Friday, October 10, 1997

10/10/97: Newspaper Revenues, Wiley Pearson, Primedia, ReedElsevier

Newspaper Publishers Expected to Post Higher Earnings on Strong Ad Revenue:
Gannett, Knight-Ridder, New York Times Co, Washington Post, Tribune Co. Times Mirror, A.H. Belo, Providence Journal, Dow Jones & Co., E.W. Scripps, Central Newspapers, Media General
Scripps Completes Acquisitions of Harte-Hanks Newspapers and the Food Network
Gannet Buys Two Maine TV Stations
Cowles Media Company for sale
Changes at Reed Elsevier Business Information
News Corp. Chief Admits Setbacks
Wiley to Acquire Van Nostrand Reinhold
Sulzberger Steps Down As NYT Chairman, Company Profits Up
Addison Wesley Longman and Headland Become Digital Media Partners for Distance Learning on World Wide Web
Earth's Biggest Bookstore Serves Millionth Unique Customer
Dutch Publishing Merger Creates Formidable Online Business

Recent News

Newspaper Publishers Expected to Post Higher Earnings on Strong Ad Revenue:
Newspaper publishers' third-quarter earnings are expected to be higher than a year ago as advertising revenue continued to flow in the period and newsprint prices rose only modestly. The price of newsprint, which typically constitutes about 20% of a publisher's costs, rose in the third quarter from the second period but was still below the year-earlier level.

Gannett Co. stands out among big publishers, with third-quarter earnings expected to rise to $1.01 a share from 79 cents, according to analysts' estimates compiled by First Call Inc. Revenue has been climbing at the Arlington, Va., company's flagship publication, USA Today, as well as at its smaller newspapers and television stations. Knight-Ridder has been divesting non-core assets and fine-tuning its newspaper portfolio by buying, selling and swapping papers. First Call puts earnings for the company, which publishes the Miami Herald, the Philadelphia Inquirer and the San Jose Mercury News, at 42 cents a share, up from 37 cents a year earlier. New York Times Co.'s earnings are expected to rise to 43 cents a share in the third quarter from 38 cents a year earlier as its flagship newspaper cashes in on booming national advertising.

Washington Post Co.'s earnings are seen rising to $5.14 a share for the quarter from $5 a share. Tribune Co.'s earnings are expected to rise to 49 cents a share from 46 cents. Tribune, which publishes the Chicago Tribune, gained a substantial TV presence through its purchase of Renaissance Communications last spring. At Times Mirror Co. of Los Angeles, third-quarter earnings are seen jumping to 59 cents a share from 43 cents, but analysts caution that the increase isn't so much from top-line growth as it is from a massive restructuring and cost cutting initiated by Chief Executive Officer Mark Willes 18 months ago.

A.H. Belo & Co.'s earnings are expected to drop sharply to 18 cents a share from 42 cents. The drop reflects dilution from the Dallas company's $1.5 billion acquisition of Providence Journal Co. early this year. Dow Jones & Co.'s earnings are expected to fall to 22 cents a share from 33 cents. The New York publisher of The Wall Street Journal said early in the year that it expects weaker earnings as it invests as much as $650 million over the next several years to restructure its dataservices unit, Dow Jones Markets, formerly called Telerate.

Among smaller publishers: Earnings at E.W. Scripps Co. of Cincinnati are seen rising to 34 cents a share from 29 cents. Central Newspapers Inc. of Indianapolis is expected to post an earnings jump to 75 cents a share from 57 cents. At Media General of Richmond, Va., earnings are seen falling to 35 cents a share from 59 cents.

Despite generally upbeat numbers, analysts are somewhat cautious on the sector going forward. Newsprint prices may not be rising as quickly as feared, but they definitely are headed up. Newsprint, which cost about $570 a metric ton in the third quarter, will reach $600 a ton in the first quarter of 1998, up almost $100 from the year-earlier period. (A metric ton equals 2,204.62 pounds). Analysts are not convinced that retail advertising, the largest chunk of ads for most newspapers, will be strong enough to offset higher newsprint prices.

WSJ via NewsEDGE Copyright (c) 1997 Dow Jones and Company, Inc. Received via NewsEDGE from Desktop Data, Inc.: 10/06/97 02:14:51

Scripps Completes Acquisitions of Harte-Hanks Newspapers and the Food Network

CINCINNATI, Oct. 15 /PRNewswire/ -- The E. W. Scripps Company (NYSE: SSP) today completed two previously announced transactions at a total cost of approximately $700 million.
First, Scripps acquired six newspapers (five in Texas and one in South Carolina), plus stations KENS-TV and KENS-AM in San Antonio from Harte-Hanks Communications. Then, through a subsequent transaction, Scripps traded the KENS stations to A.H. Belo in exchange for Belo's 56 percent controlling interest in The Food Network and $75 million in cash. Transfer of the KENS broadcast licenses to Belo is subject to final government approval.

Following these transactions, Scripps operates:
* Nine network-affiliated television stations;
* Newspapers in 20 markets;
* Two television networks -- Home & Garden Television and The Food
* United Media, a licensor and syndicator of news features and comics;
* Cinetel Productions, a creator of programming primarily for cable TV
* Scripps Howard Productions, a creator of programming primarily for
broadcast TV networks.

Source: The E.W. Scripps Company

Gannet Buys Two Maine TV Stations

Gannett Co., Arlington, Va., said it agreed to acquire two Maine television stations. Terms weren't disclosed. Gannett is buying WCSH, the NBC affiliate in Portland, from Maine Radio & Television Co., and WLBZ, the NBC affiliate in Bangor, from Maine Broadcasting Co. The transaction is subject to the approval of the Federal Communications Commission. Upon completion of this transaction, Gannett Broadcasting will have 20 television stations.

Source: Dow Jones

Cowles Media Company for sale
Recently the trustees of the Cowles family announced that it was examining `strategic alternatives'' to its ownership of Cowles Media Co, and The Star Tribune, its flagship newspaper, including a possible sale that could reap at least $1 billion. There has been only a very thin market for the relatively few shares of Cowles Media that are traded, and the price of the stock today, in the mid-$50s - is still undervalued compared with the more than $70 a share that analysts think it would be worth in a sale. The Minneapolis StarTribune accounts for about two-thirds of Cowles Media's revenues, which was $517 million in the fiscal year ended March 29. The company also publishes a number of small magazines and business and marketing publications.

Cowles Media is not discussing its list of possible suitors, nor would its spokesman say whether the company had, in fact, tried and failed to line up a buyer before it announced its possible sale last month. Many analysts think a deal may be reached by Thanksgiving. The Washington Post Co. is considered to be the front-runner because it already owns 28 percent of the Cowles stock. Its treasurer, Jay Morse, said his company did not comment on potential acquisitions.

Also mentioned is Times Mirror Corp., owner of The Los Angeles Times and Newsday. Its chairman, Mark Willes, the chairman of Times Mirror, has been spinning off companies not directly related to Times Mirror's core media businesses since he came to the company two years ago. But he has said in the past that he would not be opposed to acquisitions that ``fit'' Times Mirror 's publishing and broadcasting interests.

c.1997 N.Y. Times News Service 23:38 EDT OCTOBER 12, 1997

Changes at Reed Elsevier Business Information
Folio, First Day reports of 100 job cuts, magazine and research-units being put up for sale and the establishment of new publishing divisions at Reed Elsevier Business Information, the sprawling Reed Elsevier PLC unit created by the merger of Cahners Publishing and Chilton Publishing. Company spokesperson Margaret Pantridge tells First Day that nine properties are being
divested in addition to the four computer magazines (Government Computer News, Government Computer News State & Local, Datamation and Reseller Management) previously announced.

The nine properties newly up for sale include: Chilton Research Services, a major operation serving Fortune 500 companies, and the Business Research Group, which is being lumped in with the divestment of the four aforementioned computer magazines; as well as seven other magazines including CabinetMaker; Cheese Market News; Dairy Foods; Furniture Design & Manufacturing; Instrumentation & Control Systems; Home Improvement Market; and Upholstery Design & Manufacturing.

Key personnel moves in a realignment of the Cahners-Chilton entities include the naming of three former Chilton executives to a steering committee: Lee Hufnagel, Andrew Weber and Bill O'Brien. Pantridge says the realignment "basically" establishes three magazine divisions: the 39-title manufacturing/new-product unit (among its notable titles are Design News and Manufacturing Systems); entertainment, communications and media, headed by headed by executive VP Mark Lieberman, who'll oversee Variety, Broadcasting & Cable, Publishers Weekly, Multichannel News and 18 other publications; and the 59-title business publications division, headed by executive VP Brian Nairn.

In addition to serving on the steering committee, O'Brien is chief operations officer of the entertainment/communications/media unit. Hufnagel's role is to coordinate the Cahners-Chilton integration. He and the rest of the management team report to Reed Elsevier Business nformation president/CEO Bruce Barnet, based in Newton, MA.

Cowles/Simba Media Daily 10/10/97
Copyright 1997 Cowles Business Media. All rights reserved.

News Corp. Chief Admits Setbacks
Speaking at News Corp.'s annual meeting in Adelaide, Australia, chairman and chief executive Rupert Murdoch offered shareholders an upbeat speech, but also admitted to some setbacks. In discussing News Corp.'s net profits for the year ended June 30, including millions in charges from HarperCollins, the News Corp. chief reported that the troubled book publisher would generate revenues of $700 million and "will be profitable, although not magnificently so." He conceded that the unit was a source of "a great deal of difficulty."

Cowles/Simba Media Daily 10/8/97
Copyright 1997 Cowles Business Media. All rights reserved.

Wiley to Acquire Van Nostrand Reinhold
New York, N.Y. October 9, 1997. Charles R. Ellis, President and Chief Executive Officer of John Wiley & Sons, Inc. (NYSE: JW.A and JW.B), the global publishing company headquartered in New York, today announced that it has reached an agreement with International Thomson Publishing (ITP), a division of The Thomson Corporation (TSE: TOC) to purchase the assets of its Van Nostrand Reinhold (VNR) operating unit, which is located in New York. The terms of the sale, which should close in the fall, were not disclosed; however, the transaction is subject to the Hart-Scott-Rodino waiting period.

