Archive for September, 2007

Salem publisher ‘outraged’ over coverage

September 26, 2007

The Statesman Journal‘s Brian Priester publicly dressed down his own newsroom for not covering this past weekend’s Salem Riverfest. He says a story about the event should have been on Page One. “I am embarrassed and outraged by our lack of coverage, as I’m sure many of you are as well,” Priester wrote in a letter to readers.

The newsroom’s response? It swung back with a story today about all the festival-related noise complaints. Hah! I’d say Priester’s outrage would carry more weight if he’d actually attended the event. Can anyone cite other examples of publishers going this far? Comment, below, please.

Shares trade at new low

September 25, 2007

GCI has traded as low as $43.64 a share this morning, a new 52-week low. That eclipsed the previous low, $43.79 — set on Aug. 10, when CEO Craig Dubow knocked down speculation the company was preparing to be sold.

Correction: Online sales growth much lower

September 24, 2007

Gannett’s U.S. newspapers had 12% online sales gains in each of the first two quarters of this year, according to the company’s Securities and Exchange Commission filings. In an earlier post — which I’ve since taken down — I wrote that the gain was much higher: 48% in August vs. August 2006.

(Blogger Alan Mutter and I made the same mistake, relying on a not terribly clear monthly statistical report that actually referred only to the performance of Gannett’s broadcast division.)

The correct growth rate — 12% — is, in fact, terrible. Across the industry, growth has been averaging a much higher 20.8% during the first half of this year, and even that’s a rate that’s been slowing. So, Gannett’s performance is lagging an already troubling trend.

Sorry for any confusion.

Update: Gannett still lags under Dubow

September 22, 2007

Gannett’s poor stock performance under CEO Craig Dubow offers a glimpse at some of the pressures now bearing on senior management. GCI is down 37% in the more than two years since Dubow became CEO. That’s a bigger loss than any other major newspaper stock but McClatchy, which continues to suffer after its poorly-timed purchase of most of Knight Ridder. (These percentages are rounded; carried out to several more decimal places, you’d see the New York Times Co.’s shares turned in a tiny bit better performance during the period.)

Dow Jones shares are still No. 1, after DJ reached agreement to be bought for $5 billion by Rupert Murdoch’s News Corp. And News Corp. shares are doing well because of its greater diversification into non-print properties, especially its canny purchase of the social-networking site MySpace. (An interesting footnote: News Corp. bought MySpace the same month Dubow took over GCI.)

For this analysis, I’m using Google Finance’s database, which I guess explains the different closing prices I found the last time I examined these figures. I’ve also added a few more stocks to this analysis. As before, I’ve also thrown in the change in the S&P-500 Index for an overall market barometer. In any case, the trend remains the same: Whether by bad timing or bad management, Dubow’s team has done little to make shareholders happy. Unless, of course, I’m missing something here. Anyone with a better head for numbers want to comment?

Incredible shrinking papers to shrink again

September 21, 2007

After completing a conversion of its 85 daily papers to 48-inch web size from 52 inches, Gannett is conducting a national review for a possible second cut to a 44-inch web, Editor & Publisher is now reporting. Austin Ryan, Gannett’s vice president over production, said the smaller size may be introduced in larger markets; he noted that The Indianapolis Star and The Courier-Journal in Louisville, Ky. are among the most likely candidates. “If they convert, it would be the first half of next year,” he said of the bigger papers.

One year later, how’s it going?

September 20, 2007

Sue Clark-Johnson’s recent speech reminds us that it’s been a year since Gannett’s publishers and editors were summoned to corporate headquarters (above) for what amounted to a come-to-Jesus meeting. They were told to start reorganizing their newsrooms around the newly created “seven desks” model, one they were told had been tested with promising results at a relative handful of Gannett papers. (Weeks later, CEO Craig Dubow made details of the plan public in this memo.)

