very orderly, incremental steps down on a preplanned sale.
The value of the company stock is automatically depreciated after the ex-dividend date and the stock effectively trades for a time without one. Combine that with the benefits of year end tax write offs and selling MNI till the end of the month is a no brainer.
More sophisticated traders and investors also are acutely aware of the need to flee a stock that is trading in the 1 dollar area because most debt covenants contain clauses that say dipping to a certain level nullifies re-negotiated financial terms which can trigger default at a moments notice without ever having been disclosed to the public.
Douglas A. McIntyre must have been moved from the Metro desk.
I'm a former CO employee and I say your predictions are right on judging from what I hear from friends. However, the building is already for sale per a news article in September. Given their financial situation, do you really think they'll offer buyouts though?
When the justification “it comes from a newspaper” is used to support the right to life of newspapers, the arrogance of monopolized journalism shines bright and true.
This ignores the upheaval in business and society. Advertisers are tired of the rate card schemes, and now have choices. Many big advertisers will collapse in the near future. Toss in changes driven by technology in a no attention span “it’s all about Me” youthful society, and corporate journalism fails due to mass apathy, and indifference to “News selected for them”.
Yet the newspaper managers still cling to, “We are too important to fail”.
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