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Economics

Economics

By the Project for Excellence in Journalism and Rick Edmonds of the Poynter Institute

Newspapers continued their weak economic performance in 2007. Advertising revenues fell by an average of about 7%.1 Earnings were down again, slightly more than 10% measured by earnings per share at public companies.2 Stock prices for public companies plunged for a third straight year, losing 42% of value cumulatively over the three years.3 The coming year’s prospects were for more declines in revenue and earnings – and that was even before recession was in the air.

Gallows humor making the rounds in the industry sums it up, “If you liked 2007, you’re going to love 2008.”

The short- and mid-term gloom may not be the worst of it, however. Doubts crystallized in 2007 over whether the industry can count on Web revenues – by themselves or with print — to support a vigorous and comprehensive news report.

Here are the issues:

■Online advertising growth slowed throughout the industry and, in some markets, newspaper sites experienced declines (mainly because sales related to print classifieds were way down). For the year, the industry’s online advertising grew a little less than 20%, compared to more than 30% for several years before.4

It is evident that much online reading is done in quick bursts, leaving not much time to browse the ads, which may not be nearly as reader-friendly as their print counterparts. Much traffic now comes through search rather than the “front door” of a home page. A substantial share of those readers live out of market and thus is not of use to local advertisers.

■Except for wire-service licensing fees charged to news aggregators, the industry is no closer than ever and may be farther way to charging for content – both costly to produce and the core of its franchise.

With the print-only business model broken, newspapers have no choice but to develop the multimedia content of their web sites, harvest online advertising wherever they can find it and invent profitable side businesses. Does that add up to enough money to support a volume of quality work in the public interest?

Possibly, some day. For the moment, the newspaper industry is profitable — less so than it once was — but still significantly so. And it is, online and print combined, still generating advertising revenue of roughly $45.5 billion a year.5

Advertising Woes–Real Estate is the Bleeding Edge

The fundamental reasons for decline have not changed. (See last year’s report.)

In brief review, the problems are as follows: Mergers and restructuring of American retail industry have permanently diminished retail display advertising. There are many fewer department stores and a continuing 25-year share of market shift to Wal-Mart, a very light newspaper advertiser. Robust insert business, much of it from big-box stores like Best Buy or Circuit City, brighten that picture somewhat, and smaller-circulation papers have done well retaining local merchants as advertisers. But part of that retail advertising base of the business is gone due to changes in retailing. .

And newspapers can no longer raise ad rates aggressively, a cornerstone of the prosperous 1980s and 1990s. The industry has simply lost too many readers and has too many new competitors. The comparatively good news here is that newspapers have not been forced to cut ad rates despite lower circulation. That reflects a strength often overlooked — the appeal of the print buy, for sales and price information particularly, keeps most of those advertisers coming back.

Being able to sell to online sites and niche publications gives the sales force an extra card to play with established customers, but those ads are at much lower rates than traditional print, so the gains in revenue do not make up for the losses.

National advertising has held up reasonably well, though it ebbs and flows and is likely to take significant hits in 2008 with a recession.

The worst damage has been to classifieds, which once accounted for 40% of advertising revenue and was a particularly profitable segment.6 If it were not for the declines in classified, indeed, newspapers would face only moderately difficult revenue problems.

Newspapers have lost market share to electronic classified rivals, which exist in every major category. These online competitors, often by definition are made to be searched and thus are a perfect match to Web-based commerce.

In employment/recruitment, the biggest losses came early in the decade with the rise of Monster.com. Newspapers have regrouped to a degree, partnering with industry-owned CareerBuilder and this year with Yahoo HotJobs and even Monster itself. This amounts to sharing a business the industry once had to itself, and 2007 marked another year of decline, almost 20% in the third quarter, the most recently reported.7 (We are not aware of a reliable figure for total share of employment advertising lost to online competitors over time.)

Automotive is another problem child, unlikely to get better soon. The weakness in the U.S. car industry hurts; there are fewer local dealerships, and these get smaller advertising allowances from parent companies. Marketing studies show that buyers now also make heavy use of company Web sites, most of which now offer a version of “design your own car.” The forecast is for continuing shift to new media marketing.

As recently as 2006, real estate classified was in positive territory, up 20% for the industry.8 But with the housing bust of 2007 came an advertising collapse, too. Revenue was down as much as 40% in former boom markets like California and Florida; newspapers in those states had the worst year-to-year total advertising revenue declines.9

One rival, Craigslist, free for everything but some employment listings, has hurt in several of these categories. It has gobbled share in general classified and is a presence in real estate, cars and employment as well.

