Sunday, November 30, 2008

Battered U.S. media prays for its bailout

Sam Zell, the Chicago billionaire who bought Tribune Co. (which owns the Chicago Tribune, Los Angeles Times and 23 TV stations), told a conference in New York this month that when he took the company private last year he budgeted for a 6-per-cent erosion in newspaper advertising, which was twice the rate of recent years. Instead, he said, this year's sales have tanked 19 per cent.

As a result of the harsh environment and worries about media's growth prospects broadly, nearly every big U.S. media company has seen its stock price halved or worse over the past six months. The lucky few, Walt Disney Co. among them, have only dropped roughly in line with the S&P 500, down 35 per cent during the period.

For some companies with a heavy skewing toward newspapers - Media General, Belo, E.W. Scripps and McClatchy among them - the situation is even bleaker, with stocks off as much as 80 per cent or 90 per cent. And the meltdown has already affected media moguls such as Sumner Redstone and John Malone, who have been forced to sell shares in the companies they control at low prices in order to meet financial obligations elsewhere in their empires.

}}} full story {{{

No comments: