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The McClatchy Company Message Board

  • newspaper_advertising newspaper_advertising Aug 10, 2013 11:43 AM Flag

    Operating income lower than interest expense every friggin quarter

    We can thank the great one, Gary Pruitt for loading this company up with so much debt that bankruptcy is unavoidable. As ad revenues continue to drop, and pension liability and expenses continue to rise, the downward spiral will continue.

    When the NY Times dumped the Globe last week, the buyer did not take on the pension obligation. Think about that, the Times will have to continue paying pensions in Boston while at the same time they walked away from any revenue streams possible there. They were bleeding red ink, and Henry will have a very hard time making money in print unless he slashes and burns payroll to ridiculous levels. Some people have more money than brains, but good for him to step up.

    The Graham family,finally decided it was time to sell one of the most prestigious titles in newspaper history. Warren Buffett owns some stock in the company, has recorded a 15 bagger here, and he walked away? He'll, Buffett has been buying papers in the past two years, but even he must realize print is doomed to failure.

    MNI will never be able to sell any papers for anything close to historical valuations, and this company has proven they can keep plates spinning, but the revenue stream is never, ever going to pick up at the pace to have operating income higher than interest expense.

    I truly believe the death spiral will pick up speed going forward. We are three years out of the recession, and revenues are still sliding?

    Sell everything, short if you can, this one is Doomed.

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    • this writer is a bright man but wrong. ad revenues will soon stop falling. every time mni pays down its debt, its interest expense drops, so profits will rise. simple as that; need not strike oil or invent the lightbulb, just pay down the debt every year and profits will rise. and when profits rise, wall street, also bright but wrong, will increase the p/e and the stock price will rise.
      i only have 13,000 shares........but they will be worth more in a year and then more the next year....

 
MNI
4.56+0.06(+1.33%)Aug 19 4:05 PMEDT

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