Media General Revenues Slide 10.8 Percent in July
The news keeps getting worse for Media General, Inc. The media conglomerate reported $68.3 million in revenue in July down 13.8 percent from the same month a year before. That performance is even worse than June's dismal performance, which showed a 10.8 percent slide in revenue.
The tumble in revenues occurred mainly in the publishing division, with the company's flagship Tampa newspaper taking the biggest hit, Media General reported yesterday. But the company's Virginia newspaper group, which includes the Richmond Times-Dispatch , saw a 17.2 percent sales decline. That's even worse than the 14.6 percent decline reported in June.
The broadcast division contained revenue losses to 6.6 percent, thanks largely to a shot in the arm from political campaign spending. The main positive development was a 47 percent increase in local advertising revenues for the interactive media division.
"The Publishing Division's July results reflected continued weakness in classified advertising in most markets, particularly Tampa and Richmond," said CEO Marshall N. Morton .
Higher interactive-media revenues were driven by a 47 percent increase in local advertising spending and another month of strong revenues from DealTaker.com , a player in the fast-growing sector of online coupons and shopping. The company's Web-First breaking news focus and Yahoo! local news referrals continued to drive audience growth, Morton said. Page views and visitor sessions were up 8.7 percent and 19.3 percent, respectively. Local news page views were up 29 percent at inRich.com in Richmond.
Bacon's bottom line: We're witnessing the melt-down of one of America's great industries, the newspaper industry -- comparable to what the automobile industry is experiencing. As recently as the 1990s, owning a daily newspaper was a license to print money. Revenues and profits increased each year like clockwork. Even during recessions profit increases only slowed down; they rarely fell. Because Media General's woes reflect national trends, it's not clear that anything can staunch the revenue losses.
As I've noted before, it's not clear whether Media General and other newspaper companies can successfully make the transition to an Internet-based business model. It's encouraging to see that inRich.com revenues are up strongly, but Media General does not release enough data to know how truly profitable the website is after internal, inter-company cost and revenue transfers are taken into account.
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