The nation’s third largest newspaper chain, the Sacramento-based McClatchy Company, today reported that both its fourth quarter and full year financial results moved into the red in 2012.
But the company said it’s encouraged by the increasing sales of digital advertising and initial results from the rollout of a digital subscription program.
The company, parent of The News Tribune, the Olympian, the Bellingham Herald and the Tri-City Herald in Washington, said it lost $30 million or 35 cents a share in the fourth quarter and $100,000 for all of 2012. The company owns 30 daily newspapers in 29 markets nationwide including the Miami Herald, the Kansas City Star, the Charlotte Observer and the Sacramento Bee.
In the fourth quarter of 2011, the company’s net income was $42 million or 49 cents a share. Net income for fiscal 2011 was $54.4 million or 63 cents per share.
The company results were negatively affected by a $60 million after-tax loss from refinancing a major portion of its debt. That refinancing reduced the interest rate on that debt and extended the maturity date by five years.
Softer Christmas retail sales also affected the company’s expected advertising revenues, said McClatchy Chief Executive Officer Pat Talamantes.
On the positive side, the chain’s digital-only advertising revenues were up nearly 15 percent in the fourth quarter, and the proportion of advertising revenues coming from non-traditional sources reached 36 percent last year.
McClatchy said the company’s combination paper and digital subscription plan initiated last is showing positive results. McClatchy said it expects that program may generate $20 million in additional revenues in 2013.
“The early results are promising: a vast majority of renewing subscribers have accepted the program, telling us our print readers value our content and high-quality journalism and are willing to pay for it in a digital format, ” said Talamantes in a prepared statement. “Similarly, we have added thousands of new digital-only subscribers to our paying customer base. In total, the Plus Program contributed $1.2 million in incremental revenues in 2012 which is impressive considering that most of our newspapers launched the program in the fourth quarter.”