Sam Zell took The Tribune Company private and probably regrets that every hour of every day. With the downturn in the industry, his huge debt load is like a boat anchor.
Zell has announced huge cuts in the amount of newsprint his papers like the LA Times and Chicago Tribune will use. He will chop the number of editorial pages to 50% of each property’s total. That means the home town newspaper is going to look very thin.
Zell has more debt than most news chains, but public companies like McClatchy (MNI) and Gatehouse (GTS) are not far behind him. They borrowed money to buy more newspapers. Their high long-term debt and falling revenue have taken their stocks down 50%, 60%, and in some cases 80% this year.
Zell’s move will spread from The Tribune to other newspaper operations. Revenue in the industry in now falling close to 10% a year. Even financially strong companies like The New York Times (NYT) and Gannett (GCI) can’t hold out without making similar large reductions. Online versions of their products might have saved them, but, at most of these companies, they are not even 10% of total revenue.
Internet news outlets are winning and it is just a matter of time before they will replace newspapers altogether.
Douglas A. McIntyre
The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.