View all newsletters
Sign up for our free email newsletters

Fighting for quality news media in the digital age.

  1. Archive content
September 18, 2008

Meltdown implications: Eerie silence hangs over media stocks

By Peter Kirwan MM blog

You’re probably assuming that the worst has happened to the share prices of media companies this week.

Not quite. Much of the carnage has been confined to financial stocks. By contrast, the broad FTSE-100 index of Britain’s largest quoted companies fell by 7% between Monday morning and Wednesday evening.

That’s a lot by normal standards. But it’s not quite a repeat of 1929. And it’s nothing like the hammering taken by HBOS, Barclays and HSBC.

Predictably, however, the media sector fared worse than most. Trinity Mirror’s shares opened at 114p on Monday morning. Last night, they closed at 89p.

Trinity racked up big declines on Monday and Tuesday. Yesterday, the company’s share price seemed to stabilize. This morning, it’s up slightly. Overall, the company’s share price has declined by around 25% since the start of the week.

Johnston Press opened at 45p on Monday morning and fell to 42p at the close. On Tuesday, it recovered to 48p. Yesterday, it declined to 37p. This morning, JP is also up slightly. Overall: a decline of some 17%.

Two things need to be said about these numbers. The first is that stock market has been behaving erratically, to say the least. A huge (and bankrupt) Lehman Brothers sold millions of shares into the market earlier this week, skewing prices all over the place.

Content from our partners
Publishing on the open web is broken, how generative AI could help fix it
Impress: Regulation, arbitration and complaints resolution
Papermule: Workflow automation for publishers

The second is a reminder that Trinity and Johnston Press remain two of the sector’s most exposed companies. Despite this, their share prices have yet to go below the lows recorded earlier this summer when short selling them was in vogue.

For a slightly more upbeat view, take a look at the shares of United Business Media, the UK’s largest quoted B2B publisher. The company’s shares fell heavily on Monday before stabilizing on Tuesday afternoon and today.

Overall decline? From 555p to 515p, UBM fell by around 7% — exactly in line with the FTSE-100.

More generally, investors and analysts are still a long way from figuring out the implications of this week’s crash.

Even before this week’s events, the news was bad. On Monday, Newsquest reported that classified ad revenues fell by a whopping 30% during August. Yesterday’s unemployment figures showed the fastest increase in benefit claimants since 1992.

On top of this, the savage forced consolidation of the banking sector means that corporate borrowing will become even more expensive. Consumers will lose even more confidence. And marketers will cut ad budgets further.

How much? No-one knows. But when the dust settles, it makes sense to anticipate another round of speculation about debt levels at places like Johnston Press and Trinity Mirror.

This time, analysts will have to factor the fallout from a remodelled banking system into the equation. It’s hard to see anything positive emerging from that.

Topics in this article : , ,

Email to point out mistakes, provide story tips or send in a letter for publication on our "Letters Page" blog

Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network