Projo’s finances stabilizing; new contracts offset $3M ad lossAugust 2nd, 2012 at 3:05 pm by Ted Nesi under Nesi's Notes, On the Main Site
PROVIDENCE, R.I. (WPRI) – A growing number of contracts for printing and distribution gave The Providence Journal a slight bump in revenue during the first half of this year despite a deep drop in springtime advertising revenue.
The Journal’s total revenue rose to $46.7 million during the six months of 2012, an increase of $597,000 or 1.3% compared with the first half of last year, according to a Securities and Exchange Commission filing this week by its parent company A.H. Belo.
The share of total Journal revenue that came from advertising fell below 50%, a symbolically important milestone in light of newspapers’ historic reliance on advertisements to pay the newsroom’s bills. Printing and distribution contracts’ share of revenue jumped to 13% and circulation accounted for 37%.
The Journal is one of many papers with a changing revenue mix, said Ken Doctor, a media analyst with Outsell. “All are seeing rapidly increasing percentile contributions from circulation – or what we should call reader revenue,” he told WPRI.com. “Projo is at the leading edge of change, probably due more to ad decline than [its] digital circulation program.”
The Journal’s half-year advertising sales fell to $23.2 million, down by nearly $3 million compared with 2011, with declines in every category. The paper said increased home-delivery mail advertisements and online classified ads for cars partly offset fewer retail ads and newspaper inserts. The 13% year-over-year decline in the second quarter was the largest since early 2011.
The Journal’s revenue from third-party contracts nearly doubled from $3.5 million to $6.2 million in the first half of the year, offsetting almost the entire drop in advertising. The paper credited increased distribution of other newspapers’ daily editions and more commercial printing contracts from both existing customers and a new regional newspaper client.
The Journal’s weekday print circulation fell to 85,496 copies a day in the six months ended March 31, down 7% from a year earlier, according to the Audit Bureau of Circulations. The paper, which put up a paywall in February and limits its Web articles to short news briefs, said it sold 273 subscriptions to the new electronic edition through the end of March.
During a conference call with investors Wednesday, A.H. Belo CEO Robert Decherd said advertising results may continue to be volatile for the rest of this year, which the Dallas-based company will address with “prudent expense management.”
“I think our team has done a very good job in the last four and a half years and continues to do so,” Decherd said. “What frustrates us is that the rate of decline and poor revenue at our three newspapers has been inconsistent, and we’re in two very challenging markets in Providence and Riverside.” (A.H. Belo also publishes The Press Enterprise of Riverside, Calif.)
“Providence has held its own in a very difficult local and state economy that is not improving,” Decherd said. “The local economic conditions there are not good and they’re not improving. … We’re doing very well under the circumstances. We’re proud of how well we’re doing.” The company’s top priority for its free cash will be regular and special dividends, he said.
A.H. Belo also said The Journal will receive a $2.5 million tax credit from the city of Providence under a newly approved judicial consent judgment relating to “overpayment of property taxes from prior years.” The money will “be applied against future property tax payments,” the company said.
Decherd said A.H. Belo is continuing to look at selling real estate. The Journal’s five-story, nearly 200,000-square-foot building at 75 Fountain St. opened in 1934 and has an assessed value of $13.8 million. In 2010 the company made an unsuccessful bid to sell it to the city for $9.75 million or lease it out for $1.17 million a year.
• Related: Projo’s print circulation down another 7%; fewer visit website (May 1)