As the situation for classified worsens, gutting what was once the most important financial leg of the industry, managers now frankly admit they do not know where the bottom is.

Finally, newspapers retain a lot of advertising volume – about $42.5 billion in print and $3 billion more online in 2007, compared to a peak of $49.2 billion in 2000.10 That does not sound like a huge loss, but adjusting for inflation, by our calculation, the print side is down about 20% over those seven years with further losses on the way in 2008.11

You can still make a business out of that if cost structure can be reduced without grievous damage to the revenue stream. That, however, is no easy task.

Daily Newspaper Ad Expenditures, 2003-2006
Design Your Own Chart
Source: Business Analysis and Research, Newspaper Association of America
Print vs. Online Ad Expenditures
Design Your Own Chart
Source: Business Analysis and Research, Newspaper Association of America

Costs – Deeper Cuts Quickly

In earlier editions of this report, we have discussed cuts in news investment in depth but otherwise looked at costs elsewhere in newspaper operations only in summary form, noting the trends in big-ticket items like paper or employee health benefits.

In 2007, however, the industry’s cost structure came center stage, and 2008 is certain to see more urgent and novel plans to save money.

As noted in the audience section, newspapers have tried to cut costs, both by eliminating circulation to distant areas and reducing churn, the amount of money spent to aggressively sell new trial subscriptions at discounted rates to sustain circulation at current levels.

Now, executives are beginning to look at many more places in their operations to cut costs than ever before. McClatchy’s CEO, Gary Pruitt, was asked at the December investors meeting: if he were starting from scratch, how would he structure business differently? His answer: news and advertising are core functions that need to be in the company. Everything else is up for grabs.

In late 2007, McClatchy acted on that principle when its flagship Sacramento Bee outsourced advertising production (the design and production of advertising that is not “camera ready” from the advertiser) to India. A wave of outsourcing is now well under way industry-wide with functions like call centers or payroll sent elsewhere if there are savings to be realized.

Some companies have quietly shifted to subcontracting printing rather than owning their own presses. For instance, the struggling Boston Herald is now printed by its rival Boston Globe and the Chicago Sun-Times by the Chicago Tribune.

Another maneuver to avoid outright losses is selling what can be comfortably disposed of. McClatchy’s Miami Herald was one of several newspapers selling land it had banked in better times for expansion. The Philadelphia Inquirer announced it was considering selling its whiter-than-white office tower at the edge of Center City and leasing back space it needs (no longer the whole building).

The St. Petersburg Times said in January 2008 that it would sell the profitable CQ Press book subsidiary of its Congressional Quarterly. Sam Zell indicated that the Chicago Cubs would be sold as he took Tribune private. The company’s Connecticut papers in Stamford and Greenwich were dealt to Hearst in late 2007, and analysts speculate more deals are in the offing if Tribune is to cover the heavy interest expense of the transaction and still make a profit.

Landmark Communications, based in Norfolk, Va., and publisher of papers there, in Roanoke, Va., and in Greensboro, N.C., was put up for sale in early 2008.

We also are persuaded, as we will discuss in the Ownership section of this chapter, that more companies would be selling off some of their newspaper holdings were the pool of buyers more robust. But the pool is not robust, so the focus will be on less depressed assets and more rounds of reduction in support staff, news staff and paper use.

Reducing paper use is important because after a flat 2007, newsprint prices are expected to rise slightly in 2008 and by 9% in 2009, dampened a bit by weak demand.12

And efforts at holding down wages, health and pension benefits — the focus of cost cutting in the past — will continue in 2008 as well. The Star Tribune of Minneapolis took the unusual step of announcing that it has retained consultants who specialize in drawing unions into a planning process for the future. Inflexible work rules that add expense and slow down change are particular targets in 2008.

There is in place a cost structure that worked for many years but is a straitjacket now. Paper and production costs account for nearly 25% of total expense. Circulation sales and billing together with fleets of trucks and delivery employees throwing papers on the front lawn account for 10% more.13

But unless papers are ready to eliminate their print edition, there is a limit to how much these costs can be reduced. You can shrink the physical size of the paper. You can outsource printing. You can reduce the ratio of news to ads, though that clearly weakens the product. But you still have the cost of printing and delivery .

The Growth in Online Revenue — How Much Upside?

