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 Friday: Second Thoughts, Sorta

Fitz: Newspaper sector stocks dipped broadly but modestly Friday, with every Big Board-traded company down on the day except for Lee Enterprises (NYSE: LEE), which was up 3.2% on a 13-cent gain to $4.24.

Losers were paced by Thursday’s darling Media General Inc. (NYSE: MEG), which was off 75 cents, or 8.4%, to $8.15. The McClatchy Co. (NYSE: MNI) was the only other stock to end down by more than about one percent. MNI slipped 4.6% on a 26-cent decline to $5.35.

McClatchy ‘Retention Bonus’ Plans Set For Top Execs, Except Gary Pruitt

Fitz: Gosh, these newspaper executives, they must be like weather balloons – you gotta tie them down or they’ll just take off. Tribune Co. just got permission from bankruptcy court to pay out $45 million to keep about 700 of its managers who apparently would be outta there in a Michigan Avenue minute without their “retention” bonus.

Now comes The McClatchy Co. in an SEC filing Friday detailing its 2010 retention plan for certain senior executives including three named execs: Frank Whittaker, vice president, operations, who is eligible for up to $175,000; Bob Weil, vice president, operations, eligible for up to $175,000; and Pat Talamantes, vice president, finance and CFO, eligible for $160,000. “The Retention Plan does not apply to the Chief Executive Officer of the Company,” says the filing.

McClatchy says it will make the payout only if operating cash flow this year gets to the point the board of directors authorize a supplemental company contribution to the 401(k) plan.

While we’re on the subject of bonuses, check out Chicago Reader media critic Mike Miner’s report on how the working stiffs at Tribune Tower took the news about bonuses – when they discovered that there will be no raises at all in 2010 or maybe beyond, but instead about 40% of the staff will be eligible for a year-end bonus. There are too many Star-Ledger vets at that paper to think that’s a desirable compensation system.

Calculating Value

 Jen: One thing that newspapers can't get straight is how to communicate their value to their readers and more important future readers. If anything is attempted it's usually manifested as goofy editor/ or publisher notes, bad TV spots, weak marketing campaigns often running in the paper itself.

Leave it to Earl Wilkinson to rally the troops. He proposes on his INMA blog a potential device that could calculate the value of newspapers. There is a danger in all of this. Newspaper might not like what the device spits back.

Friday Morning Links

Turns out The Wall Street Journal didn't need to outsource some printing for two months but rather two weeks. And The New York Times will not be doing it. (E&P)

Don't look to the iPad as a life saver warns Google. Newspapers need to significantly evolve to survive. (Ad Age)

Russian billionaire and media tycoon Alexander Lebedev says that while he's willing to invest in his newest purchase The Evening Standard, his patience and money won't be limitless. (The Daily Telegraph)

Don't be lured by the siren song of pay models college media, says Dan Reimold. (MediaShift)

A round up of media thought leaders and their thoughts on the iPad. And more from Josh Benton. (Reflections of a Newsosaur, Nieman J Lab)

At first Mark Potts thought Newsday was crazy to put up a pay wall. He admits his critique was wrong. (Recovering Journalist)

Moody’s Moody For MEG

Fitz: Moody’s Investors Service withdrew its ratings from Media General Inc. (NYSE:MEG) back in May 2007, but now that The Tampa Tribune parent is intiating an offering $350 million in senior secured notes, the credit rating agency is returning.

Moody’s assigned a “corporate family rating” (CFR) of B2, five notches below investment grade and defined as “lack(ing) characteristics of a desirable investment.” Senior analyst John E. Puchalla also assigned a “speculative grade liquidity rating” of SGL-3 that suggests the newspaper publisher and TV station operator is “adequate.”

The new notes would eliminate any maturities in 2011, with half the debt due in 2013 and the rest in 2017. Media General said it ended 2009 with total debt $712 million, down from $730 million at the end of 2008.

“Media General's B2 CFR reflects the company's good local market media
position, revenue concentration in the Southeast, high leverage, modest
free cash flow generation and intermediate-term refinancing risk,” Puchalla wrote.

The whole note is below the fold:

After The Bell Thursday: MEG O’ My Heart

Fitz: Media General Inc. (NYSE: MEG) came out with the best looking Q4 numbers in the newspaper sector so far, and it got a measure of love from The Street Thursday on a day the broader market fell again.

