LAT circ down to 843,432 *

That was the average weekday circulation for the six months that ended September 30, according to Editor and Publisher. The report from the Audit Bureau of Circulation says it reflects a 3.79% drop from the same period last year—more than many papers but less than the woeful San Francisco Chronicle, which shed 16.5% of its customers. Comparing circ numbers is notoriously difficult, but we do have this: Last September the LAT year-long figure was 902,164. The May 30 six-month level was 907,997. Here are stats for the top papers from E&P:

Newspaper Sept. 2005 Circ Gain/Loss Change
USA Today 2,296,335 -13,518 -0.59%
The Wall Street Journal 2,083,660 -23,114 -1.10%
The New York Times 1,126,190 5,133 0.46%
Los Angeles Times 843,432 -33,184 -3.79%
Daily News, New York 688,584 -26,468 -3.70%
The Washington Post 678,779 -28,991 -4.09%
New York Post 662,681 -11,708 -1.74%
Chicago Tribune 586,122 -14,866 -2.47%
Houston Chronicle (M-S) 521,419 -33,367 -6.01%
Boston Globe 414,225 -37,246 -8.25%

Obviously, the days of million-plus weekday circulation for the Times—which is what the Tribune Company bought—are just a fading memory. Here's a frank view of the future of newspapers from Tom Fielder, executive editor of the Miami Herald:

"Circulation will continue to drop until there will be a plateauing, then I expect a rapid decline. Newspapers will become supplemental reading for a very elite audience," he added, and the online edition "will be where the popular press lives."

After the jump, Tribune Company in its third quarter report to shareholders and employees spins the news as positive because its papers didn't lose readers at the same rate as before (but still lost.) Later I'll post some tales about the amazing deals that Times readers get thrown their way when they call in and try to end their subscriptions.

Update: LAT says it's 869,819.

Update to Shareholders and Employees The soft advertising environment continues to affect the media industry. This is reflected in Tribune> '> s third quarter financial results. However, we achieved meaningful progress during the quarter in several areas, including newspaper circulation. Our ongoing emphasis on cost management also is producing results.

Strategies to improve circulation are a top priority at our newspapers and third quarter trends improved considerably from the second quarter. While net paid circulation and revenue still declined, editorial innovations and marketing programs are making a positive difference.

Third quarter advertising revenues for the publishing group were up 2 percent from the same period a year ago. Classified ad revenues gained 7 percent, driven largely by growth in online help wanted through CareerBuilder. Total interactive revenues grew 46 percent in the quarter.

Interactive, our fastest-growing business, combined with targeted publications, will generate nearly $500 million in revenue this year for Tribune Publishing. This shows the importance of innovation as we look to deliver value for readers and advertisers in new ways.

In television, the sluggish ad climate and ratings issues at our stations continue to impact revenues. However, returning shows on The WB Network such as "Gilmore Girls," "Everwood" and "Smallville" are performing well, along with "Supernatural," a new series. New shows "Prison Break" and "Bones" are off to a good start at our six Fox affiliates.

Besides top-line revenue growth, our businesses are focused on efficiency. This includes tightly managing daily operating expenses and improving their cost structures. For example, Newsday recently reduced staff in its New York City newsroom as it sharpens its focus on the Long Island market. All of our newspapers are pursuing further cost reductions to be implemented by year end.

Evening newscasts at our Philadelphia and San Diego television stations will now be produced by the NBC affiliate in their markets. A similar arrangement has delivered good results for our Miami station.

Tribune's new Washington media center is nearing completion. Staff from our D.C. newspaper and broadcasting bureaus will move into the facility in early December. The co-located bureaus will lower operating costs significantly and improve our news coverage through better coordination. Vickie Walton-James, Washington senior editor for Tribune Publishing, will lead the coordination efforts between the Los Angeles Times, Chicago Tribune and other newspapers.

Matthew Bender Tax Case

On Sept. 27, the U.S. Tax Court ruled against our position in the Matthew Bender case, a dispute with the Internal Revenue Service that Tribune inherited when we acquired The Times Mirror Company in 2000. In effect, the court said that Times Mirror's 1998 reorganization of subsidiary Matthew Bender was a sale, and therefore taxable. We paid the $880 million federal portion of the required tax payment and are appealing the Tax Court' s decision.

Our Values in Action

The major news story of the quarter was Hurricane Katrina. Operations at our two television stations in New Orleans, WGNO and WNOL, were disrupted when the storm hit on Aug. 29. None of our 124 local employees were seriously injured, but personal property losses were significant. Tribune employees nationwide reached out to help their colleagues, contributing to a special fund that ultimately totaled more than $400,000. In addition, the McCormick Tribune Foundation's Hurricane Katrina Relief Campaign raised more than $9.3 million, and the Foundation added $1 million in matching funds.

In Katrina's aftermath, the value of our nationwide news network and technical resources was never greater. Employees throughout our publishing and broadcasting groups rose to the occasion, demonstrating strong teamwork. In particular, WGNO''s "ABC26 News" staff members performed under extremely difficult circumstances to give viewers and website users vital information during the crisis. We are grateful to WBRZ, the ABC affiliate in Baton Rouge, which provided shelter and a working partnership for our New Orleans employees.
As reported in this issue's cover story, we are gradually rebuilding our business in New Orleans. Larry Delia and the WGNO/WNOL management team are leading these efforts with great innovation, and our stations will play an important role as the city recovers.

Executive Changes

Group Vice Presidents John Reardon and John Vitanovec are overseeing broadcast operations following the resignation of Pat Mullen, Tribune Broadcasting president. Both are strong leaders with extensive television management experience at Tribune.

John Manzi was named vice president/general manager of KWBP-TV in Portland, Ore. He was previously the station's general sales manager.

Orlando Sentinel Communications appointed René Rodríguez general manager of El Sentinel, the company's weekly Spanish-language newspaper. René joins Tribune from The Company of Entertainment Marketing in Miami where he was a partner and director/entertainment sales and marketing.

Cash Dividend

At its Oct. 19 meeting, the Tribune board of directors declared a regular quarterly dividend of $.18 per share of common stock, payable on Dec. 8 to shareholders of record at the close of business on Nov. 23.


Current business conditions are challenging for all media companies, a fact reflected by the industry's stock market results, our own shares included. However, Tribune is financially strong. Significant cash flow from operations and good financial planning give us the flexibility to pay down debt, invest in our core businesses, buy back our stock and make acquisitions that fit strategically.

Ultimately, Tribune's success depends on people, and Hurricane Katrina showed our employees at their best. They demonstrated great local leadership, outstanding journalism and technical creativity. These talents are evident throughout the company and will play an important role as we strive to improve Tribune's performance.

Dennis J. FitzSimons
Chairman, President and Chief Executive Officer

October 27, 2005

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