One of the biggest stories in the newspaper industry recently, the U.S. International Trade Commission’s cancellation of tariffs hitting newsprint, broke on Aug. 29, well after major newspaper chains released their second quarter results.

The industry is currently seeing a number of papers cut staff, print days or pages, with many attributing their decisions to the cost of newsprint rising by as much as 30 percent. Not surprisingly, the rising cost of newsprint was cited in all the quarterly reports mentioned below.

Beyond the tariff issue, the second quarter numbers reflect a familiar trend: print ad and circulation revenue down, digital growing, but not as robustly as some in the industry had looked for. “After reporting Q2 earnings results, it became glaringly obvious that the Times' biggest growth driver — its digital business — isn't growing quite as quickly as investors would have hoped,” wrote Gary Alexander at Seeking Alpha of The New York Times.

“Most of the chains find themselves slipping farther and farther from revenue growth. This headline number tells you that digital initiatives simply are not making up for overall print revenue losses,” wrote Ken Doctor in his Newsonomics column at

Below are a few points from the quarterly reports. The companies don’t report uniformly, so the information differs from company to company. Comments from the companies’ leaders touting high points, special projects and acquisitions follow the numbers.


Gannett, parent of USA Today and owner of 109 local media properties, saw digital-only subscriber volumes grow 46 percent year-over-year to total approximately 413,000.

The company saw same-store print ad revenues fall 19.1 percent for Q2 2018 vs. Q2 2017, which Gannett partly attributed to the date of Easter. Same-store operating revenues declined 7.5 percent year-over-year, consistent with the first quarter decline of 7.2 percent, the company said. Same store circulation revenues fell 5.0 percent from the prior year quarter, consistent with the first quarter trend.

“We are excited by the continued momentum in our digital business driven by strong growth in our marketing services and national media businesses,” said CEO Robert J. Dickey in the Aug. 9 earnings release. “On July 2nd, we successfully closed the WordStream acquisition, which adds more software-as-a-service solutions to our digital marketing services product portfolio and will further propel our digital transformation that is already well underway.”

“The strong margin improvement at our ReachLocal segment and the continued focus on driving efficiencies within our publishing and corporate operations reflect strong execution on our objectives,” said Ali Engel, senior vice president and chief financial officer.

GateHouse Media (New Media Investment Group)

GateHouse, publisher of 145 daily newspapers, 340 community publications and more than 570 local market websites, saw its digital-only subscription base in Q2 grow to 121,300. That includes 32,200 digital-only subscribers from 2018 acquisitions. Excluding those acquired digital subscribers, “our growth in this category was strong at 51.9%,” the company says.

The company saw same-store print ad revenues fall 13.3 percent for Q2 2018 vs. Q2 2017. Total revenues (same-store), Q2 2018 compared to Q2 2017 were down 4.9 percent. Circulation revenue declined 2.1 percent on a same-store basis.

“The second quarter performed well across many areas of our business plan,” said Michael E. Reed, New Media CEO, in the Aug. 2 earnings release. “We had a good revenue quarter, a very strong acquisition quarter, and our new business initiatives, UpCurve, GateHouse Live and Promotions, performed extremely well. On the inorganic growth side, we closed four transactions in our acquisition pipeline that totaled nearly $118 million in purchase price and our pipeline remains strong,” he said.

“We are thrilled with the exceptional growth trends achieved within our business initiatives. UpCurve revenue grew 47.2% over prior year, excluding the impact of ASC 606. ThriveHive had significant wins within the automotive customer vertical, accelerated by our recent acquisition of Online Automotive Solutions and its tech-enabled video and data products. On the events front, both GateHouse Live and Promotions had revenue growth exceeding 65% over the prior year. May and June are very busy months for us, especially for our Best of Preps events, which celebrate outstanding high school athletes.

“With our four newspaper acquisitions closed in the quarter, our total acquisitions for the year are now in excess of $133 million. These new markets are all great additions to our portfolio, are within our acquisition criteria and valuation expectations, and are expected to drive further growth potential for our new business initiatives.”


McClatchy, which operates major local media companies in 30 U.S. markets, saw digital-only subscribers grow 34.5 percent to 122,400 as of the end of the second quarter.

Audience revenues were $84.8 million, down 5.7 percent in the second quarter compared to the same period in 2017, reflecting declines in print subscribers.

