From a Star Tribune article on the decline of newspapers:

In many markets, including the Twin Cities, the Star Tribune’s readership is larger than the audience for any TV news program or an average episode of a highly rated sitcom. Except during recessions, the advertising revenues of newspapers have continued climbing long after newspaper penetration started declining and even since the absolute number of readers started heading south.

In fact, the long, slow decline of newspaper readership has coincided with a long, steady climb in their profitability. In 2004, the average after-tax profit margin of the newspaper divisions of the major media companies that Morton follows was 20.5 percent. That is more than double the average profit margin of the Fortune 500. McClatchy Newspapers, which owns the Star Tribune, had a profit margin of 23.1 percent, according to Morton; Knight Ridder newspapers, including the Pioneer Press, had a profit margin of 19.4 percent.

In its most recent quarter, the New York Times Company earned $60.8 million on $845 million in sales. This is a 7.2% profit margin, about one third that reported as average in the Star Tribune. Last month, S&P put the New York Times Company on CreditWatch for a downgrade of its A+ credit rating. This occurred when the Times said it was laying off 500 people, which we wrote about then.

We had not realized, however, that the Times is only one third as profitable as its peer group. The Board really should consider running the Company for its shareholders, rather than for the family trust, as we have said previously.

Given these facts, it is little wonder that, while the S&P has advanced almost 20% over the last two years, the NYT Company has declined nearly 40%.

This entry was posted on Tuesday, October 11th, 2005 at 3:17 pm and is filed under business, Democrats, General, Left of Left, MSM. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.