Skip navigation
MOST POPULAR RELATED TAGS
  • TOPICS
  • SECTORS
  • COMPANIES
Media Money Video Gallery
The hour's top business headlines, with CNBC's Julia Boorstin
The hour's top business headlines, with CNBC's Julia Boorstin
MEDIA MONEY INDEX
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
See all Media Money PostsMedia Money with Julia Boorstin
Text Size
Oct.02
5:28 PM ET
Thursday, 2 Oct 2008
Publishers Struggling in This Economy

It's a tough time for newspaper and magazine publishers.

This week, "The Sun," the six-year old daily newspaper, printed its final paper. The conservative-oriented paper searched for new financial backers for nearly a month, and finding no private equity interest, had to shut down.

Meanwhile Variety, the 103-year old Hollywood trade publication, can't find a buyer. Reed Elsevier Group [REL  Loading...      ()   ] put its Information Business division (including Variety) up for sale. Of 40 prospective buyers, not even 10 made it to advanced talks.

With the frozen credit markets, Reed managed to arrange $1.2 billion of financing for the buyer, even offering to finance up to $300 million with its own money. That would make for a sale of some $1.5 billion-plus for Reed, but so far, no buyers.

Meanwhile newspaper publishers are feeling the pinch—struggling with the fact that short-term financing markets are pretty frozen right now. Gannett [GCI  Loading...      ()   ] said it moved to tap its $9.3 billion in revolving credit facilities.

Tribune Company (now private under Sam Zell) and McClatchy [MNI  Loading...      ()   ] all have significant debt, which means in this environment, slipping ad revenue could spell default or bankruptcy. At the very least, publishers will face higher interest rates and more limitations. The Star Tribune, a Minneapolis newspaper, says it skipped a payment as it attempts to restructure $430 million in debt.

Bottom line: not only do newspapers face declining ad revenues as marketers look for a more quantifiable and reliable audience, but they also face tougher debt environments. A bad situation on two fronts.

 

Questions?  Comments? 

© 2008 CNBC, Inc. All Rights Reserved

Permalink: /id/26997329

HOME  |  NEWS  |  MARKETS  |  EARNINGS  |  INVESTING  |  VIDEO  |  CNBC TV  |  CNBC PLUS  |  CNBC MOBILE  |  CNBC HD+
About CNBC   |   Site Map   |   Privacy Policy   |   Terms of Service   |   Advertise   |   Help   |   Feedback   |   Video Reprints
  Data is a real-time snapshot   *Data is delayed at least 15 minutes

Global Business and Financial News, Stock Quotes, and Market Data and Analysis