"We are operating in an exceptionally difficult financial and economic environment," commented Sam Zell, Tribune's chairman-CEO. "The newspaper industry continues to see extraordinary declines in ad revenues, and Tribune is no exception. But, we continue to aggressively pursue our operating strategy, and to tightly manage the factors that are within our control. Internally, we have established momentum on developing new initiatives, and our culture now reflects that focus and mind-set."
Here's what "exceptionally difficult" looks like: Total publishing-division advertising revenue declined 19%, led by declines in retail (-10%), national (-21%) and classified (-30%).
Worse yet, interactive revenue -- long seen as the growth engine for an industry that has taken to referring to itself as "newspaper media" in recent years to emphasize its non-print aspects -- declined 7%, a rate of deterioration faster even than print-newspaper circulation revenue (-2%).
Tribune has responded to the industry's difficulties by revamping its papers to feature an advertising/editorial ratio of 50/50, and by reducing its staff accordingly. That, too, was evident in the results, as the company took a $41 million charge related to "severance and special termination benefits" during the quarter, which widened its loss.
Pain all around
The third-quarter bloodbath was by no means a Tribune exclusive: McClatchy posted a 19% ad decline in the period, Gannett saw an 18% drop and E.W. Scripps' papers saw a 20% drop. (Of those publishers, however, only Scripps saw web revenue decrease, with a 12% drop.)
Several publishers -- including Tribune, Scripps and Lee Enterprises -- recorded their first-ever online revenue declines earlier this year, although publishers who had built online businesses independent of print-ad sales had generally fared better.