Gannett Co., owner of Statesman Journal and USA Today, is the big loser. Other newspaper companies feel the heat.
(SALEM, Ore.) - A company notorious for saying "their stocks never drop" has taken a big hit on Wall Street. Gannett Co., owner of the Statesman Journal Newspaper in Salem, Oregon, as well as the Stayton and Silverton newspapers, is the biggest newspaper company in the world.
Their problems might be even bigger.
Forbes Magazine and The Associated Press report that newspaper publishers around the country are down on Gannett, a company that on Thursday, noted a significant decline in advertising revenue which fell 3.8 percent in February to $385 million, down from $400.4 million the February before.
This in turn has impacted other newspaper stocks on the NYSE like Tribune Co., the New York Times Co. and E.W. Scripps Co. And the effect may not be turning around any time soon. Interestingly, the only media that is making headway and gaining advertising revenue nationally each year is Internet.
The high cost of paper is only one of the factors contributing to the decline of newspaper's popularity. Recent scandals involving circulation numbers have landed numerous circulation directors across the country in hot water and legal difficulty.
Instant news found on the Web has newspaper companies scrambling for new structure in their news departments. Video, something totally foreign in newspaper operations until recently, is suddenly being shot by still photographers.
At the Statesman Journal Newspaper in Salem, newsroom veterans are facing the unknown, as the traditional news gathering techniques of the industry are being supplemented with new demands of "content" for both the print and electronic products.
According to the Forbes article, groups like Morgan Stanley are maintaining "a cautious outlook" on the Statesman's parent company, Gannett, due to the weak February results.
"Revenues look to be far from reaching some sort of a trough and until we see some indication of stabilization we would steer clear from owning the shares," noted Lisa N. Monaco of Morgan Stanley.
Salem, Oregon Newspaper's Parent Company Takes Big Hit on Wall StreetSalem-News.com