Wind behind transformation: U.S. publishers’ EBITDA at half of peak

The Earl Blog | 15 December 2011

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EBITDA margins of U.S. publicly trade newsmedia companies

When I looked at the hand-written, crumpled piece of paper, and compared it with the historic data I had on file, I did a double-take: profitability of U.S. newspaper companies has dropped to about half of its peak from 12 years ago!

Analyst John Morton faxed the data to me this week, he the rare and meticulous keeper of such industry data. This was the final piece to my authorship of the INMA Newsmedia Outlook report that looks at culture change and the path to a multi-media growth story. You can see the chart of EBITDA margins of U.S. publicly traded newsmedia companies on this page.

When you realise that the 2008-2011 numbers were achieved on the backs of massive cutbacks, you see in numbers what it takes a lot of words to describe outside the United States.

Publisher profit margins compared with other industries remain high at just under 15%. U.S. EBITDA performance vs. peers worldwide remains high (normal would be 10%-15%). Gannett reported recently that all but one of its 80+ dailies are profitable.

Yet the shareholder promise of these publishing assets was they would be high margin today and higher margin tomorrow. Clearly, U.S. publishers have sacrificed this promise by now.

The sharp reduction and the immense pressure these margins are under explains the transformational age of the U.S. newsmedia industry.

“Newsmedia Outlook 2012: Culture Change and the Multi-Media Growth Path” was released today: 98 pages, 25,000 words, and based on hundreds of interviews in my travels during the past year. This EBITDA chart was one of many nuggets.

To get your copy of Newsmedia Outlook 2012: