Newspaper Credit Outlook Deteriorating, Moody’s Cautions ...

From Barron's:

The credit outlook for the U.S. newspaper sector is getting worse, Moody’s asserted today, as it revised its outlook for the industry to negative from stable. The bearish stance reflects “a waning of recent moderation in advertising revenue declines,” the rating agency said in a statement.

According to Moody’s, newspaper revenues are likely to drop 5%-6% this year, with a mid-single-digit drop next year, following a 22% decline in 2009.

“Despite this respite in the rate of decline for newspaper advertising, the industry’s longer-term secular deterioration is returning to the forefront,” Moody’s VP John Puchalla said in a statement. “Even in a slowly growing economy, the erosion of newspapers’ readership share and pricing power continues unabated as readers embrace free and low-cost content on the web and mobile devices.”