Will Gatehouse Media newspapers fall along with its stock?
By MEGAN KOSKOVICH
(WKTV) - In these tough economic times, it's hard to find any industry that isn't feeling the pinch - that includes the ones that report on the country's financial woes.
Gatehouse Media owns three local papers - The Utica Observer-Dispatch, The Herkimer Telegram, and the Little Falls Evening Times.
Since the beginning of September, Gatehouse Media stock hasn't traded above a dollar a share. And Gatehouse recently reported a $430 million second quarter loss.
A topic that's been of interest on the internet - from financial websites to local blogs - Gatehouse Media's falling stock raises the question: Will its newspapers fall with it?
"Every newspaper is different and every community is different from the others," said Syracuse University Professor Bob Lloyd.
Lloyd says a parent company's financial troubles can affect a newspaper primarily in staff and newsprint, but newspapers can often find their own legs to stand on.
"In the smaller community there's not as many vehicles for you to advertise in," Lloyd said. "So, the papers have a tendency to do better than larger markets."
Publisher Beth Brewer says the Herkimer Telegram and Little Falls Evening Times are both doing well. The Observer-Dispatch's publisher - Donna Donovan - says the same for her paper.
"Our paper is very profitable and very successful financially," Donovan said. "The paper's been around for 180 years and there's no intention of going anywhere."
Gatehouse Media CEO Michael Reed says the reason behind the loss in revenue is a decline in classified ads - a problem that is plaguing many newspaper companies.
The internet has taken away a lot of classified advertisers, including "craigslist" which has left car dealerships - one of the largest advertisers in newspapers - hurting.
"Newspapers are now depending more on the internet for revenue," Lloyd said. "Newspapers are discovering that a lot of people love to get their news from the website and a lot love to still get it from the newspaper - so they're in a state of transition.
Lloyd says it's important to note that no mass medium has ever died - they adapt, evolve and grow with the changing times.