The McClatchy Company (MNI), the newspaper publisher, recently said that it is seeing some signs of improvement in the advertising environment. The company notified that the rate of fall in advertising revenue is decelerating. Sacramento-based company now expects advertising revenue to dip in the low- to mid-20s percentage range in fourth-quarter 2009 compared to a decline of 28.1% in the third quarter and 30.2% in the second quarter. 

Cash expenses are also expected to fall in the high-20s percentage range, whereas operating cash flow is expected to rise in the fourth quarter. For fiscal year 2010, management expects to at the least maintain operating cash flow. 

The company, like other newspaper companies, Washington Post Company (WPO), Journal Communications Inc. (JRN), Gannet Co. Inc. (GCI) and The New York Times Company (NYT), has long been grappling with the slump in print advertising demand prompted by the global meltdown, as advertisers are migrating to the Internet driven by increasing online readership and lower ad prices than print. 

This had compelled McClatchy, the parent company of The Charlotte Observer and 29 other daily newspapers, to trim headcount, suspend dividend, halt matching contribution to employee 401(k) funds, lower executive pay, freeze employee pension plans, and offer a voluntary buyout program. However, recently, the company announced that it would lift the wage freeze beginning January 2010. 

In a separate story, McClatchy has been striving to sell 10 acres of land adjacent to the Miami Herald, which has been persistently delayed. The company had extended the closing date of the deal for the second time to Dec 31, 2009 from Jun 30, 2009, previously. 

The purchase price remains at $190 million, of which $10 million has already been received by the company in the form of a non-refundable deposit. Citisquare Group, the buyer has repeatedly failed to exercise its option to buy the land as it is finding it difficult to raise finance following the collapse of the Miami real estate market. If the deal is not completed by the end of the year, McClatchy will be entitled to a $6 million termination fee.
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