{"id":976,"date":"2007-07-20T09:34:35","date_gmt":"2007-07-20T16:34:35","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/2007\/07\/20\/976\/"},"modified":"2007-07-20T09:38:00","modified_gmt":"2007-07-20T16:38:00","slug":"newspaper-earnings-sink-with-housing-market","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2007\/07\/20\/newspaper-earnings-sink-with-housing-market\/","title":{"rendered":"Newspaper Earnings Sink with Housing Market"},"content":{"rendered":"

Some of you may recall the Rhodes \/ Gardner real estate Q & A<\/a> a few months ago in which the following question was asked by a Seattle Bubble reader<\/a>:<\/p>\n

\n

I can’t help but notice that the Times’ take on local real-estate prices is often excessively optimistic. For example, during the last NWMLS report, we saw double-digit gains in inventory in many parts of King County (nearly 100% in some places!), but the Times’ article largely ignored these facts to focus on (slowing) gains in price. This is just one example; I can think of many others.<\/p>\n

My question is this: how much money does the Times derive from real-estate advertising, and why should it be trusted as an unbiased source of information in the face of this rather blatant conflict of interest?<\/p>\n

Will the Times’ take a pledge to disclose these conflicts of interest in future articles about real-estate?<\/p>\n<\/blockquote>\n

Rhodes’ response:<\/p>\n

\n

As for how much money The Times derives from real-estate advertising, I can’t tell you because I don’t know. The advertising and news departments are totally separate – so much so that they’re even in different buildings. There is no conflict of interest because the ad department doesn’t influence our stories. That would be a violation of our ethics policy and basic good journalism – things we take very seriously.<\/p>\n<\/blockquote>\n

Uh-huh… right. Well, maybe Ms. Rhodes is truly completely ignorant regarding the extent to which real estate advertising is keeping the S.S. Times afloat. However, as anyone who is paying even a little bit<\/em> of attention can deduce, real estate advertising is a huge portion of most newspapers’ revenue.<\/p>\n

Unfortunately for the Times and other papers, despite the best efforts of the “unbiased” real estate “reporters,” those advertising dollars are beginning to dry up<\/a>…<\/p>\n

\n

Earnings: Newspapers see big declines in advertising<\/span><\/p>\n

Publishers blame real estate slump<\/em><\/p>\n

Newspaper publishers reported sharply lower advertising revenue for the second quarter Thursday, and two of them laid part of the blame on a drop-off in real estate advertising in key markets.<\/p>\n

McClatchy Co. and Media General Inc. both reported steep advertising declines and lower profits…<\/p>\n

…<\/p>\n

McClatchy, which owns The Miami Herald and several newspapers in California, including The Sacramento Bee and The Fresno Bee, had a 9.8 percent decline in advertising revenue across its 31 newspapers, with the biggest drops coming in Florida and California.<\/p>\n

McClatchy is the country’s third-largest newspaper company, behind Gannett Co. and Tribune Co. McClatchy owns a 49.5 percent stake in The Seattle Times Co.<\/p>\n

McClatchy attributed much of the weakness in those markets to economic factors including the slowdown in the formerly hot housing sector. With real estate playing a key part of the local economies, other ad categories such as automobiles and employment also sagged, McClatchy Chief Executive Gary Pruitt said.<\/p>\n

There are some doubts about how much real estate advertising would come back to newspapers even after the housing market recovers, given that classified advertising for jobs, cars and real estate \u2014 a very profitable business for newspapers \u2014 is increasingly migrating to the Internet.<\/p>\n<\/blockquote>\n

Expect the real estate cheerleading to kick up a notch. “Best selection in years! Now is a great time to buy!” “Check out these sad people that didn’t buy and now they’re priced out forever! Don’t let this happen to you, buy now!” “Sales declining, but from record highs, so they’re still really high!”<\/p>\n

(Seth Sutel, Associated Press<\/a>, 07.19.2007<\/em>)<\/p>\n","protected":false},"excerpt":{"rendered":"

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