Newspaper shares down 20 per cent

The shares of publicly held publishing stocks in the last two years lost nearly $13.5 billion in value, or 20.5% of their market capitalization.

That’s the report from the blog of Alan D. Mutter, former city editor of the Chicago Sun-Times (1984) who became the N\o. 2 editor of the San Francisco Chronicle before he left the business in 1988.

The drop came at the same time the Dow Jones industrial average soared to an all-time high and other market indicators gained by healthy double-digit percentages.

Of the 12 publicly held newspaper stocks traded in 2004 that remain with us today, only the shares of Scripps have advanced. Scripps’ 5.4% gain contrasts with the 15.6% advance in the Dow industrials in the same period.

Scripps shares are going in a different direction from the rest of the newspaper industry, because the company has been moving aggressively to build its cable TV, broadcasting and online holdings. With only about a third of Scripps revenues coming from the newspaper business, it probably shouldn’t even count as a publishing company any more.

Although the shares of Dow Jones, Gannett and Tribune gained in 2006, those companies and the rest of the industry have been in negative territory since 2004. The biggest loser, in the last two years, by far, was Journal Register Co., whose shares plunged 61.8%. The Washington Post Co. suffered the smallest decline at –1.9%.

Institutional investors for the last two years have pressured newspaper companies – including Dow Jones, Knight Ridder, the New York Times and Tribune – to put themselves up for sale in hopes of realizing greater value than the stock market accorded their shares.

Click on the headline to go to Mutter’s blog.