10/4/10

Newspaper Companies Start to Think Beyond Today's Bills

The somewhat improving condition of the newspaper industry is permitting companies to move from merely paying operating expenses to finding ways to improve their balance sheets and looking for new opportunities. In recent weeks:
  • The Gannett Co. has placed senior notes totally $500 million that will be due in 2015 and 2018. The notes financed at 6.375% and 7.125% will give the company some financial breathing space by being used to pay a maturing loan and revolving credits. In addition it negotiated an extension on $2.7 billion in revolving credit with Bank of America from 2012 to 2014.
  • The New York Times Co. has cut its debt by 40 percent in past 2 years and is beginning to look at small investments in digital media that may position it for future growth. It recently provided $4 million in financing for Ongo, a start-up news sharing site that will aggregate stories from a number of newspapers.
  • The Washington Post Co. announced it would repurchase 750,000 of its outstanding shares. Such a move will increase future earnings per outstanding share and boost shareholder equity in a tax beneficial way. This type of buyback typically occurs when cash is accumulating in the company and its stock is undervalued.
All of these developments reflected the improving financial performance of newspaper companies and indications that the revenue picture for newspapers is getting better. With improved profits and dividend payments, newspaper companies, lenders, and investors are starting to step back from the brink and the reconsider the completely negative picture of newspapers that developed 3 years ago.

2 comments:

M. Huntsberger said...

A glimmer of hope for the beleaguered newspaper industry? Well, perhaps, but the legions of hometown dailies still have a long way to go to climb out of the abyss. Will Gannett use those revenues to restore it's local papers, and perhaps purchase more? I think this is good news for the strongest national outlets, but there are only a few of those. The challenge remains to provide local coverage in local circumstances.

Anonymous said...

How does it cost them
(paper & ink)to print one newspaper
and how much does they profit per
each newspaper they sell?

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www.maxgen.yolasite.com
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