This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

#DigitalSkeptic: Media Stocks Are Nothing but Bad News

NEW YORK (TheStreet) -- Forget new media, old media and all the media in between. My question is: When it comes to making money by putting words on a page, is there anything left in media businesses at all?

Never mind slogging through the dark and stormy East Coast weather over the past couple of months; my annual spring trek through text-on-page media companies' annual statements has been a hate mission like none I can remember.

Save for a major exception or two, which basically boils down to Facebook (FB), 2013 shaped up to be the year when, no matter which large media company tree I climbed, it sure felt like big limbs were about to come down.

Over and over again, there were stubborn, fundamental, multi-year trends of near-zero net earnings, wonky or feeble operating performance and truly dubious management calls, indicating some publishing companies are facing even dimmer prospects ahead.

Must Read: The NFL Doesn't Discriminate Against Money

Here then -- if you have the guts -- are my ghoulish snapshots of my big wander through what has become a dark and chilly media forest.

New Media No Better Than Old

Even after nearly 10 years of migration to digital platforms, the annual performance of traditional print media companies is simply awful. The year 2013 featured an "Annual Profit Margin Less than Zero" Club including, as far as I can see, Lee Enterprises (LEE)GateHouse Media (GHSEQ) and The E.W. Scripps Company  (SSP). And let's keep in mind that the "Pretty Darn Close to Zero" Club -- where net margins were effectively at or below the 5% global inflation rate -- is also jam-packed with such storied brands as The McClatchy Company, News Corp. (NWSA - Get Report) and The New York Times (NYT - Get Report).

Even more ominous, the publishing and media firms that actually managed to show profits still moved in the wrong net-margin direction year over year. Gannett (GCI), Journal Communications (JRN) and Daily Journal Corporation (DJCO) all saw profit margins slide from 2012 to 2013. Gannett, for example, saw profits fall by 9% year over year.

And 2013 was a bull market. How does that happen to advertiser-driven businesses?

New media companies were absolutely no healthier. No less than AOL (AOL) -- which, let's keep in mind, features such top Web properties as The Huffington Post -- is also a card-carrying member of the "Pretty Darn Close to Zero" Earnings Club. Believe it or not, this Web bellwether somehow spent roughly $2.2 billion of the $2.3 billion it made in 2013, leaving just $92 million in profit.

Does anybody see the miracle of the frictionless, no-cost media Web? I do not.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AOL $49.99 0.06%
GOOG $639.16 -0.50%
GCI $15.20 1.74%
NYT $12.76 1.35%
NWSA $14.05 3.08%


Chart of I:DJI
DOW 17,050.75 +138.46 0.82%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,810.7880 +19.6360 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs