Goodbye, daily newspapers in Detroit

[classicman]

Gannett Co. posted its largest profit of the year in the fourth quarter as cost-cutting efforts were aided by a lessening decline in advertising sales. But shares of the biggest U.S. newspaper publisher tumbled after company executives didn't offer any hope for an upturn in newspaper advertising this year.

The report released Monday showed that newspaper and magazine ad revenue plummeted by almost $1.2 billion, or 28 percent, from 2008. Print advertising remains Gannett's biggest source of revenue despite efforts to bring in more money from the Internet and other media.

Fourth-quarter ad revenue at Gannett's publications, which include USA Today and more than 80 other daily newspapers, fell 18 percent, or more than $172 million. That followed year-over-year declines of 32 percent to 34 percent in each of the first three quarters.

Newspaper ad sales have been deteriorating for several years, but the erosion widened dramatically beginning in the summer of 2008 as the economy headed into its worst financial crisis since the Great Depression.

The fallout has driven at least 14 U.S. newspaper publishers into bankruptcy protection. Although Gannett isn't among them, questions about the company's financial stability caused its stock to fall as low as $1.85 early last year. Those worries have faded now that the ad slump isn't getting any worse.

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I call BS. The fourth quarter is by far the best for papers as virtually every major retailer increases their spending astronomically. The first quarter of this year will tell a more accurate story.