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Weekly UpdatesThe first quarter of 2009 was the worst in the history of newspapers, according to the yarn spun on Reflections of a Newsasaur, a great blog about newspapers, business and the business of newspapers. Arkansas' newspapers were no exception.
Nationwide, newspaper advertising revenue dropped 28.3 percent in the first three months of 2009, or $2.6 billion, according to Alan Mutter, who writes the blog. "Outtakes" is sure profits would be even more dismal. Mutter used Newspaper Association of America stats for the nation's daily and Sunday newspapers.
In Arkansas, newspapers felt the same pains, Tom Latimer, the Arkansas Press Association's executive director, said. Arkansas' papers experienced advertising revenue declines of between 30 and 40 percent for the three months ending May 30, Larimer said. Larimer warned about assuming the decline is solely a newspaper thing.
"Even at 25 percent down, if you look at any other business category, they are going to be in the same boat," Larimer said. "In just about any other small business--and newspapers are small businesses--you are going to be down this year because of the economy."
Well, thanks to the myriad statistics available online (and an assist from the UA's super economist Kathy Deck), we can test Larimer's hypothesis that newspaper declines mirror other industries. Sadly, the comparisons are not apples to apples, but corporate profits fell about 18 percent in first quarter 2009 when compared with 2008, according to the U.S. Bureau of Economic Analysis. The financial industry has seen profits slide about 40 percent year over year.
With revenue and profits down, many would-be advertisers are holding onto their money, just in case.
"There are lots of sectors of the economy that are under great stress as revenues decline," said Randy Zook, president of the Arkansas State Chamber of Commerce. "People, rather than spending, are holding onto their cash, and that's true for about every sector of the economy."
And the advertising category that has traditionally been many papers' best--automotive--is hurting, Larimer said.
"As a category, automotive has been a really strong advertiser for newspapers, and that has really backed off in the current situation," he said. "It's not that [advertisers] don't have money; it's that they don't want to spend it."
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