After The Bell Thursday: Selling On The News

Fitz: Gannett Co. executives presenting to analysts in New York Thursday could hardly have been cheerier about the company’s prospects, all things considered. Chief among those considerations, of course, is that ad revenue is expected to show a continuing  decline when Q1 results are posted.

CFO Gracia Martore emphasized that the momentum of Q4’s easing declines is also continuing in the not-so-new year. This quarter’s decline of newspaper revenue should drop to a single-digit percentage compared to the 18% plummet publishing revenue took in the final quarter of 2008. And Gannett said it was “comfortable” with The Street’s view that it will be profitable in the quarter, with the consensus at 40 cents a share.

All this (relatively) happy talk did nothing for Gannett (GCI) stock, though -- nor for the rest of the sector.

GCI ended the day at $16.40 a share, down 38 cents, or 2.3. On a day when the Dow recorded its eight straight up session, all but two NYSE newspaper stocks fell on the day, with The McClatchy Co.(MNI) pacing decliners by falling 4.4% on a 22-cent loss to $4.83.

The two gainers didn’t exactly win bragging rights at the Bull & Bear Bar, though: A.H. Belo (AHC) was up just 7 cents, or 0.9%, to $7.93 and Journal Communication’s (JRN) 2-cent gain to $4.01 amounted to just half a percent.

After The Bell Tuesday: Somebody Wants Out Of McClatchy

Fitz: So who’s dumping all that The McClatchy Co. (NYSE: MNI) stock?

At 13 minutes after noon on Tuesday an astounding 9.815 million shares of MNI traded at 49.5 cents. The single trade accounted for nearly all the volume 10.3 million shares in the entire session -- twenty times the normal handle of 482,000 shares.

Nobody was fessing up to it at the SEC on Tuesday night. In fact the only document filed there Tuesday was McClatchy’s annual meeting proxy, which documents the doleful decline of MNI in all kinds of ways.

Consider, for instance, the “change of control” agreements that McClatchy has with its NEOs (named executive officers -- the big bosses) . There’s no golden parachutes awaiting execs there: all the stock options and SARs (stock appreciation rights) were already so far “under water” -- the exercise price was above the 81 cents MNI fetched last Dec. 31 --  that nobody but Chairman and CEO Gary Pruitt would see any cash.

And his reward? A fast $42,525. Don’t spend it all in one place.

But Tuesday’s session made that 81 cents a share look pretty  good. MNI closed at 49 cents a share, not an all-time low, but still. The close was 4 cents, or 7.55% off the open.

The newspaper sector closed mostly down on a day when Sun-Times Media Group (PINK SHEETS: SUTM.PK) filed for Chapter 11 bankruptcy protection. SUTM.PK matched its all-time low of 2 cents a share, shaving off a little more than 2 cents, or 55%, on huge volume.

'KC Star' To Combine Sections

Jen: I know these are tough times and all, but the amount of cutting newspapers are doing is getting ever-so-worrisome. Kansas City Business brings news that The Kansas City Star is reducing sections of the print edition.

See if you can follow the bouncing ball.

Main news, local news, and business will be combined in ONE section excluding TUESDAYS when readers get a stand-alone business tab. Sports and classifieds will run as one section except on SUNDAYS. Another section, FYI will continue as a stand-alone unless its THURSDAY when its combined with the Preview section as it is now.

Sun-Times Media Group Bankruptcy: Who’s Owed What?

Fitz: Sun-Times Media Group’s Chapter 11 petition lists $479 million in assets, and $801 million in debt, but none of its 30 largest creditors have truly substantial claims on the publisher of the Chicago
Sun-Times.

None, that is, except one of the creditors with no money claim attached -- the IRS. Sun-Times Media Group could be on the hook for as much as $600 million in back taxes and penalties, but the sum is being vigorously disputed.

The biggest creditors claiming specific amounts, not surprisingly, are newsprint suppliers and other materials vendors. Catalyst Paper is the biggest single creditor with a claim of approximately $1.471 million, followed closely by Alberta Newsprint sales with about $1.11 million. Tembec Enterprises, another newsprint supplier, is owed about $1.03 million.

Chicago Tribune Distribution has the fourth-biggest claim at $614,618. As part of its cost-cutting measures, Sun-Times outsourced all circulation and distribution functions to the Tribune last year.

The next big creditors are kind of puzzlers. Joyce B. Santiago of Chicago is listed simply as “contest winner,” with a claim of $480,000. Pat Deleo is also described as a “contest winner,” and has a claim of $440,000. For the past couple of years, the Sun-Times has conducted circulation-building contests, but the top prize has generally been $25,000.

Howzat? And what is Conrad Black doing on the creditors' list? See below:

An SUTM.PK Fire Sale As Bankruptcy Filed

Fitz: Holders of Sun-Times Media Group (PINK SHEETS: STUM.PK) wasted little time in dumping them on the Over-The-Counter market. Within an hour, the penny stock had broken through its all-time low of 2 cents a share as more than 1 million shares traded hands. By 11 a.m. EDT, with a volume of 2.51 million shares -- compared to the three-month average of just 97,000 shares for an entire day’s session -- SUTM.PK was trading at 2 cents, down 3 cents, or 60%, on the open.