The question that has dominated industry conversation for the last five years is how much online advertising will grow to make up for the losses in print and the migration of readers to the new platform.

Even as online advertising experiences bumps of its own, revenues continued to grow in 2007 at a rate of about 20%. That is a significant drop from the 30%-plus in previous years. Some of the slowing is simple math — a dollar gain that yields 33% one year, amounts to only 25% the next.

Another factor is that much of the rest of the slowdown traces directly to classified advertising troubles. Fewer print classifieds translate to fewer opportunities to sell a related online ad. If some categories of classified – like real estate — pick back up, so may some of the related online business. However, with classified still accounting for 60% to 70% of ad revenues at many sites, the industry’s wagon is currently hitched to a fast-falling star.14

Some analysts like Gordon Burrell see the action in local online advertising shifting to search and even local video. Newspapers have not made much of a dent against Google in local search. But they are doing as well as any competitor in the nascent area of local video – and advertising that precedes video news clips is a healthy business.

Even if you are skeptical (as we are) that the volume and direction of online advertising can be accurately predicted years out, most would agree that the game is in early innings and fluid. It strikes us as overly dour and premature to contend that newspapers have missed the train. There is likely to be plenty of business in play in years to come.

On the other hand, Borrell, Deutsche Bank analyst Paul Ginocchio and others including the industry’s own influential Newspaper Next project fault the business side as slow to change and especially slow in adding online sales specialists,

In early 2005, the co-author of this chapter, Rick Edmonds, projected that if revenue growth trends at that time continued, online revenues would take a dozen years to surpass print.15 Since then slow growth in print advertising revenue has turned to accelerating loss. And the online growth rate has slowed sooner than many expected. Today, using the same formula, the lines of the two revenue streams cross sooner, though that is still years away.

Perhaps more important, those lines cross at a much lower point on the graph — meaning the newspapers industry in print and online combined will have shrunk. Around 7% of revenues were lost in 2007 alone, and McClatchy has announced it expects year-to-year ad revenue declines in the double digits in the first quarter of 2008. Though the out years might stabilize or might get worse, what once was a $60-billion-a-year industry (including circulation revenue) will be $50 billion or less sometime in the next decade.

Thus the future depends both on improving the quality of the product online and finding new kinds of revenue streams. In other words, the industry, if it wants to thrive, cannot wait for the current business model to play out.

What are the prospects? At the moment, they are difficult.

Online classifieds, with their close connection to print classifieds, are no basis at all for growth. But display advertising may have limited potential as well. The Newspaper Association of America has nicely documented that print ads are welcome by readers, and that readers may come first for the news content but look at the ads as they leaf through (and also hunt the inserts for bargains).

There is no such match online. Most visits are quick ones, not conducive to scanning the ads. Many of the ad themselves are intrusive – dancing mortgage offers, curtains that roll down over content, sound or video activated by moving the mouse from one part of the home page to another. Also, a Catch-22 becomes apparent as the volume of advertising increases. There are only a limited number of display positions on the home page and some sites find themselves “running out of inventory” of available space.

Visitors who do want to sample ads may go straight to the category they care about – job listings, for instance –never seeing the rest of the site. Similarly, people coming to a site as part of a content search will most likely look only at the single ad displayed alongside. And the visitor may be from Madrid.

For all that, online display advertising continues to grow at a healthy rate. The Newspaper Association of America is trying to make the case that while search may be the final jumping off point for an online transaction, other forms of advertising build awareness of the product or service for the buyer. Because the price of prime Google search terms has soared, the association reasons, a balanced mix of search and other online advertising programs should have increasing appeal.

More than 400 participating daily papers now are pinning great hopes on the partnership with Yahoo. The arrangement, started in 2006 with a much smaller group, makes placing national ads in multiple papers’ Web sites (now next to impossible with separate billing and varying specifications) an easy one-stop buy on a common platform. For example, Nike could place spots on the high school sports section of as many of the sites as it wishes. Optimists, among them Ginocchio, think online could increase 20% in one year for the participating papers.16

But, as with many online initiatives, the scale of new things to continuing losses is discouraging. “I expect to do $1.8 million to $ 2 million in new business,” one publisher told us, “but my auto once was $18 million and now is $8 million.” So it would take the equivalent of five Yahoo partnerships just to get back to even.

