Fitch: ‘Several Cities’ Could Have No Daily Paper by 2010

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.

As noted in Editor & Publisher:

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.

More

More than 30 newspapers for sale in U.S., and buyers are scarce

Rocky Mountain News among dailies for sale

Jon Fine’s media predictions for 2009

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2 Responses

  1. Lance,

    I’m surprised that newspapers survived even as long as they did. Every time a new type of media is introduced, it tends to over shadow the former. I don’t know if this is a great example, but there was a time when you could walk into a movie rental store and see wall to wall VHS cassettes. These days were numbered the minute that DVD’s arrived. With the arrival of the Internet and 24/hour news stations, the old fashioned newspaper will sadly become a thing of the past. Some of my family works in the newspaper industry, so I am well aware of the impact that this change is making. This is a very interesting topic. Thanks for the post!

    Kimberly Grass, MBA, CRESS
    Virtual Workforce LLC
    “Let Us Lighten the Load”
    Newmarket, NH 03857
    Phone: (603)292-5716
    Fax: (603) 292-5914
    E-mail: kgrass@virtualwf.com
    Website: http://www.virtualwf.com
    Blog: http://www.vworkforce.wordpress.com

  2. […] publications match what the customers actually want (as opposed to what they want). Lance Turner notes something that is a bit frightening though: in a story from Editor & Publisher, forecasters predict that several newspapers and newspaper […]

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