My normal state is optimism when it comes to the future of journalism, which is why yesterday felt like a downer as a relentless stream of newspaper business news poured through my news reader.
The big news was all bad: NYT Co. profits fall by 51.4 percent in Q3, Wage freeze at AH Belo, Star-Ledger says farewell to 40 percent of newsroom, Gannett Q3 Profits Drop 32 Percent; Revs Slide 8.9 Percent… you get the disturbing picture.
The Canadian newspaper market isn’t being hammered as badly, but the news from here isn’t that good, either. If you follow the blog, you’ve seen my posts this week about the state of CanWest’s stock, which closed down another 14 per cent Friday, taking it to 93 cents from a high of just over $1.40 earlier in the week.
The Globe & Mail’s business coverage has featured three recent pieces that I want to draw some grafs from. From, CanWest’s woes ‘very challenging for the foreseeable future, there’s this:
With advertising down at its newspapers and contributions from its Australian television holdings fading, TD Newcrest says CanWest Global Communications Corp.’s shares aren’t worth the risk.
“Given that the equity value has been virtually wiped out and considering the poor visibility of the future value of the company … we have reached a point where the risk/reward does not work for us,” analyst Scott Cuthbertson wrote in a note to clients yesterday.
That report, issued earlier in the week, is one of the reasons for CanWest’s dramatic run to the bottom.
There’s not much good news in Internet, cellphone: ‘the new essentials’, a report on a survey of Canadians asking what they will cut as the economy tightens. According to the survey, the top four items on the to-be-cut list are: tickets from concerts and sporting events, movie tickets, DVD purchases and subscriptions to magazines and newspapers. Further down the list are such things as premium cable packages and video game buying.
Buried at the very bottom of the article was this:
RBC analyst Drew McReynolds said in a recent research note that the investment community so far appears to be viewing the present economic turmoil as similar to the economic slowdown that occurred after the dot-com crash. That period saw a sharp drop in advertising spending, but did not last as long as other slumps.
~snip ~
“In our view the main catalyst for the media sector – evidence of a bottoming of the advertising cycle – is at minimum two to three quarters away.” (Quote from RBC analyst Drew McReynolds.)
Get that? Half to three-quarters of a year from advertising demand bottoming out, given current economic conditions. Yikes.
So. That’s some of why yesterday was a bummer. I still belief strongly that journalism has a strong, exciting future, but it’s sometimes tough to maintain that in the face of the business news.
Which, unfortunately, will keep coming. As the Globe, in Corus braces itself for ‘a tough year’ in broadcasting, reports:
Corus, which owns dozens of radio stations and specialty television channels such as YTV and CMT, is the first in a parade of media and entertainment earnings over the next few weeks. Astral Media Inc., Torstar Corp. and CanWest Global Communications Corp. report their quarter next week, followed by Cineplex Galaxy Income Fund and Thomson Reuters in early November.
Tags: business, economy, newspapers
