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Newspaper Ad Sales: What Bottom?

Newspaper ad sales in the second quarter plunge 30%, again.
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NEW YORK (TheStreet) -- Publicly traded newspaper publishers appeared to finish the second-quarter earnings season on a high note.

Most turned in results that surprised Wall Street on the upside, including

Gannett

(GCI) - Get Gannett Co., Inc. Report

, the

New York Times

(NYT) - Get New York Times Company Class A Report

,

EW Scripps

(SSP) - Get E. W. Scripps Company Class A Report

,

McClatchy

(MNI) - Get McClatchy Company Class A Report

and

Journal Communications

(JRN)

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.

(A notable exception was Rupert Murdochs'

News Corp.

(NWSA) - Get News Corporation Class A Report

, publisher of the

New York Post

and

The Wall Street Journal

among many other titles, which reported a huge second-quarter loss on the writedown of its burgeoning MySpace debacle.)

Further, many

media bosses made salutary remarks

about the coming recovery: business had reached a bottom, they seemed to be saying. Time to prepare for the recovery.

As a result, newspaper stocks have rallied strongly since the winter. Gannett shares have more than tripled in value since early March, while New York Times shares have more than doubled over roughly the same period.

But second-quarter data on newspaper ad sales industry-wide, released Thursday by a trade group, raises the question: Why should anyone believe those bosses?

According to the Newspaper Association of America, print ad sales plunged by more than 30% in the quarter from a year ago, the worst decline on record. It's also steeper than the 29.7% drop registered in the first quarter -- which had been

the worst decline on record

.

Yes, the second-quarter sales numbers didn't come as a shock, but a kind of cry-wolf phenomenon seems to have developed. Publishers started calling a bottom to the ad recession in April, when they released their first-quarter results. Then they did it again in July. Presumably, in October, they'll still be looking forward to the recovery.

It's perhaps telling when newspaper-industry representatives need to seek out data other than their own for signs of optimism.

"This data represents a rearview mirror perspective on what we all know was a terrible stretch of bad road," Newspaper Association CEO John Sturm said in a statement that accompanied his group's ad-sales figures.

He then skipped over those very dismal quarterly numbers in order to cite recent stats from Nielsen Online showing that "more than 70 million people visited newspaper Web sites in June -- more than one-third of all Internet users," and from the media-business consulting firm MORI Research, which indicated that "newspaper advertising remains the leading advertising medium cited by consumers in planning, shopping and making purchasing decisions."

Sturm then made the obligatory industry sales pitch.

"When the economy eventually begins its recovery, advertisers will return to spending, and newspapers will find themselves extremely well positioned to harness the strength of their print and digital platforms to build a brighter future," he said.

The crisis that has befallen print media is well known: The Great Recession has gutted ad sales. The Internet has ruined reading not conducted on a screen. Many big newspaper chains -- including McClatchy and Gannett -- remain default risks.

Meanwhile, remedies for saving the industry have run the gamut from

various schemes

to charge for newspaper reporting online to a government bailout.

-- Written by Scott Eden in New York

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