January 10, 2006

Get Ready for the 2006 Newsroom Blues

Merrill Lynch is forecasting that newspaper revenue in the coming year may not even match last year's. If that proves true, the boardroom hammer will fall once again on the newsroom. More than 2,000 newspaper jobs (not all editorial) were cut in 2005. Expect more in 2006. Merrill Lynch says (via E&P):

"We keep coming back to the same conclusion that newspaper ad revenue growth in 2006 is likely to trail even the paltry estimated 2.4% in 2005."

Advertising slumps are expected to continue in classified (natch), real estate and autos.

The same E&P story looks at potential buyers of Knight Ridder, Gannett among them. Should Gannett buy KR's 32 daily newspapers, those newsrooms should also prepare for more cuts because Gannett pre-tax profits "are estimated at 29% compared with Knight Ridder's 20%." With revenue flat, there's only one way to raise margins -- cut spending.

Posted by Tim Porter at January 10, 2006 07:51 AM