The theme at newspaper publisher McClatchy Co. has been pretty much the same for the past five years: With revenue steadily falling quarter after quarter, McClatchy CEO Gary Pruitt has been laying off workers and trimming other expenses to keep the business profitable and ensure the company has enough money to repay the debt it took on five years ago when it bought another newspaper publisher, Knight Ridder.
That has left people wondering how much more McClatchy can afford to cut and whether management sees any sign of hope on the horizon. An analyst sought insights from Pruitt during a Thursday conference call held to discuss a 32 percent decline in the company's second-quarter earnings.
QUESTION: You guys have done a Herculean job on costs here in the last five years. What inning do you guys think you are in right now in terms of cost cuts? And how much more do you really think is left to cut here and be able to still prudently run your operations?
ANSWER: It feels like the 19th inning, but we are not sure. We ... are not giving a revenue projection, or even an expense projection beyond the third quarter. I do think the business model will stabilize. I think digital (advertising) will continue to grow and, obviously, there is a structural change in the media landscape and share. Those are very turbulent times. But I do think that we are seeing more stability in the audience share and I think that will eventually translate into greater stability in the advertising share. So, I am hopeful we are much closer to the end than to the beginning. But I can't give you a read more than that.
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