The parent company of Dallas’ Only Daily Newspaper lost $17.3 million in the third quarter, and had to borrow $10 million to pay for the costs associated with laying off 400 employees this fall. And that was probably the best news in Friday’s earnings announcement.
Because, frankly, things look like they’re going to get a lot worse before they get better. Some are even wondering about Belo’s ability to continue to operate its three large daily newspapers, the Denton paper, and its ancillary products like the weekly Quick and the almost daily Briefing.
How bad was it?
• This was the third consecutive quarter that the company lost money.
• Revenue was down 15 percent from the same period last year, which wasn’t all that great and didn’t include a presidential election. How much worse would that number have been this year if not for campaign ads?
• Ad revenue fell 22 percent from the same period last year, and internet revenue was off 19 percent. So much for the cyber-ether saving the company.
So what happens next? Belo said last week that it was going to sell real estate in Dallas and Providence, R.I., eliminate its dividend, freeze salaries, and find other ways to raise revenue and cut costs. Good luck. Selling assets in this market will be difficult, and I think we can also assume that any plans to take the company private are on hold, if only because the credit markets are so tight.
My best guess? Look for another round of layoffs in the spring if the numbers don’t get better. Also, if there isn’t improvement by then, look for the parent company to raise subscription rates and consider dropping its non-core products (Neighbors, Quick and Briefing in Dallas) and re-examine its commitment locally to Al Dia. I also wouldn’t be surprised to see it drop the print versions of these, and go on-line only.
And, for what it’s worth, Belo’s stock price rallied on Friday after the announcement, up about 20 percent. Apparently, Wall Street had expected worse.