A good earnings report was clearly anticipated. Overnight, MEG, which had closed at $8.30 Wednesday, opened at $9.30 and quickly shot up to its intraday high of $10.10. The stock sagged for the rest of the session, closing at $8.90, a respectable 7.1% gain on a 59-cent rise. MEG’s 52-week range is $1.25 to $11.65 a share.

MEG is likely to see another bump after-hours because of its after-the-bell announcement that it was initiating an offering of $350 million in senior secured notes due way out in 2017. Proceeds would pay down debt. In its Q4 announcement, Media General said its debt at the end of 2009 was $712 million, compared with $730 million at the end of 2008.

It was mixed day for the sector with some small-cap high-flyers taken down a notch. Lee Enterprises (NYSE: LEE) gave up what MEG gained Thursday, ending down 7.2% on a 32-cent decline to $4.11 a share. A.H. Belo (NYSE: AHC) was off 4.5% on the day, down 29 cents to $6.19.

Deal To Print ‘New York Post’ At ‘New York Times’ A Non-Starter

Fitz: (Just so we're clear, this affair was about printing the Post, not the Journal.) Poor Rupert. He wants to kick off his New York edition of The Wall Street Journal with an extra section as quickly as possible, but the retrofitting project at the sibling New York Post, where it would be printed, has been plagued by repeated delays.(Update: At least, according to The New York Times report Thursday.) Not surprisingly, the rival tabloid Daily News declined to help. (Update: Dow Jones said they never asked.) The New York Times reports Thursday, though, that the Times is “in discussions” with News Corp. about doing the printing at its College Point plant. That seemed awfully magnanimous seeing how Murdoch is transforming the Journal into something very much like the Times.

Well, that ship has sailed. E&P Senior Editor Jim Rosenberg reports exclusively at the mother ship, with all the technical details of the press mess, that the discussions actually broke off some time ago. Joe Vincent, senior vice president of operations for the Post and Dow Jones, tells Jim, "We did (talk), but we couldn't work out a deal."

Brother, can you spare a double-wide?
 

So Many Presses and not a Place to Print

Jen: For those who haven't been following the heated newspaper wars here in New York City, it just got a lot more interesting for nerds, like me,  thrilled by the hum of the presses.

The Wall Street Journal has made it known that it's going for The New York Times' lunch on a national and a local level. Whatever you think about Rupert Murdoch, he is one of the few if only media executives actually investing in the newsroom. John Koblin reported yesterday in the New York Observer , for example, that the WSJ's New York edition trebled the staff initially planned.

The only problem with the WSJ's expansion is that it doesn't currently have the press capacity to handle the new edition. News Corp. is currently updating its printing facility in Bronx, N.Y., to handle both the WSJ and the New York Post. In the meantime, its looking to outsource some printing of the NYP until the upgrade is complete, reports Richard Perez-Pena.

News Corp. logically turned to its bitter rival, the New York Daily News, which has a beaut of a printing facility. The NYDN turned News Corp. down.

But not the NYT! It's looking into the possibility of printing its rival's paper probably at a hefty cost. Why let bad blood get in the way of a little money?

'New York Times' Stars In iPad Demo Video

Check it out here (large-screen version).

Photo: Courtesy of The New York Times

A Festivus Miracle? Media General Says December ’09 Revenue Was Flat

 Fitz: The newspaper industry has gotten used to reporting moderating revenue declines as good news, but Media General’s Q4 Thursday morning includes something approaching actual good news. I’ll let President and CEO Marshall N. Morton say it:

“Advertising sales strengthened as the quarter unfolded. In the month of December, total revenues were essentially even with December 2008.”

If less down is the new up for newspapers, flat is the new windfall profits.

Media General’s Q4, reported now by geographic segment rather than business, is the best report so far among newspaper companies. As E&P reports on its Web site, the Q4 total revenue decline of 14% is the lowest year-over-year decline report so far in this earnings season. And it is a significant improvement on the 18% decline in the third quarter of 2009.

The results are all the more encouraging because Media General owns 18 network-affiliated television stations and so faced tough comparables with all the political advertising during Q4 2008’s presidential election.

For the first time, too, there’s some unalloyed good news for employees -- of whom, Morton notes, there are 900 fewer than started the year in 2009. No furloughs are planned for 2010, the company said. Workers were forced to take five days off without pay in ’09.