So, how do things look a year later? Not so good:

  • Stock. Gannett shares have fallen 19% at a time when the S&P-500 Index, which measures the broader stock market, climbed 14.6%.
  • Revenue. Wall Street analysts expect GCI to report $1.82 billion in sales for the current quarter when it releases earnings Oct. 17. That’s 5.1% less than the comparable quarter last year. Analysts are even more pessimistic about the fourth quarter: They forecast $2.01 billion in revenue, down 8.9% from last year.
  • Earnings. Analysts expect earnings-per-share (EPS) of 99 cents for the current quarter — nearly 11% less than a year ago. For the fourth quarter, they expect EPS of $1.30, down nearly 14% from last year.

As always, I welcome your comments.

Monthly stats: Not as bad as I feared

September 18, 2007

The housing meltdown continued to pummell Gannett in August, the company said yesterday in its monthly statistical report. Newspaper advertising revenue fell 6% from August 2006 — a slight improvement over July’s loss.

I’m slightly encouraged: I had feared that August’s drop would be much worse, given accelerating troubles in the real estate market. The decline was led by a 9.5% drop in classified ad revenue, with real estate ads down 15.5%; employment down 11.9%, and auto off 10.5%. Worrisome, though, is that real estate and employment fared worse than in July’s report. Classified continues to feel the heat from Craigslist, Monster and others.

USA Today bounced back during August, GCI said, posting a 6.9% jump in ad revenues — a big improvement over the previous month’s performance. Still, as the chart (above) reflects, USA Today‘s revenue has been very choppy so far this year. The chart shows the change in newspaper advertising revenue from the year-ago period, based on GCI’s monthly statistical reports. As always, I’m breaking out USA Today‘s figures because it’s the only paper for which GCI gives specific data.

GCI released August’s data after stock markets had closed. This morning, investors’ response so far is fairly muted: Shares are down only a bit.

How the USA Today analogy falls apart

September 16, 2007

Craig Dubow likens Gannett’s unsettling “transformation,” now underway, to the birth, 25 years ago, of what is now the company’s flagship newspaper. “USA Today did not happen easily or without pain,” Gannett’s CEO wrote last week. “It was not conceived, launched and accepted by customers in a fluid, easy progression. No one involved at the beginning knew for sure what it would be in the end. In fact, USA Today is still changing and, hopefully, always will. That is what innovation and transformation are all about: vision, hope, execution, pain, confusion, fear, failure, revision, excitement and then — only then — success.”

I’d add one more crucial element of innovation Dubow didn’t mention: A sustained net commitment of capital. Even with all the employees borrowed from other company newspapers during USA Today‘s start-up, Gannett also invested tens of millions of dollars over years and years before the newspaper was deemed a success.

So: Can the current transformation succeed when we’re relying solely on existing resources — or worse, as it appears, when we’re trimming expenses (read: employees) to shore up the company’s stock price? Can we truly say we’re committed to transformation when we insist on keeping those legendary 25% profit margins?

What do you think? I welcome your thoughts in the comments section, below.

[Image: That’s the front page of USA Today‘s debut issue, Sept. 15, 1982]

Top execs on USA Today’s 25th anniversary

September 15, 2007

They include top Editor Ken Paulson, co-founder Al Neutharth and Publisher Craig Moon.

Gannett stock: It happened this week

September 15, 2007

Click on this chart to make it bigger. Gannett shares (blue line) closed Friday at $44.74, down 4.3% from the week-before close. That compares with a 2% gain in the S&P-500 Index (red), which measures the broader market. Gannett’s closing price was the lowest since May 2, 1997, when shares closed at a split-adjusted $43.88, says Forbes magazine, which notes it was a bad week all the way around for newspaper stocks. “Nothing particularly new is moving the stocks — it’s just the same old, same old,” writes columnist Louis Hau. “Monthly advertising numbers for July and August showed further declines, giving investors another excuse to lose shares they weren’t terribly excited to hold in the first place.”