Reconversion in a declining market: the return to profitability of the print newspaper industry

ABSTRACT

The end of the economic crisis initiated in 2008 was not the end of the newspaper crisis. The shifts introduced by digitalisation are increasingly deeper, and advertising spending on newspapers continued to fall during the economic recovery. To study how the firms adapted to this declining market, this article performs an in-depth financial analysis of 98 Spanish print newspaper publishers over the period 2009–2018, focusing on profitability. The results show very low or even negative returns on assets, but a positive trend in profitability is observed from 2014 onwards, despite the stagnation of advertising spending. Companies reduced their costs to a greater extent than the fall in revenues, improving their profit margins. National newspapers increased total asset turnover via decapitalisations, becoming smaller and more efficient.

KEYWORDS:

• Newspaper industry
• newspaper crisis
• reconversion
• financial analysis
• profitability

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Specifically, the recession lasted from the last quarter of 2008 to the last quarter of 2013; although in 2010 Spanish GDP registered growth (albeit close to zero) in two quarters.

Additional information

Funding

This research received no specific grant from any funding agency.

Notes on contributors

Raul Rios-Rodríguez

Raul Rios-Rodríguez (PhD) is Lecturer Professor at the Department of Applied Economics of the Universidade de Santiago de Compostela. His research focuses on economic journalism and media economics.

Sara Fernández-López

Sara Fernández-López (PhD) is Associate Professor at the Department of Financial Economics and Accounting of the Universidade de Santiago de Compostela. Her research focuses on entrepreneurship and household finances.

Adrián Dios-Vicente

Adrián Dios-Vicente (PhD) is Assistant Professor at the Department of Applied Economics of the Universidade de Santiago de Compostela. His research focuses on economic and business history.

David Rodeiro-Pazos

David Rodeiro-Pazos (PhD) is Associate Professor in the Department of Financial Economics and Accounting of the Universidade de Santiago de Compostela. His research focuses on technology transfer, creation of university spin-offs, and innovation and business growth.