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New York Times Co., Gannett Co., Media General , and McClatchy Co. have all reported profits in the second quarter and the results have led to share prices doubling and tripling. The developments must come as a surprise to those who saw the poor performance of recent quarters and convinced themselves that the newspaper industry is dead and gone. Admittedly, the positive results in the past 3 months were achieved through restructuring, reducing news staffs to their 1970s levels, heavy cost cutting everywhere, and postponing reinvestments. But it shows there is still life in the industry and that the industry can be expected to recover in the coming year if economic conditions continue their current rate of improvement. As I have said many times, a industry with $50 billion in revenue is not going to ignore that revenue, close the doors, and disappear overnight. Many have viewed the poor company performance in the past 2 years and then mistaken the steep concurrent drop in advertising as

Financial pages are full of developments and changes at newspaper companies and these are being commented upon anxiously by those in the industry. Unpleasant conditions certainly abound, but these development are not indications that the industry is dead or dying in the near future. What they signal is that things which worked in the past are not working now, that newspaper companies are badly in need of restructuring, refocusing, and renewal, and that the boards of the companies and the company managers are taking badly needed action. The techniques for restructuring are no mystery. First, you need some cash. This can be obtained by attracting new capital through investment or loans. New York Times Co. did this recently by borrowings $250 million from Carlos Slim. Other firms are looking for friendly investors with liquidity. Another way of raising cash is by turning assets into cash. A classic move made by many types of firms is the sell their building and lease back any space that i

Recent weeks have not been kind to newspaper company finances, with lost value and unhappy investors plaguing publicly traded firms. The Journal Register Co. was delisted from New York Stock Exchange because it share price remained below $1, reducing its market capitalization about $12 million, less than one-fifth the capitalization required to be traded on the big board. The Sun-Times Media Group stock also continued trading below $1 and its market capitalization dropped to $61 million, drawing a delisting warming from the New York Stock Exchange. Although those firms have hardly been notable as the best managed firms in recent years, their problems in inspiring investors are symptomatic of difficulties facing newspaper firms in the market. Meanwhile, Moody’s Investors Service lowered the New York Times and McClatchy Co. debt ratings and lowered the Gatehouse Media even further in the junk category. Other firms are also having problems with capital related issues. Rumors are rampant t