In a holiday gift to the newspaper publishers, analyst John Janedis told investors that the stocks were hot because the ad market for papers seems to be “improving more quickly than we previously anticipated,” Reuters reported. This is great news for the Times Co. and Gannett, which publishes USA Today, but is it true?
The problem, says Reuters media reporter Robert MacMillan, is that publishers like the Times Co. and Gannett have managed to improve their bottom line more with cost-cutting than increased ad revenues. They still struggle to make money from a dying print product while not really being able to capitalize on their online market. “The newspaper stock recovery, as a result, is one that will benefit investors in the short term and does not necessarily indicate confidence in publishers’ long-term futures,” MacMillan concluded.
So now here’s something newspaper publishers can request for Christmas: a plan that will save them in the long term.
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