Mergers News

McClatchy won't rule out CareerBuilder stake sale

NEW YORK (Reuters) - Newspaper publisher McClatchy Co. said on Wednesday it expects further declines in circulation and advertising revenue and signaled it would consider selling its stake in online jobs site CareerBuilder.

McClatchy owns CareerBuilder along with USA Today publisher Gannett Co. Inc. and Los Angeles Times owner Tribune Co.. It has also entered a broad advertising partnership with Internet media company Yahoo Inc..

“We would prefer to stay with CareerBuilder,” McClatchy Chief Executive Gary Pruitt said at a newspaper industry conference. “We have to consider all options, which would include the possibility of selling our share out.”

Asked about McClatchy’s future amid a wave of media industry buyouts, Pruitt said, “We have no plans to take the company private.”

McClatchy said on Wednesday its May advertising revenue dropped 11.5 percent due to weak classified ads in the wake of a housing downturn, and it expects a further decline in June advertising.

McClatchy said it expects advertising trends to improve by the fourth quarter, though revenue will likely still be down.

The company also forecast a 3 percent to 4 percent drop in newspaper circulation through early 2008, with such declines moderating to about 2 percent afterward.

McClatchy’s view is similar to that of other newspaper publishers, which are struggling to increase their Web ad dollars as more readers use the Internet for news.

Online advertising for the year through May was 8.6 percent of the company’s total ad revenue and could reach 10 percent by year-end, helped by retail ads, company executives said.

McClatchy, which publishes the Sacramento Bee and the Miami Herald, is one of the largest U.S. newspaper publishers after it bought Knight Ridder Inc. in 2006.

Pruitt told investors at the conference they should not “look for major acquisitions from McClatchy any time soon.”

McClatchy shares rose 6 cents to $26.00 in late-morning trade on the New York Stock Exchange.

Reporting by Kenneth Li and Robert MacMillan; additional reporting by Saumyadeb Chakrabarty in Bangalore