Projo revenue nearly steady; Dallas CEO says it’s ‘not for sale’December 3rd, 2013 at 1:07 pm by Ted Nesi under Nesi's Notes, On the Main Site
The Providence Journal’s advertising sales continued to decline by double-digits this past summer amid industry upheaval, but the impact was largely offset by a growing number of printing and distribution contracts.
The Journal’s ad revenue was down 10% between July 1 and Sept. 30 compared with the same period in 2012, parent company A.H. Belo disclosed in an SEC filing. Quarterly ad sales fell to $9.4 million, a decrease of $1.1 million.
Total third-quarter revenue at The Journal from all sources was down just 1% from 2012, falling to $22.7 million. Circulation revenue fell 0.5% to $8.8 million. Printing and distribution contracts surged 25% to $3.6 million thanks to new distribution contracts for various other papers and magazines obtained in July from a settlement with another distributor.
The Journal’s average weekday circulation fell from 83,733 to 76,447 during the six-month period ended Sept. 30, according to the most recent report by the Alliance for Audited Media. The paper’s Monday-to-Friday circulation has dropped 47% over the last six years as Rhode Island’s economy struggled.
A.H. Belo sold The Press-Enterprise in California, one of its three major newspaper divisions, last month. But in a November conference call with investors, A.H. Belo CEO Jim Moroney reiterated comments he made about The Journal’s future when The Press-Enterprise sale was announced in October: “I said The Providence Journal was not for sale at the time of that interview.”
“Okay. So at the time of the interview?” asked Chris Mooney, an analyst with Esposito Global.
“Yes,” Moroney replied. He later added: “Providence still is a good financial contributor to our company, and that’s really where we are.” Ali Engel, the company’s chief financial officer, noted that The Press-Enterprise had “been profitable, but to a much lesser extent than the Providence and Dallas properties.”
It’s unclear whether A.H. Belo’s calculus could change.
Moroney said in June that selling The Journal or The Press-Enterprise was not on the “near-term agenda” of A.H. Belo’s board, while emphasizing that “our job as fiduciaries for shareholders is to make sure we’re looking at all the options about how to return the best value to them. You have to put everything on the table.” The California paper was sold within four months.
The Journal has remained profitable in part through ongoing rounds of cost-cutting to keep expenses in line with revenue. The paper laid off 11 employees in October, and 16 other workers accepted buyouts.
The Journal said revenue from home-delivery circulation rose in the third quarter, as an effective rate increase of 12% more than made up for a 9% decline in sales volume. Revenue from single-copy circulation decreased, however, as a 3% increase in effective rates failed to offset a 10% decline in sales volume.
A.H. Belo is also still trying to sell its Rhode Island real estate.
“We then have properties in Providence, a couple parking lots in downtown Providence, and we continue to pursue a sale-leaseback on the Providence Journal building itself,” Dan Blizzard, a top A.H. Belo executive, told investors. “And then we have a vacant piece of land, which is across the street from the production plant in Providence that’s also on the market that would be a kind of a mid-rise, or mid-box retail usage.”
• Related: Chart: The Projo vs. The Boston Globe since the downturn (Aug. 15)