There is an assortment of other online revenue opportunities in the oven, but it is hard to forecast what will come of them. Local search advertising has been identified as a potential growth area for years, but has yet to arrive in a big way for newspapers. Google is a lot quicker and simpler way to find what you are looking for. A few papers, notably the Atlanta Journal-Constitution with its kudzu.com, are venturing to commerce-only sites, where the content is ads and listings with a sprinkling of viewer comments and reviews (as one finds on travel sites). The Philadelphia Inquirer has launched an Amazon-like site, titled Zeppy, and the Charleston (S.C.) Post and Courier has established a general shopping site, PalmettoBizBuzz.com.

The Chicago Tribune took the step in January 2008 of moving employment classified to online-only on weekdays, and others may follow.

Borrell believes that local video advertising will rise from a tiny base now to a hot format over the next five years and that nimble newspapers are in a position to get a good share of the action. (And they had better, according to Borrell, because he predicts that classified and local display will not only stagnate but decline). A typical video ad might be for a local car dealership, partly promoting service, good deals and the like, and part a demonstration drive of the latest models.

The lines between ads and content can be fuzzy in the typical online page design, and online editors say they are besieged with proposals for content/ad packages — for instance a driving trip around the world, sponsored by a manufacturer and using its car. Online business executives, charged with growing this engine of future earnings, are eager to explore, but editors want to maintain, at least in part, the traditional wall between the news and business side in print.

A year ago, we discussed high hopes for the Newspaper Next project, sponsored by the American Press Institute, urging newspapers to get innovation in their bloodstream, testing many ideas for “jobs to be done” for both readers and non-readers, traditional advertisers and the host of businesses and services that do not advertise.

The concept was well received. In 2007 many newspapers set out to find ideas that were workable anywhere or were particular fits to their market. An early favorite, widely adopted by Gannett papers and others, is to create a site for busy moms. There is a natural mix of how-to features and listings of after-school activities or summer camps that quickly attracts an audience. Mothers, the thinking went, like to chat and thus contribute additional content. A targeted audience that visits with some frequency, in turn, draws specialized advertisers who might not be able to afford the print paper or the general news Web site.

And indeed mom sites make a good little business, but with an emphasis on little. The revenue enhancements are modest, and publishing executives concede they will need 20 or 30 such successes to make up for the print revenue falling off the table. And it is unclear there are 20 or 30 good such opportunities there for the taking.

Stephen Gray, director of the Newspaper Next project, was on the road most of 2007, doing workshops. In an interview, he conceded some disappointment that many experiments to date have been slower and smaller as money-makers than he had hoped. But he still sees merit in the idea that newspapers can evolve into a sort of “local information and connection utility” for their communities, some of that information news, much of it not.17

More drastic scenarios

Once, as futurists imagined the delivery of news digitally, they thought the savior of the news business would be the elimination of those brick and mortar costs — printing, production and delivery. The future of news, they imagined, was bright, because the cost of producing it would go down. That future seems much more cloudy in 2008 than it might have in 1988 when all that was just theoretical.

How close are we today to that more radical cost solution – discontinuing publication on some days or eventually pulling the plug on print entirely, hoping that by then print readers and advertisers will follow to an online-only version?

Newspaper executives have been saying for years that if the audience for news moves online, they are prepared to follow them there. Even if that means the end of the print editions. Do they really mean it?

In 2008, the conditions are lining up so that, at least on certain days, papers may actually begin to experiment with just that scenario.

As will be discussed at more length at the end of this section and the next on ownership, profits have deteriorated rapidly over the last two years. Some newspaper companies are highly leveraged with debt they took on to make acquisitions at prices that looked reasonable at the time but now appear way too high. They could have difficulty making their interest payments in 2008.

Should newspapers see possible default in their near future, incremental changes will probably not be enough, and the stage would be set for a more radical solution.

The math on pulling the plug on print is straightforward. The savings on paper, production, circulation sales and delivery would slice at least 35% off a typical newspaper’s expense base in one swoop.18 Online production systems and capacity are not without costs of their own, but added revenues drop quickly to the bottom line. (So, even maintaining print and online editions, companies like MediaNews have said they now see the majority of earnings coming from the electronic side within a few years).

Discontinuing print would only make sense, however, if the savings were greater than the loss of advertising and circulation revenue. Given the perceived effectiveness of print as an advertising medium, and the fact that the paper still provides more than 90% of revenue while the Web sites contribute less than 10%, the industry appears not to be at a point yet where most of the advertisers (or all the paid subscribers) would follow over to the online alternative.

