Surviving Down Markets and Getting Ready for the Next Upturn

1. Surviving Down Markets and Getting Ready for the Next Upturn By Seija Goldstein Seija Goldstein Associates, Inc. 630 Fifth Avenue, Suite 2109 New York, NY 10111 212-218-7519 seijag@aol.com Copyright 2008 Seija Goldstein Associates, Inc. All Rights Reserved

2. Publishing Is Cyclical • There have been two major down market in the last 20 years: • From about 1988 to 1992 • From 2001 to 2002 • Another down cycle started in 2007 for many publishing categories Copyright 2001-2008 Seija Goldstein Associates, Inc. All Rights Reserved

3. A Little Historical Perspective • Alternative weeklies as a group survived the late 80’s media recession relatively unscathed: - The introduction of Audiotext in May 1989 helped counter ad declines - Many alternatives were early in their life cycle with much advertising potential still untapped • The 2001-2002 did not hit alternative weeklies too badly, either • After about -5% dip in 2001, they turned back up in 2002 REMEMBER WHAT WORKED DURING PAST DOWNTURNS! Copyright 2001-2008 Seija Goldstein Associates, Inc. All Rights Reserved

4. Common Sense Survival Strategies • Budget realistically • Continuously monitor your revenues • Cash is King -don’t get caught in a cash crunch • Create a climate of cost awareness • Maintain competitiveness for the next upturn Copyright 2001-2008 Seija Goldstein Associates, Inc. All Rights Reserved

5. Budget Realistically • No blue sky revenues. • Target cost levels that protect bottom line, even if revenues are flat or down. • Know your break even ad page level • Use your budget program to run “what if” projections to see what happens at different ad page levels Copyright 2001-2008 Seija Goldstein Associates, Inc. All Rights Reserved

6. Continuously Monitor Revenues and Expenses • Establish procedures to project likely ad revenues several months out. • Make a mid-year forecast, even if you are on budget right now • React quickly on the cost side to unfavorable revenue changes. • Know where your market is headed: • Watch for early warning signs: • Empty parking lots at stores • Out of business signs • More stores for rent Copyright 2001-2008 Seija Goldstein Associates, Inc. All Rights Reserved

7. Don’t Get Caught in a Cash Crunch • Establish a line of credit now, even if you think you’ll never need one • Monitor receivables closely; be strict about cutting off bad pays; make collections a top priority • Establish firm timing for payables • If you have excess cash, use some to get better discounts and prices Copyright 2001-2008 Seija Goldstein Associates, Inc. All Rights Reserved

8. Create a Climate Of Cost Awareness • Reduce your “fixed nut” and negotiate better terms with all vendors • Small savings in many areas add up; review your distribution, sub-meter your electric, control your telephone, messenger, etc. • Reduce perks, starting at the top • Buy equipment for functionality, not state-of- the-art, or defer purchasing altogether • Reward staff for money saving ideas Copyright 2001-2008 Seija Goldstein Associates, Inc. All Rights Reserved

9. Maintain Competitiveness for the Next Upturn • Identify your key competitive strengths and minimize cuts in those areas. • As long as cash flow allows, keep testing new ideas and revenue opportunities; be ready to roll out when the market conditions turn up again • Pay attention to staff morale; if you ask them to share the bad times, be also willing to share the good times when the next upturn comes Copyright 2001-2008 Seija Goldstein Associates, Inc. All Rights Reserved