This level of debt increases the Company’s vulnerability to general adverse economic and industry conditions. Higher leverage ratios could affect the Company’s future ability to refinance maturing debt or the ultimate structure of such refinancing. In addition, the Company’s credit ratings could affect its ability to refinance its debt.The dismal state of McClatchy's business operations at the Star and its other newspapers, except, of course, for digital advertising, which is up slightly, is spelled out in the following segment of the report:
Retail advertising revenues decreased $13.3 million, or 5.7%, from the first six months of 2012, largely reflecting the factors discussed in the quarterly results above. Print ROP advertising revenues decreased $7.8 million, or 7.8%, from the first six months of 2011 and preprint advertising revenues decreased $9.0 million, or 9.0%, from the first six months of 2011. Digital retail advertising revenues grew $3.4 million, or 9.6%, from the first six months of 2011 driven by increased banner and display advertisements and strong results from the Company’s dealsaver® group buying service.National advertising revenues decreased $6.3 million, or 17.2%, from the first six months of 2011. The declines in total national advertising were primarily in the telecommunications segment. Print national advertising decreased $4.8 million, or 17.9%, while digital national advertising revenues decreased $1.5 million, or 15.5%, from the first six months of 2011.Classified advertising revenues decreased $10.1 million, or 7.7%, from the first six months of 2011 and were impacted generally by the same factors discussed in the quarterly results above. Print classified advertising revenues declined $11.7 million, or 14.1%, while digital classified advertising revenues grew $1.6 million, or 3.4%, from the first six months of 2011. The following is a discussion of the major classified advertising categories for the first six months of 2012 compared to the same period in 2011:
• Automotive advertising revenues decreased $0.2 million, or 0.5%, from the first six months of 2011 reflecting issues discussed in the quarterly results above. Print automotive advertising declined 12.1%, while digital advertising revenues grew 13.6%.
• Employment advertising revenues decreased $2.5 million, or 9.3%, from the first six months of 2011 reflecting a national slowdown in hiring. The six-month declines were reflected both in print employment advertising revenues, down 12.5%, and digital employment advertising revenues, down 6.3%.
• Real estate advertising revenues decreased $4.4 million, or 18.7%, from the first six months of 2011 reflecting the nationwide slowdown in home sales. In total, print real estate advertising revenues declined 24.1% while digital real estate advertising revenues increased 6.7%.
Other classified advertising revenues were down $2.9 million, or 7.6%, in the first six months of 2012 compared to the first six months of 2011. Print other classified advertising revenues decreased 11.0% while digital other classified advertising revenues increased 6.7%.