A more likely scenario would be for some papers to discontinue daily editions on the lightest readership and advertising days. That would save paper and allow shrinking production and news staffs with only five days instead of seven in the working week. The proposition to readers would be that they could keep current with a more compact report on the Web site, a pattern some readers have probably already adopted.

There has been discussion in the industry for several years of the eventual possibility of dropping print publication some days. We wouldn’t be amazed to see at least a few papers making this move in 2008 or 2009.

If a pattern of phasing gradually from print to online does develop, Sunday editions will be the last to go. They provide as much as 50% of advertising revenue at some papers and are the focus of the insert business, which continues to thrive.

Profits and Stock Performance

It used to be that newspaper operating profits averaged above 25% and were routinely described by industry stalwarts like Davis “Buzz” Merritt or Jim Ottaway as “obscene.”19 That is certainly yesterday’s news. By 2006, pretax margins for newspaper companies whose stock is traded on the exchanges were down to 18.5%.20 As year-end 2007 figures began to come in, mid-teens appeared typical, and 2008 was expected to be worse. Early in 2008, Goldman Sachs analyst Peter Appert wrote that since a recession now seems probable, he was knocking an additional 5 percentage points off his estimate for revenues and expected “accelerating earnings declines.”21

Several points put this falling profit trajectory into perspective. While an analyst or an investor wants to know operating results (earnings before interest, taxes, depreciation and amortization, known as EBITDA), at the end of the day companies do need to pay out taxes (typically 35% to 40%) and interest on their debt. So the sky-high margins of yesteryear do overstate a bit. Taxes will fall along with earnings, but interest payments are becoming a big, threatening factor for companies with a lot of debt like McClatchy, Tribune, MediaNews and Journal Register.

These falling results would be even worse except for the boost for online operations. As we have discussed, that contribution is leveling or even slowing — and there is no easy way for companies to disentangle themselves from print and its cost structure (which, in any case, continues to provide more than 90% of revenue).

Analyst Ginocchio has written that as much of the ad revenue declines of 2007 were cyclical.22 That portion, especially as real estate recovers, should be back eventually, although not in a 2008 recession. The structural changes in classifieds that are the heart of the print advertising problem are another story. Classifieds are clearly going to fall some more in 2008. Industry executives can hope classifieds level off to a smaller but stable base, but that’s no sure thing. Conceivably, the rate and volume of losses could even accelerate.

Finally, an industry average of profit margins in the mid-teens masks the range of results that find a number of papers in deep trouble. Smaller-circulation papers are beginning to feel the competitive pain but never were as reliant on classified as the big metros. Lee closes its fiscal year in September and most of its papers had 20% pretax margins for 2006-07. But acceptable results elsewhere do not do you much good in San Francisco, Seattle, Minneapolis or Philadelphia, where publishers are already losing money or in danger of dipping into the red in 2008.

Stock Values

Given all these factors, the stock market gave newspaper shares a drubbing for a third straight year. Cumulatively, the remaining publicly traded companies have lost 42% of their value from the start of 2005 to the end of 2007, and 2008 started with more of the same.23 The table below provides details.

Stock Values, Select Newspaper Companies

Company 12/29/06 12/31/2007 % Change 2-Year Peak Decline from Peak
Gannett

61

39

-36%

65 (1/06)

-40%

New York Times

24

17.5

-27%

29 (2/06)

-40%

E.W. Scripps

50

45

-10%

53 (1/07)

-15%

The McClatchy Co.

43

12.5

-71%

59 (1/06)

-79%

The Washington Post

746

791

6%

858 (11/07)

-8%

Lee Enterprises

31

15

-52%

37 (1/08)

-59%

Journal Communications

13

9

-31%

14 (5/07)

-36%

Journal Register

7

2

-71%

15 (1/06)

-87%

Media General

37

21

-43%

51 (3/06)

-59%

Belo Corp.

18

17

-6%

23 (1/06)

-26%

Gate House Media

19

9

-52%

22 (4/07)

-59%

Source: Yahoo Finance
Stock values are rounded to whole dollars and percentage change calculated on that basis.

The one company whose shares were up for the year was Washington Post. Its flagship newspaper shares the typical negatives of the industry, despite a Web site that is strong both editorially and financially and reaches a national and international audience as the printed Post does not. Investors like the company’s fast-growing Kaplan education business, which has passed the newspaper as the biggest source of revenues, plus its highly profitable television stations.

Hardest hit were McClatchy and Journal Register (which owns small papers in New England, the Philadelphia suburbs and Michigan). Each is exclusively in the business of newspapers and Web sites and is facing a daunting debt load besides .

