Read all about it–the housing slump has taken a new victim.
This time, newspapers are feeling the burn of the housing boom bust. (And–somewhat sadly, yet logically–they’re also the ones to report the news of their lower revenues.)
Print periodicals may seem like an unlikely byproduct of the decline in home prices, values, sales–and just about everything else–but two major publishers reported serious ad revenue losses due to the slump last week.
- As we reported last week, The Chicago Tribune, the second largest newspaper publisher in the U.S., announced last Tuesday that its October revenue dropped 9.3 percent due to lower classified ad sales.
Lower consumer spending helped, too, but the housing slump was mainly blamed for the blow to the Tribune’s advertising, which was down 4 percent. The company’s earnings were 7 percent lower than those in the third quarter 2006.
As a result, consolidated revenue for the period ending Oct. 28 fell from $422 million a year ago to $383 million. Ouch.
- In London, McClatchy Newspapers Inc. said consolidated advertising revenue had fallen 9.9 percent in October compared to October 2006, according to MarketWatch.
The U.K. housing market also exhibited some troubling signs recently–the Nationwide Building Society announced last week that U.K. house prices hit their lowest level in 12 years and mortgage approvals were at their lowest since February 2005 –but McClatchy is blaming the drop on its California and Florida newspapers, two of the areas hardest hit by the housing decline. Less real estate to sell meant less listings–and less revenue.
We were just getting used to reports of home improvement retailers and material manufacturers reporting lower revenues due to the U.S. housing decline.
Many of the losses were large, and some are ongoing: Building Materials Holding Corporation saw its third quarter net income drop from $35.3 million in 2006 to $4.2 million this year; just today, Home Depot announced it would be closing its Brandon, Fla. call center and laying off 750 employees.
But our daily coffee companion? The newspaper?
Given that newspaper revenues were flat last year–and pre-tax earnings were down a hefty 8 percent, according to the Project for Excellence in Journalism’s The State of the News Media 2007 report–that can’t be good news for the journalistic community.