Media giant EW Scripps Co is laying off around 400 employees at its newspapers. The company has not yet elaborated on where jobs would be cut, but the Knoxville News Sentinel has announced that about 50 jobs, including 13 in the newsroom, would be cut at properties of the KNS Media Group subsidiary of Cincinnati-based Scripps. The move affects about 10 per cent of the KNS work force, according to the Associated Press (AP). [Link]
"Behind all the accounting noise related to the separation is a healthy company built upon a collection of solid media businesses in attractive local markets," said Rich Boehne, president and CEO of Scripps. "Even through these challenging economic times, Scripps is fortunate to be able to focus on the opportunities ahead as local media markets adjust to the full impact of the Internet and other digital media platforms.
"To put Scripps in the best possible position to exploit opportunities and build value for shareholders during this period of economic uncertainty, we've made a series of decisions - including headcount reductions, suspension of the dividend and other expense reductions - that will keep our debt low and balance sheet healthy. These are unusual times, not without difficulty and peril. But we believe dedication to strong financial health in the short term will yield outsised returns over the long term for those in position to exploit the transformation of our industry," Boehne said.
Third-quarter results reflect continued weakness in advertising sales at the company's newspapers and television stations. The company's revenue decreased 9.0 per cent to $230 million, compared to $253 million in the third quarter of 2007.
The company reported a loss from continuing operations of $21.0 million, or 39 cents per share, compared with income of $16.6 million, or 31 cents per share in the year-ago quarter. The per-share figures are adjusted for a 1-for-3 reverse stock split that was approved on July 15, 2008. The loss from continuing operations in the 2008 quarter was increased by costs related to the separation of the Scripps Networks and interactive media businesses totaling $22.0 million, as well as a $24.9 million non-cash charge to further write down the investment in our Denver newspaper partnership.
Year-over-year revenue from newspapers operated solely by Scripps fell 17 per cent to $131 million. Advertising revenue was down 20 per cent to $101 million.
Advertising revenue broken down by category was:
* Local, down 16 percent to $27.3 million
* Classified, down 28 percent to $33.6 million
* National, down 31 percent to $5.9 million
* Preprint and other, down 12 percent to $24.8 million
* Online, down 12 percent to $9.1 million
The decline in online ad revenue was attributable to the weakness in print classified advertised, to which most of the online advertising is tied. Revenue from pure-play advertisers who only purchase ads on the company's newspaper Web sites rose 13.4 percent in the period. Circulation revenue was $26.6 million, down 7.6 per cent.
Due to significantly lower usage, newsprint expense declined 2.6 per cent to $15.7 million, despite an increase in pricing of about 32 per cent over the prior-year period. Cash expenses for Scripps newspapers were down 6.7 per cent from the prior year, including the favourable impact of a $3.0 million adjustment for self-insured health care and disability claims. Segment profit at newspapers managed solely by the company was $14.0 million, compared to $32.7 million in the third quarter of 2007.