Several companies raised their dividends. GateHouse Media continues to lead the pack, paying out a robust 40 cents a share, quarterly, even as its share price has fallen to roughly $6, and Wall Street has begun questioning the wisdom of its continuing acquisitions.24

Conclusion

We don’t affiliate with the doom-and-gloom club like retired Knight Ridder executive Rob Reed, who delivered a lecture to a local senior citizens’ group in Battle Creek. Mich., titled “Are Newspapers Near Death?”25

No, they are not. There is life, earnings and maneuvering room in the industry. Even weakened, newspapers remain the top source of news for their communities. The editorial inroads of community-based online publications are patchy geographically and have been slow in coming.

Still, 2007 and early 2008 were a time were the road ahead looked harder, and doubts developed over whether an online revenue rescue of the news enterprise will indeed materialize.

The best bet for a 2008 strategy would seem to be balance – urgent attention to finances but taking care not to destroy what is essential for longer-term viability. And much of the brighter future that may on the other side of a print-to-digital transition still remains to be defined.

Footnotes

1. Richard Perez-Pena, “Paper Cuts,” News York Times, February 7, 2008.

2. Peter Appert, “Newspaper Trends and Outlooks,” Goldman Sachs analyst’s report, December 12, 2007.

3. Yahoo Finance, January 2, 2008. Cumulative total for three years calculated form 2006 and 2007 State of the Media reports

4. Newspaper Association of America, “Online Newspaper Advertising Growth Continues,” press release, November 20, 2007

5. Newspaper Association of America, Trends and Numbers, Advertising Expenditures, at naa.org. NAA figures are through 2006. Adjusted for reported print losses and online gains in 2007.

6. Newspaper Association of America, “Annual Newspaper Ad Expenditures” Year-end 2005 over 2004 total retail ad spending increased by .8%. The first three quarters of 2006 were as follows: 1 st quarter showed (-1%) growth, 2Q (1%), and 3Q (-.3%)].

7. Ibid.

8. Newspaper Association of America, “Online Newspaper Advertising Growth Continues,” press release, November 20, 2007

9. Newspaper Association of America, “Newspaper Classified Advertising Expenditures” cited in 2007 State of the Media.

10. Newspaper Association of America, Trends and Numbers, Advertising Expenditures, at naa.org. NAA figures are through 2006. Adjusted for reported print losses and online gains in 2007.

11. Richard Perez-Pena, “Paper Cuts,” News York Times, February 7, 2008.

12. Peter Appert, “Newspaper Trends and Outlook,” Goldman Sachs’ analyst’s report, October 2, 2007.

13. These estimates are discussed by co-author Edmonds in “Pulling the Plug on Print.” Poynter Online, December 3, 2007.

14. Paul Ginocchio, e-mail to co-author Edmonds, November 2, 2007.

15. Rick Edmonds, “An Online Rescue for Newspapers,” Poynter Online, January 27, 2005, and Rick Edmonds, “The New Bottom Line: 25 Percent Online Revenue by 2011,” June 23, 2006

16. Paul Ginocchio, “”Yahoo Deal Impact Could Be Greater Than Expected,” Deutsche Bank Securities analyst’s report, September 21, 2007.

17. Rick Edmonds, “What’s Next For Newspaper Next,” Poynter Online, November 13, 2007.

18. Edmonds , “Pulling the Plug on Print,” see footnote 13.

19. W. Davis Merritt, Knightfall, AMACON (American Management Association), 2005, page 224. Ottaway is cited in Adam Kushner, “Interview with John Morton, IFRA Magazine, December 2007.

20. Karl Choi, Merrill Lynch analyst, e-mail to co-author Edmonds, February 25, 2008

21. Peter Appert, “Reducing Estimates (Again) Given new Recession View,” Goldman Sachs analyst’s report, January 9, 2008

22. Paul Ginocchio, “Don’t Believe the Hype, Some of the Downturn is Cyclical,” Deutsche Bank Securities analyst’s report, July 20, 2007.

23. Yahoo Finance, January 2, 2008. Cumulative total for three years calculated form 2006 and 2007 State of the Media reports

24. “GateHouse Announces Third Quarter 2007 Results and Fourth Quarter Dividend,” press release, November 13, 2007.

25. Stephanie Antonian Rutherford, “Can Newspapers Survive in a Digital World?,” Battle Creek Examiner, January 11, 2008.