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Tickers in this Article: NYT, TRB, WPO, F, MOT, GE, MNST
The old joke about newspapers being black and white, and read (red) all over has never been more true. Advertising revenue is falling across the board, and so are share prices. It is good thing the big media outlets own other assets such as radio and television stations as well as professional sports teams or the red ink would really be flowing. With traditional readership waning, the future for the media giants may be point-and-click news. We're going to look at three companies embracing the trend.

Still a Family Business
The New York Times (NYSE: NYT) is certainly one of the leading media companies. It has properties other than its flagship paper such as The Boston Globe, 15 regional newspapers and 35 websites including notable such as About.com, Boston.com and NYTimes.com. One would think that, with properties like these, the company would have better results. However, the NYT is as vulnerable to economic conditions as the rest of the industry.

One of the major problems is the lack of advertising revenue in general and real estate-related advertising in particular. At least circulation was up 2.7%. On the bright side, NYT's digital enterprises have been turning in solid results with the latest quarter coming in at a plus 22%, considerably higher than its peer-group average. The management at NYT has recognized this phenomenon and is responding with more internet based content.

The problem is that similar to Ford (NYSE: F) or Motorola (NYSE: MOT), NYT is a family business. Former General Electric (NYSE: GE) CEO Jack Welch has offered to buy the NYT but the Ochs Sulzberger family has no sales plans. What we do know is that the NYT's television stations have been sold and should close sometime this year.

Breaking Up is Hard To Do
Tribune (NYSE: TRB) is one of America's leading media outlets. In one form or another, its assets reach nearly 80% of the U.S. population. Its print properties include such names as the Chicago Tribune and Newsday. Other assets of note include twenty television stations and the Chicago Cubs baseball team. Similar to other media, its advertising has been particularly hard hit in classified and real estate.

Shrinking advertising revenue is a big problem, but The Tribune has also seen its circulation decline 7% this year. The combined result is that its operation margin has gone from more than 17% to just less than 15%. However, in similar fashion to the NYT, Tribune's digital profit contribution is significant, accounting for 10% of the firm's revenue and TRB owns a significant stake in jobs website, CareerBuilder.com.

While the Chandler family owns much of TRB, Chicago real estate czar Sam Zell has offered to take TRB private in a multi-staged deal and sell off the assets. The deal is potentially worth roughly $34 per share.


A Matter of Degrees

Washington Post (NYSE: WPO), just like our first two media giants, is bleeding badly in terms of advertising revenue. Fortunately, the firm also owns six very profitable television broadcast stations; it owns cable television systems; it owns Newsweek magazine; and its saving grace, Kaplan University, WPO's online higher-educational franchise. Kaplan has grown at 28% per year for quite some time, and it now accounts for literally half the company's revenue with it 27,600 students.

Interestingly, it is estimated that almost 90% of the Executive and Legislative branches of U.S. government read the Washington Post daily.

It should be clear to Washington Post management that Kaplan and the internet are the future of the business - even given education's somewhat cyclical nature. It should also be equally clear that WPO may need to make some acquisitions to grow its revenue base and profit.

Read All About It
The one important asset these companies all possess is an internet business. The internet has changed the way we get our information, and it is a safe bet that this venue will continue to evolve.

We haven't talked about how these firm's shares have fared yet. Over the past three years, NYT has declined about 45%, TRB lost around 30% and WPO suffered about 15%. Black and white and read all over indeed.

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