The McClatchy Company (MNI) is the third largest newspaper company in the U.S. based on daily circulation . The company runs 31 daily newspapers and approximately 50 non-dailies across 29 markets nationwide . In June of 2006, McClatchy acquired Knight-Ridder, Inc., the second largest newspaper publisher in the U.S. McClatchy's primary daily newspapers include The Miami Herald, The Sacramento Bee, the (Fort Worth) Star Telegram, The Kansas City Star, the Charlotte Observer, and The (Raleigh) News & Observer. In 2006, the company had an average paid daily circulation of 2,842,452 and Sunday circulation of 3,523,177 .
Throughout the last decade, internet advertising has continued to steal advertising dollars from traditional advertising. Newspaper publishers like MNI have been particularly affected, as advertisers have chosen to take advantage of the cheaper prices and greater measurability offered by online advertising. In an effort to offset its declining print advertising revenues, McClatchy has acquired various online assets including Real Cities, the nation’s largest advertising network of local news websites; and 15% of CareerBuilder LLC, the country’s largest online job site. The company also owns 25% of Classified Ventures LLC, a newspaper industry partnership offering classified websites like cars.com and apartments.com. Online advertising has become one of the fastest growing sources of revenue for the company, (increasing by 291% in 2006 from $35 million to $102 million), but was still only 6.1% of total revenues in 2006.
Total operating revenue in 2006 was 1.68 billion dollars. 86% of this came from advertising revenues and 12% came from circulation revenues. Online advertising revenue in 2006 amounted to some 102 million dollars.
Although MNI's revenue grew substantially from 2002-2006, its net income margin fell over the same period. This large drop in 2006 can be explained in part by the sale of 12 of the 32 daily newspapers it acquired through the Knight-Ridder, Inc. acquisition, in addition to the (Minneapolis) Star Tribune, its largest paper. The loss of income from these discontinued operations along with interest on debt related to the purchase of the newspapers, and the write-down of Star Tribune's net assets to market value account for the gap between revenue and net income in 2006. Even after controlling for acquisitions and divestitures, MNI's margins have suffered due to falling circulation and ad revenue.
From 2003 to 2005 McClatchy's total circulation fell by more than two percent. The jump in 2006 can be attributed to McClatchy’s acquisition of Knight-Ridder, Inc.
|Company||Advertising Revenue ($billions)||Daily Circulation (millions)|
|New York Times Company||2.1||2.3|