Tuesday, April 14, 2009

Newspaper Ad Revenue Could Fall as Much as 30%

NEWSPAPER advertising, already in its worst slump since the Depression, suffered by far the sharpest drop in generations during the first quarter of 2009, down 30 percent for some papers, industry executives and analysts say.

Publishers will start to report first-quarter results this week, but people who follow the industry and have had a glimpse of the 2009 numbers say it is clear that once again, even the most pessimistic predictions were not dark enough. They are expecting declines sharp enough to wipe out profit margins at many papers that, despite two years of battering, had stayed comfortably in the black, and to push already-weak publishers closer to bankruptcy, perhaps even closure. “I think over all we’re going to see a decline somewhere in the mid-20s” compared to the first quarter of last year, said Edward Atorino, a media analyst at the Benchmark Company, a research firm. “There have been a lot of signals that things have gotten much worse in the last couple of months — the furloughs, the pay cuts, the layoffs.”

John Morton, an independent newspaper analyst, agreed with that assessment, adding “from what I’m hearing, I suspect 30 percent won’t be too unusual for the bigger papers.”

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