Have we mentioned how bad things are for daily newspapers? Just how dire it is?
This note from ratings service Fitch is chilling, to say the least.
Newspaper and newspaper groups are likely to default on their debt and go out of business next year — leaving “several cities” with no daily newspaper at all, Fitch Ratings says in a report on media released Wednesday.
“Fitch believes more newspapers and newspaper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010,” the Chicago-based credit ratings firm said in a report on the outlook for U.S. media and entertainment.
Fitch is generally pessimistic across the board, assigning negative outlets to nearly all sectors from Yellow Pages to radio and TV and theme parks. But the newspaper industry is the most at risk of defaulting, it says.
“Much of the business risk for the media sector is likely to continue to be concentrated within the newspaper sub-sector,” the report says. “Fitch expects newspaper industry revenue growth will be negative for the foreseeable future as both ad pricing and linage will be under pressure within each of the four main components of newspaper companies’ revenue streams: circulation and local, classified and national advertising. Newsprint costs could rise, and it could be difficult to offset revenue declines with cost cuts.”
Meanwhile, Fitch cut to “junk” its rating on debt for two major newspaper companies, The McClatchy Co. and Tribune Co. It says both are serious danger of default.
The sunny folks at Fitch also go on to predict a severe global recession for 2009 and a weak advertising market. And that’s about the point I had to stop reading.