The Little Engine That Could, Until It Couldn’t Anymore

Fitz: The wonder is that the Chicago Sun-Times fended off bankruptcy so long, that it was actually the parent of the Chicago Tribune -- the big, thick broadsheet that could once condescend to the scrappy tabloid – that went running first to Wilmington, Delaware.

Time ran out Tuesday, with the filing of a Chapter 11 petition by Sun-Times Media Group, publisher of the Sun-Times, seven other Chicagoland dailies and some 50 weeklies. It was plummeting advertising revenue in a time of secular change that was the final straw, but Sun-Times was wounded in so many more ways, ways that other newspaper companies never had to endure.

There are four other newspapers and chains in bankruptcy court right now, and you could blame their management for incompetence or arrogance in piling up debt at exactly the worst time. But you can’t accuse any of them of larceny, as Sun-Times experienced under what a special committee of its board of directors called a “corporate kleptocracy.”

The details are at E&P’s Web site. The Sun-Times Media Group bankruptcy site is here.     

Tuesday Morning Links

Life is reborn again. Today it officially launches as a photo site (Portfolio).

The NYT has out the knife and is applying it to several weekly sections including the City pages (New York Observer).

Finally! Jay Rosen is asking people to count how many local stories their metros produce (Nieman Lab).

Four newspapers, four face lifts (AP).

USAToday.com launches a travel site for business peeps.

At the Tampa Tribune, 65 positions vanish (Tampa Business Journal).

After The Bell Monday: Newspaper Sector Doubles Dow Decline

Fitz: The newspaper sector remained in reverse Monday, unable, as if anyone expected it could, to resist the tide of the broader market. With the Dow down some 254 points, or 3.27%, the sector posted mostly double-digit percentage declines.

There was no notable news about the industry Monday, but when investors worry about the auto industry, and financial, the sector is set up for a fall.

The New York Times Co. (NYSE: NYT) and A.H. Belo Corp. (NYSE: AHC) were knocked back below their psychological levels after an oh-so-brief perch last week. NYT fell below $5 a share as it shaved 45 cents, or 8.9%, of its opening to end at $4.62.  AHC gave up 12 cents, or 10.9%, to close below the buck-a-share mark at 98 cents.

Journal Communications (NYSE: JRN) continued its backward trend, losing 13 cents a share, 17.3%, to close at 62 cents.

The biggest percentage loser was E.W. Scripps (NYSE: SSP). It fell 47 cents, or 28.1%, in the session to end at $1.20.

There were no sector gainers on the Big Board Monday. 

Odd Timing For ‘The New York Times’ College Admissions Blog

Fitz: Well, high school senior, the thin or the fat letters telling you whether you’ve been admitted to the college of your choice start arriving Monday. Wouldn’t this be a good time for some admissions advice from The New York Times?

The Times launched a new blog called “The Choice,” dedicated to "demystifying the college admissions process with insights, analysis and expertise." Goodness knows the college admissions process could use some demystifying – but I find the timing most mystifying of all.

Why launch a college admissions blog when the process is all but done for this school year?

College applications needed to be done by February at the latest, except for those schools with rolling admission. And most kids applied early for at least one of their school choices – and have known for more than six weeks whether they got in, were rejected, or “deferred.”

The Times print edition did a bang-up job during this school year, reporting on the admission process and the record-high applications at, for  instance, the University of Massachusetts, Amherst, where a certain E&P editor-at-large’s son had his heart pinned on attending. (He found out last week, he’s in!) But this blog, launching the same day a thin envelope (boo-hoo) also arrived in the mail for the Number One Son, seems if not too little, certainly too late, for this school year.

Internet Advertising Grew in 2008

Jen: Hey now! Internet advertising revenue rose more than 10% in 2008, reports Stephanie Clifford. We'll take it. (NYT).

'Star Trib' Appreciates Print Readers

Jen: The Star Tribune in Minneapolis quietly unveiled a new online content strategy that merits attention. Back on March 15, the Star Trib started withholding certain content from the Web site for the Sunday print edition. It's marked as "print exclusive."

In a note to readers, Editor Nancy Barnes wrote that like everyone else these days, they started questioning giving all their online content away for free. But the twist here is that the Star Trib is going to reward print subscribers while keeping its online content free-- a move I think is worth keeping an eye and perhaps stealing.

The select content for the print edition includes in-depth investigative stories and long features. It's not that the Star Trib is giving up on the Web. The paper still breaks news online and will even publish "print exclusive" content when warranted. But it's giving paying subscribers a first look before the stories hit the Web a week or so later.

Too many newspapers lately seemed preoccupied with getting people to pay for online content while treating those people who actually pay for the content via print subscriptions as second-class readers. How? They drop frequency. They kick home-delivery to the curb. They raise the price of subscriptions (and especially newsstand copies) and give less in return. For all the blubbering about hyper local, I've noticed a lack of focus in daily metros when I'm lucky enough to travel around the U.S. It's full of AP and wire copy with a handful of "local" stories broken into digestible chunks with lots of pictures. I wouldn't pay for that.

Using the print edition as a vehicle for in-depth analysis is something that newspapers should be doing more. Break news online, aggregate local content, upload video, but please don't forget the very people, the print subscribers, who are footing the bill. They deserve something extra.