This article, published in early November 2005, focuses on the fiscal woes of the large media companies.  Even though many of them were not hemorrhaging money, their stocks had been seriously underperforming: since August, most stock prices were down between 6 to 17 percent at a time when the major indexes had lost only a handful of percentage points.  The main argument is that even though the major media companies (including the conglomerates such as Viacom and the more focused newspaper companies such as Knight Ridder) had been shaking up and revitalizing their business models to prove that they were ready to capture new markets in the evolving economy, many institutional investors were not warning up to their actions and plans.  Indeed, you could even say that there are some corporate civil wars going on in board rooms.  The article specifically mentions that a large shareholder of Knight Ridder wants the company to put itself up for sale, and it makes a reference to Carl Icahn’s efforts to get Time Warner to divest itself of some of its assets to begin a large stock buyback program (since the publication of this article, Carl Icahn has become even more confrontation when dealing with Time Warner’s current board of directors and management).  The writer does not mean to say that all media companies are having trouble, for Google and Apple have been steadily increasing for quite some time (the continue to do so).  Rather investors are not feeling the least bit sanguine when it comes to traditional ‘big’ media companies.  Perhaps they are all just dinosaurs waiting to be extinct.

Here are two interesting and important quotes from the article:

”Beyond those concerns, they worry that with slower advertising growth, the profitability of media properties like television and radio stations could be affected. And even if the ad market were to become robust again, just how many of those dollars might flow to the Internet and away from traditional media is an open question.”

And

''There is a buyers' strike,'' said Dennis Leibowitz, general partner at Act II Partners, a media hedge fund. ''People are afraid to touch the old media. No matter how cheap they have gotten, people are fleeing. The environment is scaring them, and they can't figure it out.''

This article is very informative on the workings of the newspaper industry.  It mentions that what distinguishes Knight Ridder from other newspaper companies is that the founding family does not retain control through supervoting stock, as is the case at companies such as The New York Times, Belo, and McClatchy.  According to the article, many Wall Street analysts believe that print newspapers are slowly dying, under relentless pressure from new media companies such as Google, which offer advertisers more efficient and cost effective ways of reaching their target audiences.  The article also alludes to the pressures that Wall Street puts on newspapers to cut costs; for some editors within the position, this has been anathema to them, for they argue that news content will surely suffer if given fewer resources.  This is the standard problem for publicly traded media companies: those in charge of business operations want to maximize profit, whereas those in charge of editorial content want to great the best product possible.

This is an article about a very successful private wealth manager (his company controls over $30 billion in assets) who is quite confident that Newspapers will do well.  He has large stakes in many of the companies (Gannett, Knight Ridder, NYTimes Company), valuing multiple billions of dollars.  This article explains why he is confident that they will survive the new challenge coming from the internet (and other media), and the financial returns that he hopes to realize.  Although not the focus of this article, many journalists have been quick to point out that newspapers play an important social role--especially on the local level--and they have such prestige that it will be difficult for them to be replaced.  Indeed, names such as The New York Times, Washington Post, and The Wall Street Journal are some of the strongest, most reputable brands in the nation.

This is a good overview of the financial/shareholder pressures facing contemporary newspaper companies and the ways in which they react to such forces.  It also notes that papers owned by families (with the original owners retaining control through holding a majority of the voting stock) tend to be both more successful and better papers.  Perhaps, then, quality is a smart investment.

This article goes over the financial basics of Knight Ridder’s putting itself up for sale, as well as the implications of its doing so.  Moreover, it talks about the reasons why a private equity firm or another company might decide to make an offer.  The article also discusses the spin off of Warner Music very briefly at the end, and how even though that troubled section of Time Warner seemed to have been in the doldrums, it has provided a nice return for its investors who bought it.

This article gives more information on the impending Knight Ridder auction (sale) and what that might portend for the newspaper industry as a whole.  According to the article, “the newspaper industry is on the defensive, with circulation stagnant, advertising dollars migrating to the Internet and newsrooms reducing their work forces to save costs,” and thus seeing what desire there is to purchase the nation’s second largest newspaper company in terms of circulation could give a good idea of how Wall Street and investors are feeling about this medium.  The article also points out that even with all these problems, in terms of net margins, newspapers are one of the most profitable industries in the entire economy.  Why, then, all the worry?  Simply because they are seen as having reached their summit and that they are now on their way out, even if they are impressively profitable today.  There has been a decline in their revenues and profits, and thus many regard them as “on their way out.”  That is, few investors want to put their money into an industry that will eventually wither away, even if it is currently performing well.