Is there a bit of hope for the newspaper industry? McClatchy, which owns 30 newspapers after it disastrously bought Knight Ridder in 2006, doubled its profit in the second quarter compared to last year – from $19.7 million to $42.2 million.
Although its ad revenue fell 30% from a year earlier, the WSJ points out that McClatchy is seeing an “improving ad trend.” The company has been reducing operating costs, mainly by eliminating one-third of its staff in the past year. But, it still has a crushing $2 billion debt acquired mostly from its purchase of the Knight Ridder newspaper chain. It is feared the heavy debt load could push McClatchy into bankruptcy protection.
The company’s battered shares, which have lost more than 90% of its value, today closed at $1.01.