Standard & Poor's said the ratings downgrade reflects a worsening pace of decline in advertising revenue at the company's newspaper publications, MarketWatch says. In particular, S&P said it worried Gannett's revenue could fall 10% and earnings 20% through 2009.S&P's move followed a similar downgrade announced yesterday by Moody's. Downgrades threaten to increase GCI's borrowing costs, or limit financing availability, at a time when the credit markets are already in turmoil. Gannett needs more options, not fewer.
Why should we pay any attention to what S&P says, in light of this mortgage catastrophe which included ratings agencies like S&P giving lavish ratings to dodgy mortgage-related investment instruments. I think S&P is far too generous to GCI, and may have been paid for this opinion. Look at the 10 percent drop in revenue estimate. That seems to indicate S&P thinks GCI is going to make $170 million less next year. That is way too rosy a figure. Look at ads in the newspaper, and lost revenues is much more likely to be more than double that amount. I think S&P needs to a more radical decline in GCI revenues than it has.
ReplyDeleteYep. In 2-3 years time, people may conclude that losing the election was the best thing McCain did for himself.
ReplyDelete