Newspapers, magazines and radio, already reeling from an ad recession, may be headed towards even lower ad expenditures on the horizon. Goldman Sachs said today that newspapers earnings and revenues would accelerate in a recession. Sachs also forecast separately that the United States economy is headed into a light recession this year. From Reuters:
”’We believe this secular trend will be exacerbated by a cyclical downturn in 2008, particularly affecting the classified categories, resulting in what we believe will be the industry’s weakest revenue performance since 2001,’ it said.
”…They forecast newspaper ad revenue would drop nearly 8 percent — far steeper than an original forecast of a 2.6 percent decline.
”Newspapers have already made deep cost cuts by laying off employees and reducing print-page widths, giving them little room for additional cost savings to take pressure off margins.”
The AP is reporting that following the Goldman Sachs gloomy forecast shares of several newspaper stocks — including The New York Times Company — hit 52-week lows. In a touch of good news, Goldman Sachs projects that the economy would rebound by as early as 2009.