McClatchy reported a widening third-quarter loss Thursday amid a continuing decline in advertising revenue, continuing a decade-long trend.
Sacramento-based McClatchy, publisher of The Sacramento Bee , said it lost $9.8 million during the quarter, compared to a loss of $1.1 million a year earlier. Excluding certain one-time charges, such as severance expenses, the company reported an “adjusted net loss” of $2.1 million, compared to a profit of $3.2 million last year.
McClatchy also disclosed that it is “discussing sale terms under nonbinding letters of intent” with potential purchasers of The Bee’s main office and production building in midtown Sacramento.
The company previously announced it would try to sell the property, which also serves as McClatchy’s headquarters, and lease space back from the buyer. McClatchy has been selling other properties around the country to reduce debt, and has a pending deal to sell The Bee’s parking garage to developer Sotiris Kolokotronis.
The latest financial results show McClatchy, like other newspaper publishers, continues to struggle with the transition to a digital-first media landscape. Total revenue fell 6.6 percent in the quarter, to $234.7 million, led by a drop of 11.1 percent in advertising sales. The company blamed “softness in traditional print advertising and direct marketing” for the continued drop in ad sales.
Print advertising, once the mainstay of the newspaper business, accounted for just 28 percent of McClatchy’s total revenue during the quarter.
On the plus side, digital advertising grew 4.9 percent. Digital-only advertising – those ads not tied to print ad sales – jumped 15.2 percent. Circulation and other audience revenues climbed 1.9 percent, to $91 million. The number of digital-only subscribers rose to 80,300, an increase of 3.3 percent from a year ago.
President and Chief Executive Pat Talamantes said McClatchy is making progress in its digital transformation. “We know this has been a long trip, but we’re starting to see green shoots,” he said on a conference call with investment analysts.
McClatchy shares closed at $18.46, up 10 cents, on the New York Stock Exchange.