Fitch Ratings: 'Several cities' could have no daily paper as soon as 2010

[2muchcoffeeman]

Given that we've speculated on this possibility before, it's not that surprising. But to actually see it in print snaps it into focus.

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003918781

By Mark Fitzgerald
Published: December 03, 2008 10:55 AM ET

CHICAGO Newspaper and newspaper groups are likely to default on their debt and go out of business next year -- leaving "several cities" with no daily newspaper at all, Fitch Ratings says in a report on media released Wednesday.

"Fitch believes more newspapers and newspaper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010," the Chicago-based credit ratings firm said in a report on the outlook for U.S. media and entertainment. . . .

Fitch rates the debt of two newspaper companies, The McClatchy Co. and Tribune Co. as junk, with serious possibilities of default. It also assigns a negative outlook to both the companies and the newspaper sector, meaning their credit ratings are likely to deteriorate further. . . .

Fitch says the advertising downturn that began this year is unique in that it affects not only national advertisers, but local ones as well. And unlike the easy credit and lower interest rates during the 2001 ad recession, this time advertisers and consumers face a credit freeze.

More advertising categories are under pressure this time around, as well, Fitch argues. Five of the top 10 ad categories, accounting for more than 40% of ad spend will be down, Fitch predicts: retail; automotive; financial services; general services; and airlines, hotels and car rentals.

 

[DCguy]

Well, that's just wonderful, isn't it?

 

[WaylonJennings]

So if that happens does someone start over and do it the right, fiscally responsible way?

 

[Mizzougrad96]

I think people are going to be very surprised how this will happen in the bigger cities before it happens at smaller papers.

 

[Mizzougrad96]

So if that happens does someone start over and do it the right, fiscally responsible way?

Sure... If you're looking for a huge tax write-off.

 

[WaylonJennings]

So if that happens does someone start over and do it the right, fiscally responsible way?

Sure... If you're looking for a huge tax write-off.

I mean start from the ground up. On the cheap. I mean, someone is going to think they can step in and fill the void, right?

 

[VJ]

I think certain markets will be protected to a certain degree (NYC, DC, Chicago), but it's the cities on notch below that are going to be the hardest I think like Detroit and Cleveland.

 

[Ace]

I think certain markets will be protected to a certain degree (NYC, DC, Chicago), but it's the cities on notch below that are going to be the hardest I think like Detroit and Cleveland.

Cleveland is a notch above.

 

[Mizzougrad96]

So if that happens does someone start over and do it the right, fiscally responsible way?

Sure... If you're looking for a huge tax write-off.

I mean start from the ground up. On the cheap. I mean, someone is going to think they can step in and fill the void, right?

Uhh... Not unless they're incredibly rich and incredibly stupid.

 

[WaylonJennings]

So if that happens does someone start over and do it the right, fiscally responsible way?

Sure... If you're looking for a huge tax write-off.

I mean start from the ground up. On the cheap. I mean, someone is going to think they can step in and fill the void, right?

Uhh... Not unless they're incredibly rich and incredibly stupid.

See, I think someone would be.

 

[Bubbler]

This is where journalism becomes web-only and the idea that you can make a career out of journalism ceases to exist.

 

[Bob Cook]

This is where journalism becomes web-only and the idea that you can make a career out of journalism ceases to exist.

I agree with the former, but not necessarily with the latter. Yes, the idea that you can step out of j-school and work for a large organization ceases to exist. The idea that you could become an entrepreneur, making you own news site focused on a particular topic or locality, is out in force. There is going to be a demand for news and information that will need to be filled. The question is how, and how the economic model would work, enough so that someone could make a living (though given what a lot of smaller papers pay, the economics might not be as hard to match as you might think). The transition is wrenching, and I don't mean to minimize its impact. But something will replace it. It's just not going to look like what we know today.

 

[DCguy]

Here's a question to throw out to the seasoned vets: Are there any papers that can survive this downturn and continue business without making major cuts in the future? Or is every paper doomed?

 

[Ace]

So if that happens does someone start over and do it the right, fiscally responsible way?

Sure... If you're looking for a huge tax write-off.

I mean start from the ground up. On the cheap. I mean, someone is going to think they can step in and fill the void, right?

Uhh... Not unless they're incredibly rich and incredibly stupid.

Other than Sam Zell you mean.

 

[NightHawk112005]

This is where journalism becomes web-only and the idea that you can make a career out of journalism ceases to exist.

I agree with the former, but not necessarily with the latter. Yes, the idea that you can step out of j-school and work for a large organization ceases to exist. The idea that you could become an entrepreneur, making you own news site focused on a particular topic or locality, is out in force. There is going to be a demand for news and information that will need to be filled. The question is how, and how the economic model would work, enough so that someone could make a living (though given what a lot of smaller papers pay, the economics might not be as hard to match as you might think). The transition is wrenching, and I don't mean to minimize its impact. But something will replace it. It's just not going to look like what we know today.

I agree, we might be headed to online-only journalism, but that doesn't mean journalism as a career is doomed. It'll just be different.

 

[SF_Express]

This is where journalism becomes web-only and the idea that you can make a career out of journalism ceases to exist.

I agree with the former, but not necessarily with the latter. Yes, the idea that you can step out of j-school and work for a large organization ceases to exist. The idea that you could become an entrepreneur, making you own news site focused on a particular topic or locality, is out in force. There is going to be a demand for news and information that will need to be filled. The question is how, and how the economic model would work, enough so that someone could make a living (though given what a lot of smaller papers pay, the economics might not be as hard to match as you might think). The transition is wrenching, and I don't mean to minimize its impact. But something will replace it. It's just not going to look like what we know today.

I agree, we might be headed to online-only journalism, but that doesn't mean journalism as a career is doomed. It'll just be different.

What they said.

 

[Joe Williams]

I have no problem dedicating myself to, and encouraging young people to pursue, careers in journalism.

It's finding the jobs that can support you that is the hard part.

 

[Fredrick]

This is where journalism becomes web-only and the idea that you can make a career out of journalism ceases to exist.

Exactly. This is true, no doubt about it. It'll be all freelance on the Internet sites with a few web producers and maybe a copy editor or two, probably no copy editors like the sites at Rivals.com. If you think you can make a career in "journalism" as a part timer, OK. But journalism is done as a career.

 

[Ace]

Who needs copy editors! We have spelcheck?

 

[Fredrick]

The journalism schools have to be considering closing. Nobody needs to be trained to be a part timer. The newspaper websites and their couple of leftover editors will do the teaching.