New Media Investment Group Inc., owner of The Florida Times-Union and 145 other daily newspapers, is growing revenue, but not because of its newspaper business.
New Media, which operates its newspapers through its GateHouse division, reported 2018 revenue rose by 13.7 percent to $1.526 billion.
“This was driven by a continued diversification of our revenue away from traditional print advertising,” CEO Michael Reed said last week in the company’s quarterly conference call with analysts.
“Print advertising made up only 41 percent of total revenue in 2018 and that compares to 48 percent just two years ago in 2016,” he said.
Reed said New Media’s revenue growth was driven by its GateHouse Live and Promotions division, an events and promotions business, and UpCurve, which provides technology solutions for small and medium-size businesses.
The company has been marketing those businesses in communities it also serves with newspapers. Reed said those businesses grew revenue by more than 30 percent last year.
“They have now grown into a meaningful revenue stream for us, and we believe we will continue to see similar growth going forward from them,” he said.
“Importantly, all of these new businesses are also cash flow positive with margin-expansion opportunity ahead.”
Meanwhile, print advertising dropped 13.7 percent on an organic same-store basis, meaning newspapers that were owned for more than one year.
Print advertising has been impacted by the struggles of some major retailers, Reed said.
“Retail sales continue to migrate away from brick-and-mortar stores to online retailers and that forces them to contract their advertising spend, and we saw that in the fourth quarter,” he said.
Also, “we saw several high-profile bankruptcies among retailers during the quarter, which dampened preprint revenues,” he said.
Fourth-quarter print advertising revenue decreased 15 percent on a same-store basis.
Declining circulation also is impacting the print business. Same-store circulation revenue fell by 2.2 percent last year.
In its annual report filed last week, New Media said the Times-Union’s Sunday circulation fell 21 percent to 46,988, down from circulation of 59,275 in the 2017 annual report.
Another New Media newspaper, the St. Augustine Record, had Sunday circulation of 9,908, according to the 2018 annual report. The 2017 report did not give a figure for the Record.
The annual reports also show a decline in traffic on the newspapers’ web sites.
The 2017 annual report said jacksonville.com had 10.4 million monthly page views and staugustine.com had 1.5 million. The 2018 report showed 5.8 million page views per month for the Times-Union site, a 44 percent drop, and 1 million for the Record, a 33 percent decline.
New Media bought the Times-Union, the Record and nine other daily newspapers and other properties from Morris Publishing Group in 2017.
The Florida Times-Union is a WJCT News partner.
This story was originally published by our partner the Jacksonville Daily Record.