Know the Score on Media
The E.W. Scripps Company (SSP) is scheduled to report its first-quarter 2012 results before the market open on Tuesday. While not a brand name that all would recognize, this media company operates daily and community newspapers in 13 markets, and 19 broadcast TV stations as well as Scripps Howard News Service and United Media, the worldwide syndication home of well-known cartoons including Dilbert and Marmaduke as well as 150 other features. However, the financial reality is that the company delivers the bulk of its operating revenue from its newspaper business. According to the company's recently filed 10-K, newspaper revenues have generated more than 55% of Scripps revenue stream over the last few years.
And that is where the problem lies with SSP shares -- which is similar to those of Gannet (GCI), The New York Times (NYT), The Washington Post (WPO) and others. The domestic newspaper industry built during the 20th century relied on the combination of circulation and advertising revenues. Given the transition over the last few years from print media toward digital media -- which the rise of smartphones and tablets has greatly accelerated in the last few years -- those revenue streams have come under pressure. The resulting economic destruction has resulted in the collapse of print newspaper ads by nearly two-thirds from $60 billion in the late-1990s to $20 billion in 2011. ...444 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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