MediaNews Group reports that its profits rose in the fourth quarter, but its sales dropped — even from its Internet operations.
The company, headed by Dean Singleton (left), also noted that it has been repaid $3.8 million in legal fees following its suit against a publisher who left one of its papers for a competitor, taking a laptop full of advertising data with him.
Perhaps the most startling news in the company's fourth-quarter report appears on page 24, where it says revenues from its Internet operations decreased 8.3% in the quarter (as compared to the same quarter in 2007). Singleton has repeatedly stated that the Internet is the future of MediaNews, and the company has been diverting its resources to its online operations.
The report has more bad news. The company's total revenues shrunk 7.3% from $372.5 million in Q4 06 to $345.2 million in Q4 07 on a same-paper basis, excluding papers acquired during the year (see page 20). Retail was down 16.0%, national 18.8%, classified 30.3% and pre-print inserts 4% (page 24).
While sales dropped, profits jumped 33.9% compared to the year-ago quarter, from $12.9 million to $17.35 million (also page 20).
On page 23, the quarterly report notes that in December the company recovered legal fees of approximately $3.8 million associated with its lawsuit against Par Ridder (right), who quit as publisher of the company's St. Paul Pioneer Press and went across town to head the Minneapolis Star Tribune. Ridder, son of former Knight Ridder chief executive and chairman Tony Ridder, took with him a couple of the Pioneer Press's key employees and a laptop loaded with financial information about the MediaNews paper. Singleton sued, saying "In Par's world, he could get away with anything because daddy would always take care of him." A judge removed Ridder from his job as publisher, citing his "cavalier" behavior.
While MediaNews Group is privately held, it posts its financials on the Security and Exchange Comission's Web site as if it were a public company. That may be due to the large number of parties that have lent MediaNews money over the years and want to see how the company is doing. MediaNews owns most of the paid dailies in the Bay Area including the Mercury News, Contra Costa Times, Oakland Tribune, Marin Independent Journal and Palo Alto Daily News.