VNR is a publisher of books and electronic products for professionals in architecture/design,
environmental/industrial science, culinary arts/hospitality, and business technology. VNR is known for its numerous "franchise" titles, which are regarded by many professionals as indispensable; examples include Ching's Architectural Graphics, Sax's Dangerous Properties of Industrial Materials, the Culinary Institute of America series, Kerzner's Product Management, and
Considine's Van Nostrand Scientific Encyclopedia.

Sulzberger Steps Down As NYT Chairman, Company Profits Up
The New York Times Co. announced on Thursday that Arthur Ochs Sulzberger, its chairman and CEO, has stepped down after leading the company for 24 years, and that in his place Arthur O.
Sulzberger Jr. has been elected chairman, effective immediately. The senior Sulzberger will remain on the board of directors as chairman emeritus, while his son will continue on as publisher of the company's flagship enterprise. In addition, president Russell T. Lewis has been named to the position of CEO.

Online Publishing Information:

Addison Wesley Longman and Headland Become Digital Media Partners for Distance Learning on World Wide Web
Addison Wesley Longman and Headland Digital Media, both Pearson companies, announced today an alliance to provide fully accredited educational materials from leading institutions to students via the World Wide Web. The venture will publish learning and teaching systems so that students of any age and from anywhere in the world can advance their academic degrees online. Leading universities and distinguished scholars and instructors will offer the curriculum.

The alliance is designed for students who want to take academic subjects such as business, mathematics, communications, and computer science by means of the Internet. The venture will also provide online solutions to help students develop the skills and training to succeed outside the classroom. Students will be able to download materials directly from the World Wide Web, thus reducing their costs of commuting and housing, and permitting flexible scheduling. The programs are expected to reach existing students and to extend fully accredited courses to students who might not otherwise be able to attain a college degree.

Each partner brings considerable expertise and industry-specific success to the venture. Addison Wesley Longman, through its global publishing business, has relationships with many of the most respected and highly regarded authors of educational texts. They have also fostered strategic
relationships with top academic institutions.

Earth's Biggest Bookstore Serves Millionth Unique Customer
SEATTLE, Oct. 14 /PRNewswire/ --, Inc. (Nasdaq: AMZN) today announced it will be the first Internet retailer to reach the one-millionth new customer milestone. Celebrating its number one status in e-commerce traffic, the company today kicks off a two-week customer promotion "You're One in a Million at" In just two years, ( has established itself as not only the leader in online booksellers but as the leading Internet retailer, according to the latest report from Media Metrix (formerly PC
Meter). With an estimated 4.5% of all Web households visiting during August, 1997, received more traffic than Internet giants,, and combined.


Dutch Publishing Merger Creates Formidable Online Business
The proposed merger between Reed Elsevier and Wolters Kluwer, would create one of the largest online legal, tax and public records publishers in the United States with 1996 online sales of $410 million, according to Electronic Information Report (EIR) estimates. The deal, if approved by shareholders, would bring together Reed Elsevier's LEXIS LEXIS and Wolters Kluwer's CCH Online services. EIR estimates LEXIS had 1996 sales of $345 million, while CCH Online generated $65 million in 1996. This places the combined properties a close second behind Thomson's WESTLAW online legal service, which posted sales of $450 million in 1996, according to EIR estimates.

Overall, the Dutch combination, to be called Elsevier Wolters Kluwer (EWK), would allow the
companies to overtake Thomson Corp. as the largest professional publisher in the world. EWK
would have pro forma sales of $4.66 billion in 1996. Thomson would be bumped to second place
with sales of $3.39 billion in 1996 and McGraw-Hill would move into a distant third with sales of
$1.37 billion in 1996. The merger, to be conducted as a stock swap, is expected to be completed
in the first quarter 1998.

Apart from size, the combination of CCH and LEXIS brings together complementary content,
according to Meryick Payne, senior partner at Management Practice, a professional publishing
consultancy. CCH's 700 print and CD-ROM tax titles would finally give tax and accounting
professionals, who as a group have shunned online access in favor of CD-ROM and print
products, a reason to try LEXIS-NEXIS, he said. LEXIS-NEXIS's has 839,000 online subscribers.

Conversely, LEXIS's strength in U.S. federal and state case law as well as its broad range of
specialized libraries in securities, banking, the environment, energy, international and public
records, could be the content boost CCH Online needs to invigorate flagging sales. In its second
year under the ownership of Amsterdam-based Wolters Kluwer, CCH's 1996 legal information
sales were flat at $130 million, according to EIR estimates.

Cowles/Simba Media Daily 10/10/97
Copyright 1997 Cowles Business Media. All rights reserved

Newspaper circulation has been declining relative to U.S. household formation for years, and today is only 57 million nationwide. Circulation had been falling by 0.5%-1.0% a year since 1987, but the drop accelerated to 2% in each of the last two years.

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