Projo falls below $100M mark as half of ads evaporateMarch 14th, 2011 at 7:00 am by Ted Nesi under General Talk
The Providence Journal is a much smaller business today than it was half a decade ago.
The Journal’s total revenue dropped for a fifth straight year in 2010 to $99.9 million, parent company A.H. Belo disclosed in an SEC filing late Friday – the lowest amount in at least 15 years and perhaps far longer than that after adjusting for inflation.
The $99.9 million total was off 40% from 2005, when the paper booked $166 million in revenue. Its annual revenue was $125 million back in 1995, archived SEC documents show.
The Journal’s advertising sales plunged by more than half between 2005 and 2010, from $137 million down to $60 million, the filing said. Ominously, even digital advertising on Projo.com and its affiliate sites declined significantly, falling from $9.7 million in 2008 to $7.6 million in 2010.
Circulation and printing/distribution revenue has increased over the same period thanks to price increases and new contracts. Here’s a chart breaking down The Journal’s revenue picture:
The good news for The Journal is that the pace of its financial deterioration is slowing down. While advertising sales fell 10.1% in the fourth quarter of 2010 compared with a year earlier, that was the smallest decrease in three years. And last year’s 5% drop in total revenue was far below the declines of 20% in 2009 and 14% in 2008.
A.H. Belo executives, like their peers at other publishers, are trying to become less reliant on advertising revenue as more of that spending moves online, and they’re turning to readers to make up some of the difference.
Advertising sales made up 82% of the Projo’s total revenue in 2005 but only 60% in 2010, while circulation’s share of the shrinking pie doubled from 17% to 35%. “The company expects newspaper advertising revenues will continue to decrease in 2011, although at a lower rate of decline,” the SEC filing said.
The trend of increased reliance on circulation dollars will continue if The Journal follows through with its long-discussed plans to start forcing online readers to pay later this year. Its sister paper, The Dallas Morning News, started charging $17 a month last week to read its content on Dallasnews.com and through iPhones and iPads.
“I think you’ll see some improved performance during 2011, assuming the economy and all such things hold up,” Jim Moroney, executive vice president of A.H. Belo and the Dallas paper’s publisher, told investors in a conference call last month.
The Journal sold an average of 101,123 copies on weekdays last year, down from 163,909 in 2005, A.H. Belo said. Sunday circulation fell to 137,339, down from 231,593 in 2005, a decrease of 41%. Figures released last fall showed weekday circulation is now below 100,000.
One thing to keep in perspective – even after losing 40% of its revenue, the $99.9 million Projo is still the dominant media player locally. Annual ad revenue for all the TV stations in the Providence/New Bedford market combined totals roughly $60 million, according to BIA Financial Network.
Nor is The Journal’s situation an outlier compared with its two sister papers, The Morning News and California’s Press-Enterprise. While A.H. Belo’s total revenue has decreased from $637 million in 2008 to $487 million in 2010, the Projo’s contribution has remained basically unchanged at about 20%.
A.H. Belo declined to reveal a date for the launch of the Projo’s iPhone and iPad apps in its SEC filing, saying only that they would be introduced “at a later date.” Journal management has said the NYT-designed apps will arrive this summer.
A.H. Belo doesn’t break out how many employees each of its papers has, but the company’s work force totaled 2,200 full-time workers as of Dec. 31, down from 3,400 in 2007, plus 280 part-timers. The Journal had 562 full- and part-time employees as of March 2009 following four rounds of layoffs over the prior six months.
In a footnote, A.H. Belo also disclosed it paid $3.1 million to buy Dallas Morning News president John McKeon’s old home in California as part of his relocation agreement. The company will be hoping to have better luck selling the house than they’ve had unloading the Journal building on Fountain Street.
More Providence Journal coverage on Nesi’s Notes:
- Projo union OKs new 3-year contract with AH Belo (Feb. 16)
- No reason for Belo to sell Projo with price at $51m (Dec. 28)
- Why the Projo’s finances are healthier than you think (Nov. 18)