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Newspapers axe Monday editions as costs rise

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Bloomberg New Delhi
Last Updated : Jan 29 2013 | 2:34 AM IST

When the McPherson Sentinel stopped publishing on Mondays, the newspaper told readers it wasn’t any different from Hellman’s shrinking its mayonnaise jars or Extra gum offering two fewer pieces per pack at the same price.

Eliminating one edition allowed owner GateHouse Media Inc to avoid firing employees or shrinking the newspaper the rest of the week, the Sentinel explained in August to subscribers in the central Kansas town of 14,000.

Newspapers are pushing to save money. Circulation is shrinking, and industry print advertising sales fell a record 16 per cent in the second quarter, according to the Newspaper Association of America. Printing less often and publishing on the Web cuts delivery costs and helps counter paper prices that jumped a record 35 per cent in the past year.

“You have to sort of weigh the service versus the cost, and right now newsprint is very costly,” said Nancy Conway, editor of MediaNews Group Inc’s Salt Lake Tribune, which reduced its early-week press runs by dropping features, merging sections and halting an afternoon tabloid. “Revenue isn't what it used to be, so we have to make some tough decisions.”

Monday issues have also vanished for readers of The Dispatch in Davidson County, North Carolina; GateHouse’s Daily Review Atlas in Monmouth, Illinois; the Star Courier in Kewanee, Illinois; and the East Valley Tribune near Phoenix, Arizona.

Advertisers “aren't stupid,” said George Sylvie, associate professor of journalism at the University of Texas at Austin. “They know that the eyeballs aren't there on Monday.”

Cooperation: Newspapers have taken other cash-saving steps. The owner of the Miami Herald, McClatchy Co, cut its quarterly dividend in half to 9 cents a share last month and announced the second round of job cuts this year. The New York Times and News Corp’s Wall Street Journal now publish on narrower pages to save on newsprint.

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Some competitors are working together. Last year, Chicago- based Tribune Co struck a deal to distribute cross-town rival Chicago Sun-Times, owned by Sun Times Media Group Inc The Miami Herald, Tribune Co’s Sun Sentinel and Cox Enterprises Inc’s Palm Beach Post are sharing news stories to fill gaps in their South Florida coverage caused by job cuts this year.

The success of these actions and the need for additional cuts will become clearer as the largest publishers disclose third-quarter earnings, starting October 16, when Tampa Tribune owner Media General Inc reports results.

New York Times: New York Times Co reports earnings on October 23, followed the next day by Gannett Co., the largest US publisher and owner of USA Today. Both posted August ad sales declines of 14 per cent or more.

New York Times may say revenue fell 7.4 per cent to $698.8 million, cutting operating profit to $16.2 million, based on the average of analysts’ estimates compiled by Bloomberg. Gannett, which also owns television stations, is forecast to report operating income of $308 million as revenue decreased 9.3 per cent to $1.64 billion.

Shares of newspaper companies have tumbled this year with the decline in advertising sales. New York Times is down 22 per cent in 2008 after gaining $1.43 to $13.60 on October 10 in New York Stock Exchange composite trading.

McLean, Virginia-based Gannett fell 50 cents to $12.87 and is down 67 percent.

In Default

The list of publishers in default is also growing. The Minneapolis Star Tribune, owned by Avista Capital Partners, missed a $9 million interest payment last month and is considering bankruptcy. Philadelphia Media News LLC, the closely held owner of the Philadelphia Inquirer, skipped loan payments this month and has been in technical default since June.

New Haven Register publisher Journal Register Co. is in talks with lenders including JPMorgan Chase & Co. as a deal to skip interest payments expires at the end of the month. The company stock trades over the counter at less than 1 cent. Freedom Communications Inc., owner of the Orange County Register in Southern California and the East Valley Tribune, said last week it may be in violation of loan agreements.

Eliminating Monday editions, historically the worst for advertising, is a step in the right direction, said Lauren Rich Fine, a former newspaper industry analyst and now a researcher at Kent State University in Ohio.

The loss of advertising generally appears to be ''picking up steam rather than slowing, and there really aren't more costs to cut,'' said Rich Fine, formerly of Merrill Lynch & Co.

Ad Outlook

Last week, Wachovia Capital Markets and Barclays Capital sliced their advertising estimates for the industry, projecting steeper declines this year and next.

The industry's changes have also been tough on subscribers.

In September, The Dispatch, owned by New York Times Co., ended Monday print issues, becoming a five-day-a-week newspaper. Executive Editor Chad Killebrew wrote in August that elderly subscribers who don't own computers worry about news only going on the Web.

''Going through such a transition is difficult, especially for people who prefer the old way,'' Killebrew wrote. ''And yet we must adapt to survive.''

Bruce Tossell, the mayor of Kewanee, Illinois, says his almost 13,000 residents would rather have their Star Courier newspaper publish five days a week than not at all. Even so, he's not a subscriber to the GateHouse publication, and instead scans City Hall's copy occasionally for the headlines and police blotter.

''It's not like we're shut off from the world when the local paper stops one day out of the week,'' said Tossell, 50, a life- long Kewanee resident. ''In a small town, gossip gets around town faster than the newspaper comes out.''

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net  

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First Published: Oct 14 2008 | 12:00 AM IST

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