Media giants brace for tougher 2001

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Several media giants, appearing Dec. 6 at dueling media conferences in New York, added fuel to concerns about a tougher ad market in 2001. News Corp. President-Chief Operating Officer Peter Chernin said his corporation has implemented a companywide hiring freeze. Mr. Chernin cited the ad market slowdown as one reason for the action, which took place within the past three weeks. "We thought it was a prudent time to tighten the screws a little bit," he said. Mr. Chernin referred to ad sales as "a tough marketplace right now." For next year, he predicted double-digit ad growth would slow to single digits. News Corp. operates the Fox TV network, national cable stations and owns local broadcast TV stations across the country, as well as the New York Post.

Meanwhile, Dow Jones & Co., whose flagship The Wall Street Journal has been battered by double-digit ad volume drops in November and December compared to highflying year-earlier results, vowed it would meet fourth-quarter earnings expectations. "There is some definite slowing in the economy as a whole, and a much higher degree of nervousness, and we're seeing that along with everyone else," said Dow Jones Chairman-CEO Peter Kann. Mr Kann nonetheless said he expects Dow Jones' overall earnings and revenue to grow, albeit by an unspecified amount, in 2001, while Journal ad revenue will remain flat.

Other major newspaper companies presenting results and forecasts sang a chorus of slowed growth in 2001, but growth nonetheless. The key driver will remain national advertising, which should boost The New York Times Co.'s ad revenue by a projected 5 percent to 7 percent next year, compared with 10 percent growth through November of this year. Similarly, Gannett Co.'s USA Today projected an ad revenue increase of 7 percent for 2001, vs. 11 percent for this year. Knight Ridder projected ad revenue growth for next year in the mid single digits; this year it expects to report 4 percent ad revenue growth, which is on the low side of its estimates for this year.

The winner in the online profitability sweepstakes is Gannett, which projects profits next year, while The New York Times Co., Tribune Co. and Knight Ridder expect profitability in 2002.

Copyright December 2000, Crain Communications Inc.

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