Projo revenue nearly steady in 2012, but ad sales are down 66%March 12th, 2013 at 5:00 am by Ted Nesi under Nesi's Notes, On the Main Site
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – The Providence Journal’s revenue losses nearly stopped in 2012 as significant growth in the company’s contracts for printing and distribution helped offset dwindling advertising and declining circulation.
The Journal’s revenue totaled $93.8 million in 2012, according to an SEC filing by its parent company A.H. Belo. The 1.4% decrease compared with 2011 was the newspaper’s smallest in at least eight years. Total Journal revenue has plummeted 43% since 2005, when the paper pulled in $165.6 million.
Last year’s bright spot for The Journal was its commercial printing, delivery distribution and direct-mail business, which has grown twentyfold since 2005 as other newspapers pay to have it produce and deliver their editions. The Journal’s printing and distribution revenue jumped 58% in 2012 to more than $13 million, up from only $1 million as recently as 2008.
However, the news about the actual printed Providence Journal wasn’t so good.
The Journal’s advertising sales plunged 66% between 2005 and 2012, falling to $46 million last year. Newspaper ad sales nationwide shrank 52% from 2005 to 2011, according to the Newspaper Association of America, compared with 61% at The Journal.
Every ad category at The Journal posted a year-over-year decline in 2012 including digital ads, which fell 13%, though the decrease in classifieds was just 3%. Display advertising in The Journal has declined from $41 million in 2008 to only $12 million last year.
Surprisingly, The Journal’s advertising losses actually picked up speed in the fourth quarter of 2012 with a year-over-year drop of 16% – the worst since the summer of 2010. Howard Sutton, The Journal’s longtime publisher, did not respond to WPRI.com’s request for comment.
The Journal’s circulation revenue looked better at first glance, rising 2% in 2012 to $34.6 million. But in a footnote A.H. Belo said the increase was actually due to an accounting change; using the old methodology The Journal’s circulation revenue fell 9% to $30.8 million in 2012. The company blamed a 7% decline in home delivery and a 9% decline in single-copy sales.
The Journal is still profitable, A.H. Belo CEO Robert Decherd told investors last month. But he warned that all three of the company’s papers will likely suffer further advertising losses in 2013.
“Providence has had the toughest sledding in the last six to 12 months because of the local economy and just all the conditions in the state of Rhode Island,” Decherd said. The Journal “will, by percentage, probably be closer to high single-digits [in its advertising decline], just looking ahead. But that’s as much visibility as we’ve got right now.”
The Journal’s revenue mix crossed a symbolic threshold in 2012: advertising now makes up less than half the newspaper’s shrinking total revenue. As recently as 2007, ads were 83% of Journal revenue. Many other papers are also moving away from relying on ads to pay the bills.
The Journal sold an average of 88,974 copies on weekdays last year, down from 163,909 in 2005, A.H. Belo said. Sunday circulation fell to 119,199, down from 231,593 in 2005, a decrease of 49%. Weekday circulation for The Journal’s niche publications ticked up to 24,310.
Citing tracking data compiled by Scarborough Research, A.H. Belo said an estimated 568,950 individuals read a print edition of The Journal, which means the paper reaches about 56% of its designated market – significantly more than its sister papers the Dallas Morning News (37%) or California’s Press-Enterprise (26%).
Overall, the results indicate Providence Journal executives have done a strong job obtaining contract work but haven’t figured out how to reverse the declining fortunes of the newspaper, despite the launch of an online paywall that offers a digital replica of the print paper to subscribers and Web news briefs to non-subscribers.
The number of Journal staffers who belong to the Providence Newspaper Guild or another union fell to 290 employees in 2012, down by 40 from the prior year, according to the filing. The Journal laid off at least 23 employees in November. A.H. Belo has cut its headcount from 3,400 full-time employes in 2007 to just 1,800 last year.
A.H. Belo reported its first annual profit in 2012, posting net income of $526,000 on $440 million in revenue. Broadcasting company Belo spun off its newspaper division in 2008 to create A.H. Belo. The company announced last week it will pay investors a dividend of 6 cents a share on June 7.
The company has been trying to sell The Journal’s historic five-story headquarters on Fountain Street for years but hasn’t been able to nail down a deal. Last fall an A.H. Belo executive said the company was exploring a $10 million sale-leaseback deal for the property.
Decherd told investors A.H. Belo is “making good headway” in its efforts to sell properties in Providence and Riverside, Calif. “There are things happening in these markets that are very encouraging,” he said. “We will get something done in one of these markets this year,” though the “order of magnitude is to be determined.”
“All of the economic analysis of the Rhode Island market says it’s going to be a couple years before it’s really moving in the right direction again,” Decherd added.