VOL. 123 | NO. 220 | Monday, November 10, 2008
E.W. Scripps Cuts 400 Newspaper Jobs
The Associated Press
E.W. Scripps Co., the parent company of The Commercial Appeal, said Friday it was laying off around 400 employees nationwide.
The Commercial Appeal has identified 27 positions it will eliminate, according to a written statement issued earlier last week by the Memphis Newspaper Guild. A phone call to The Commercial Appeal’s media relations staff was not immediately returned by press time.
The newspaper has enacted several measures to offset falling revenues, including hiking subscription rates and shrinking delivery areas. The Commercial Appeal stopped home delivery to 5,600 subscribers in outlying areas last month and increased its subscription rate by $2 a month.
The decrease in circulation area followed another one in March when the newspaper halted home delivery to another 4,000 readers.
E.W. Scripps said the restructuring is expected to save about $15 million a year. It announced the layoffs when it issued its earnings report Friday.
The company swung to a third-quarter loss in a weak advertising market. Scripps said in the earnings report that its publishers had notified affected employees on Thursday.
Scripps didn’t say where the layoffs will occur, but the Knoxville News Sentinel has announced that about 50 jobs, including 13 in the newsroom, would be cut at properties of the KNS Media Group subsidiary of Cincinnati-based Scripps. The move affects about 10 percent of the KNS work force.
Companywide, employees were notified of impending cuts Thursday and the job cuts will be completed in the fourth quarter.
“These are unusual times, not without difficulty and peril,” Chief Executive Rich Boehne said in a statement.
Focusing on its financial health in the short term “will yield outsized returns over the long term for those in position to exploit the transformation of our industry,” he said.
The newspaper division remains profitable; it earned $14 million in the quarter, down from $32.7 million last year.
Scripps also said it would suspend its dividend and take other steps to cut costs. The layoffs amount to 9 percent of its total work force.
The Cincinnati-based owner of local newspapers and TV stations lost $16.8 million, or 31 cents per basic share, in the quarter compared to a profit of $88.4 million, or $1.63, in the same period a year earlier. The loss from continuing operations came to $21 million, or 39 cents per share. That compares to profit of $16.6 million, or 31 cents, a year earlier.
The quarter also included a $22 million charge to spin off its cable networks and interactive media business in July and a $25 million non-cash charge to write down its investment in a Denver newspaper partnership.
Revenue fell 9 percent to $230 million from $253 million.
Analysts polled by Thomson Reuters on average expected a profit of 9 cents per share on revenue of $241.2 million.
Scripps said it would book a $5 million charge in the fourth quarter related to the layoffs at its newspaper division.
In the third quarter, Scripps-owned newspapers saw revenue plummet 17 percent to $131 million as the advertising market weakened.
National newspaper ads were the hardest hit, down 31 percent, followed by a 28 percent decline in classified advertising. Local ad revenue was down 16 percent, and online ads fell 12 percent.
Scripps said the decline in online advertising was mainly because of ties to print classified ads. Excluding these deals, revenue from online ads rose 13.4 percent in the quarter. Circulation revenue fell 7.6 percent to $26.6 million.
As for joint operating agreements and partnerships with other papers, Scripps said revenue in this business fell to $2.1 million from $8 million.
The loss came to $3.1 million in the quarter, down from a profit of $1.7 million in this area a year earlier.
Among its television stations, revenue was up 5 percent to $76.9 million.
Political ad revenue rose nearly 15-fold as local ads fell 6.4 percent and national ads dipped 15 percent.
Scripps noted that three NBC affiliate stations were helped by Olympic advertising.
Segment profit came to $17 million, down 28 percent from a year ago.
Licensing revenue fell 5 percent to $22.2 million but profit rose 15 percent to $1.5 million.
Scripps operates 10 TV stations and daily and community papers in 15 U.S. markets.
The Daily News senior reporter Bill Dries contributed to this report.
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