McClatchy (MNI), the large newspaper chain, reported dismal results for the month of Octobers. The company reported both consolidated advertising and total revenues in October 2007 decreased 9.9%..
Classified advertising fell almost 20% and real estate classified revenue fell almost 30%.
Revenue in the company’s large California newspaper group was down 19%.
It is very hard to imagine that the company can continue to handles its debt service in 2008 if its numbers keep falling at this rate. The company has long-term debt of about $2.6 billion and had interest expenses of over $48 million last quarter on pro forma operating income of just over $90 million.
With debt at that level and revenue running off close to 10%, MNI can’t last in its current configuration for long. It is going to have to start selling assets as fast as it can.
Douglas A. McIntyre
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