Dump that newspaper stock

If you haven't already, that is. Goldman Sachs has issued a statement warning that the next few years could be very ugly for the newspaper biz:

"The magnitude of the recent declines is extraordinary for a non-recession period and provides concrete evidence, in our view, that the share shift from print to online in the publishing industry is accelerating."

Some companies are more at risk than others. Goldman cut its rating on McClatchy from "neutral" to "sell" and reinstated a rating on The New York Times Co. to "sell."

The news got worse for NYT Company a few days later when Standard & Poors lowered their bond rating to BBB, which is perilously close to junk.

S&P said it ``expects revenue declines to continue over the next couple of years'' and that New York Times ratings may be lowered again ``if trends related to print advertising remain in line with what was reported in the past few months.''

Going back to the Goldman Sachs article, there is some good news in it. After noting that things are going to be really, really grim for the next five years as the industry transitions from print to on-line ("the transition period from print to online will be 'painful' and 'extended'"), they are relatively bullish in the long-term:

"Ultimately, we believe newspaper publishers will re-emerge as very healthy and dominant players in the local media marketplace."

So now all the newspapers have to do is figure out how to stay alive for five years.