Wednesday, Jul. 22, 2009

Maybe not thriving, but definitely surviving

By Ken Robertson, Herald Executive Editor

From 1966 to 2006, a newspaper company reporting it had made a solid profit was the financial news equivalent of an airliner landing safely.

Ho-hum.

Most of our news staff never even bothered to look at the quarterly reports of the McClatchy Co., parent company of the Herald.

But on Tuesday, one of our news staff rushed into my office moments after I’d returned from a morning meeting.

“Did you see the report? It’s good news. We made good money!” he exclaimed.

What a difference a couple short years have made.

With lots of folks preaching imminent gloom and doom for newspapers, a report of what would have seemed a moderately successful quarter in the past was a relief, without doubt. And doubling the net income reported a year ago to $42 million seemed like a stellar performance.

In fact, it shocked more than a few industry analysts, who, despite another stronger second quarter report from the nation’s largest newspaper company, Gannett, had predicted losses of several million dollars for McClatchy.

“It’s really remarkable,” newspaper analyst Edward Atorino of Benchmark Co. told The Associated Press. “They have done a Herculean job in a difficult economy.”

The results were built on cost-cutting, layoffs and plenty of hard work by Herald employees and their fellow workers across McClatchy Co.’s 29 other daily newspapers.

Worth noting is that despite the recession, circulation revenues grew by $3 million, an indication readers still find important value in their newspaper, even though circulation rates increased and some subscribers left.

By no means does one company’s one profitable quarter foretell financial recovery for the newspaper industry and its old economic model.

But perhaps it does mean this: People count on the tried and true in difficult times — and that would be newspaper news and advertising.

For now, keep reading. We’ll keep reporting.

w Ken Robertson: 582-1520; krobertson@tricityherald.com

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