Total advertising revenues were $107 million, down 14.6 percent in

the second quarter of 2018 compared to the second quarter of 2017. The rate of decline in total advertising revenues in the second quarter reflects a sequential improvement from the first quarter of 2018 of 2.1 percent due to the improvements

“In the 2018 second quarter, newspaper-industry headwinds continued but nonetheless our digital transformation progressed despite these industry challenges,” said CEO Craig Forman in the July 27 earnings release.

“We saw many areas of sequential improvement: our total digital advertising revenues were up almost 8%, while our digital-only advertising revenues grew more than 20%. In the first quarter of 2018 we achieved a milestone in our digital transformation that was repeated in the second quarter: total digital advertising revenues exceeded our print newspaper advertising revenues and that trend accelerated in the quarter just ended. Indeed, in May and June we met another milestone: our digital-only advertising revenues exceeded our print newspaper advertising revenues. Finally, while print advertising was down double digits, even in this hard-hit category, we saw improvement in the trend of our print advertising business in almost all categories.”

Forman continued, “We are gratified to have completed the refinancing of the vast majority of our debt earlier this month, which provides us more runway for our digital transformation,” he said.


Headquartered in Chicago, tronc operates newsrooms in ten markets with titles including the Chicago Tribune, New York Daily News and The Baltimore Sun.

Digital-only subscribers increased 89 percent to 212,000 at the end of the second quarter 2018, up from 112,000 at the end of the second quarter 2017.

Second quarter 2018 total advertising revenue and digital advertising revenue were $111.8 million and $24.0 million, respectively, which includes the impact from a agreement. Excluding this impact, on a year-over-year basis, total advertising revenue would have been down 3.9 percent, and digital advertising revenue and would have been up 1.9 percent.

“The company accomplished a great deal during the second quarter 2018, all of which provides a solid foundation to drive future growth. After closing the California transaction (the sale of the Los Angeles Times and San Diego Union-Tribune), we now have one of the strongest balance sheets in the industry,” said tronc Chairman and CEO Justin Dearborn in the Aug. 9 earnings release. “Moreover, during the quarter we added The Virginian-Pilot Media Companies to our portfolio and we saw ongoing advancement in our digital subscription business as well as overall strong representation of consumer-related revenue versus advertising revenue.”

Lee Enterprises

Lee Enterprises, in 49 markets, saw digital advertising revenue increase 4.7 percent, to represent 33.7 percent of total advertising revenue for its third fiscal quarter, ending June 24, CEO Kevin Mowbray said in the Aug. 3 earnings release.

Monthly visits to Lee mobile, tablet, desktop and app sites averaged 73.7 million, an increase of 14.7 percent over the prior year quarter, which fuels digital advertising revenue.

Advertising and marketing services revenue combined decreased 9.5 percent to $73.5 million. Total digital revenue, including digital advertising and digital services, was $28.6 million for the quarter, up 5.5 percent compared with a year ago and up 4.9 percent on a same property basis.

Subscription revenue increased 1.6 percent in the current year quarter and decreased 0.8 percent on a same property basis. Average daily newspaper circulation, including TNI and MNI and digital subscribers, totaled 0.7 million in the 13 weeks ended June 24, 2018. Price increases and additional revenue from premium content partially offset revenue lost from lower print circulation volumes.

“Revenue trends were driven by strong performance from local advertisers — including digital, a 14.4% increase in programmatic advertising, subscription revenue growth and revenue gains from,” said Mowbray.

New York Times Company

The New York Times Company reported that subscription revenues increased 4.2 percent, while advertising revenues decreased 9.9 percent and other revenues increased 40 percent.

Second-quarter digital advertising revenue decreased 7.5 percent, while print advertising revenue decreased 11.5 percent. Digital advertising revenue was $51 million, or 42.8 percent of total company advertising revenues, compared with $55.2 million, or 41.7 percent, in the second quarter of 2017. The decrease in digital advertising revenue reflected a smaller audience as well as a decline in creative service revenues.

“In the second quarter, we saw increases in revenue and overall profitability and continued growth in our digital subscription business,” said CEO Mark Thompson in the Aug. 8 earnings release. “We added 109,000 net new digital-only subscriptions, of which

68,000 were to our core news bundle. At the end of Q2, we had 3.8 million total subscriptions, 2.9 million of which were digital-only. Our subscribers who came to us around the 2016 election and post-election periods continue to retain better than previous cohorts.

“Subscription revenues accounted for nearly two-thirds of the company’s revenues, a trend we expect to continue. We continue to believe that there is significant runway to expand that base substantially.

“Turning to advertising, this was a subdued quarter for digital advertising as we predicted, but we remain confident that we will return to strong year-over-year growth in the third quarter,” he said.

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