12 Major Media Likely to Close in 2009

From 247 Wall Street -- this is an excerpt. To read the entire article, click here.

Twelve Major Media Brands Likely To Close In 2009

No one working in the media industry will ever have seen a year as bad as 2009 will be. The sharp slide in advertising began in 2008, and, based on the worsening economy, there is no reason to think that advertising will improve.

Most Wall St. analysts have predicted a harsh year for the ad business. If the downturn deepens and unemployment rises above 10% most predictions about media, no matter how negative, will have been unexpectedly optimistic.

The most endangered of the media sectors is the newspaper industry. The Seattle Post-Intelligencer and Denver's Rocky Mountain News have already been slated for closing if they do not find buyers. They won't. The Miami Herald is on the block. Due to the remarkably poor real estate environment in South Florida, this property is unlikely to find a new home.

National newspaper chains Journal Register and Gatehouse have been delisted from the NYSE and are likely to try to auction off their operations. McClatchy (MNI), the third largest chain in the country, will struggle to make its debt service.

Scores of papers, large and small, will fold this year. Newspaper expert Alan Mutter recently wrote that any paper in a major city with two dailies is in tremendous trouble.

The magazine industry is not in much better shape although its very sharp downturn did not begin until last year. Conde Nast recently closed Men's Vogue and cut back the frequency and online operations of Portfolio. Media giant Meredith recently closed Country Home.

Two months ago, PC Magazine said it would close its print edition and operate only online. According to MIN, at least a dozen major magazines had ad page decreases of more than 20% last year including US News & World Report, Rolling Stone, Boating, Gourmet, Ladies Home Journal, More, and Smart Money.

A number of these magazines also had sharp page drops in their January editions. With advertising expenditures likely to fall throughout the year, it is hard to imagine how many men's magazines, car publications, food, and shelter magazines will be able to stay afloat in segments of the industry which are already crowded.

A year ago, most analysts expected that the online marketing business would be largely recession-proof. It is now clear that this is not true.