Limited Gains in Ad Revenue Won't Impress Wall Street, Exec Says

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NEW ORLEANS ( -- Newspaper executives today debated the advantages of cross-media ownership for local markets during a panel at the Newspaper Association of America convention here.

The issue is timely -- and the panel was well-attended -- as publishers wait while the Federal Communications Commission re-evaluates if it will lift restrictions preventing newspapers from owning broadcast stations in the same market.

Yet detailed information presented by executives with experience in assembling such efforts shows that the hype thus far outweighs the revenues that local combinations of newspapers and other media assets generate.

"It is making money,"

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said panel moderator John Haile, a founding partner of Chicago's Inside Out Media Partners, of his early experiences working across the Tribune Cos.' Orlando, Fla., properties, which include the Orlando Sentinel and a stake in local cable news channel Central Florida News 13. "But does it make the case for doing something similar in your market?"

No easy answers
No easy answer greeted attendees. Figures disclosed pegged Gannett Co.'s cross-media efforts in Phoenix, where it owns the Arizona Republic and NBC affiliate KPNX, netted $4 million in incremental ad revenue last year. A Gannett executive later said the $4 million amounted to less than 1% of the company's total revenues in Phoenix.

Media General's convergence efforts in Tampa, Fla., where it owns the Tampa Tribune and a TV station, netted the company around $6 million in incremental revenue last year. In Topeka, Kan., where Morris Communications owns the Topeka Capital-Journal and two radio stations, cross platform ad sales have resulted in around $400,000 in incremental revenue since cross-selling efforts began last summer.

Cost-savings when functions are merged between local properties look decidedly finite, said one executive.

Jim Moroney, publisher-CEO of the Dallas Morning News, shared some quick calculations showing a maximum of $1 million in costs could be cut.

Won't impress Wall Street
"I don't think that's sufficient to impress people in Lee's business," he said, referring to Leland Westerfield, an analyst with UBS Warburg.

Mr. Moroney added what he felt was a reasonable goal for incremental ad revenue -- 2% of total revenues in a given market -- would fail to impress Wall Street.

Later in the sessions, Mr. Moroney said it remained uncertain whether "there will be that [much bigger] a bang" through owning two properties in one market as opposed to newspapers simply partnering with local broadcast stations.

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