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Tribune reports revenue decline
[January 20, 2006]

Tribune reports revenue decline

(Chicago Tribune (KRT) Via Thomson Dialog NewsEdge) Jan. 20--Tribune Co. shares came under selling pressure Thursday, after the Chicago media concern reported a worse-than-expected decline in December revenues.

Combined revenues from Tribune's publishing, broadcasting and entertainment segments fell 6.1 percent in the five-week period ended Dec. 25, to $539 million, from the year-earlier period.

Revenues derived from advertising "were particularly disappointing," Goldman Sachs analyst Peter Appert observed in a note to investors.

"These were Tribune's softest numbers in at least two years," the analyst added, saying the December results "reflect a further deterioration in ad revenue momentum."

The U.S. newspaper industry has long been facing a gradual and apparently irreversible decline in readership. But the circulation decline has accelerated in recent years, in part because more Americans are opting to get their news from the Internet.

In addition, a growing number of people are using Web sites to find jobs, locate apartments and sell their cars--a trend that is squeezing classified-ad revenues at papers.

Television broadcasters are facing some of the same revenue pressures. Tribune television revenues fell 10 percent in the month. Technological advances such as TiVo allow viewers to skip past advertising. And high-speed Internet connections make it easier for people to forsake TV in favor of Web-based activities.

What's more, advertisers who once placed only print and broadcast advertising now have a third, fast-growing platform with attractive demographics: Internet ads.

The effects of those industry dynamics were evident in the latest report from Tribune, which owns 26 TV stations and 11 daily newspapers, including the Chicago Tribune.

At the publishing group, advertising dropped 4.5 percent, to $333.2 million. Circulation-based revenues fell 3.5 percent, to $56.4 million. Retail advertising, the publishing group's biggest segment, slid 5.2 percent, to $166.2 million.

The downturn was particularly prominent at Tribune's Los Angeles Times, where "full-run" ad volume tumbled 14 percent, to $266 million.

On the broadcast and entertainment side, revenues tumbled 12 percent, to $126 million. TV revenues dropped 10 percent, to $119.9 million.

Tribune said a small fraction of the decline could be attributable to the timing of the Christmas holiday and the aftermath of hurricane damage in southern Florida.

Tribune is scheduled to report fourth-quarter earnings on Feb. 1.

Tribune shares fell 99 cents, or 3.1 percent, to $30.82, on the New York Stock Exchange.

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