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Kansas Liberty: 20 August 2008
Revenue continues to drop; advertisers flee; stocks at all-time low; wages frozen
Wichita Eagle, KC Star publisher stumbles again
The McClatchy Company, publishers of the Kansas City Star and the Wichita Eagle, continued to struggle to keep its newspapers afloat, despite rapidly crumbling business conditions.
The company's CFO, Pat Talamantes, told the Wall Street Journal Wednesday that July advertising activity was "only slightly better than June." Unfortunately for McClatchy, June was disastrous.
In a statement issued Wednesday, McClatchy announced that total revenue fell 16 percent, led by a steep decline in print advertising as businesses followed readers in abandoning the papers.
McClatchy's print-ad sales fell 22 percent to $120.4 million. That followed a 23 percent decline in June. Classified ads dropped 29 percent, yielding to competition from craigslist.com and other new media publications.
Last week, Star publisher Mark Zieman announced a wage freeze at the papers. And last June, McClatchy announed it was shedding 10 percent of its workforce. That brings the total number of job cuts at the company to nearly 25 percent in the last two years.
The Star has also been reducing its circulation area to trim costs.
McClatchy stock, which four years ago sold for more than $70 a share, on Wednesday closed at $3.78, another all-time low for the company.
The company's motto is "Speak truth to power," a slogan reminiscent of the 1960's. Critics say the editorial stance and the news coverage at the Star and Eagle are also out of touch and extremist, alienating many readers and advertisers by blindly supporting liberal causes and candidates.
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