Newspapers Are Doing Quite Well, Thank You

For all the doom and gloom about the newspaper business, especially on Wall Street, readers might be surprised at just how profitable they are. Allen Mutter did the analysis, and while he notes that more cuts are coming as sales fall this year, the margins aren’t anything to sneeze at:

…the average operating profit among the six publishers is 18.5%, as measured by earnings before interest, taxes, depreciation and amortization (EBITDA). For all that ails the industry, this surpasses the EBITDA of such companies as Chevron (18.7%), Boeing (11.2%), Wal-Mart (7.7%) and Amazon.Com (6.0%).


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7 responses to “Newspapers Are Doing Quite Well, Thank You”

  1. microdermer says:

    Wow, the NYT needs to do some major expense trimming. A 6.2% decline (most modest of the six examined companies) in sales revenue results in a 35% decline in operating profit (the second worst decline).

  2. Steve says:

    I cannot convince the bank that my 98% margin on pre-minted orange tabby anus burgers is reason enough to give me a business loan. Wankers.

  3. richard says:

    Belo is a great buy for those with a little courage. As Mr. Buffett as taught us, “be greedy when others are fearful and be fearful when other are greedy”.

    The DMN is still a one paper town with a large though “moat” protecting the business.

    And one more thing, in “global or national headlines”, I know a “Yahoo” wins but why wouldn’t “win” when it comes to local headlines. With all this talk of all these deep pocketed advertisers spending money on the internet, why wouldn’t their “spend” be properly porportional to Shouldn’t they be “rapidly” increasing their internet revenues? Are they?

  4. publicnewsense says:

    Best sign you could see at the Belo Bldg?
    “Under new management”

  5. Roman says:

    Here is why the decline of newspapers:
    L.A. Times’ reporters banned from reporting on
    news of John Edwards’ love child and mistress.

  6. Newspaper Guy says:

    Richard –

    Yes, online profits for Belo are up. Way up. But, they are not up as far as print revenue is down.

    There is a huge difference in the two vehicles (print and online advertising).

    Print is something that requires surveys of readership. Just because someone reads the paper, Belo can ask you to assume they have seen your ad. And, the stats assume 2.4 people read each paper. Do you honestly think 2.4 people see every ad in a single copy of the Dallas Morning News? Of course not. But, that’s the way they back into their advertising prices (to keep the CPM – Cost Per Thousand) down. Seems like a good buy.

    Online is completely different. Because the ads are served through an ad manager, the software tracks how many times it actually loads on a screen. So, the DMN cannot ask an advertiser to assume an has been seen once by each reader of the online paper today.

    So, when you do the math, they lose money when a story is read online rather than in print. They will eventually have to suck it up and take the hit, but I imagine they will kick and scream all of the way.

  7. Kirk says:

    Comparing Belo’s EBITDA margin to an oil company’s or Boeing’s makes about as much sense as comparing D Magazine’s EBITDA margins to Starbucks’. It’s a ridiculous argument, and it proves nothing. The flip side is also being used by some oil companies to postulate that they really are not making all that much profit.