How long will Gannett’s biggest stockholders wait?

GCI’s two top shareholders are Brandes Investment Partners and AXA Financialinstitutional investors that have poured hundreds of millions of dollars into the company over the past year, a time when shares have plunged.

Brandes owns 11% of all the stock, regulatory filings show. AXA, which recently doubled its stake, owns 10%. Combined, that’s more than the stake Private Capital Management built up in Knight Ridder, just before activist investor Bruce Sherman forced that chain to the auction block, in 2006.

Gannett’s top management ought to be especially worried about Brandes. The money manager based in San Diego, Calif., owns about 26 million shares — seven million more than a year ago, when the stock was at $54. Shares closed yesterday at $22.37. On paper, Brandes alone is now at least $633 million in the hole.

Just how long can CEO Craig Dubow and Chief Financial Officer Gracia Martore keep Brandes and AXA at bay?

Your thoughts, in the comments section, below. To e-mail confidentially, use this link from a non-work computer; see Tipsters Anonymous Policy in the green sidebar, upper right.


13 Responses to “How long will Gannett’s biggest stockholders wait?”

  1. credit savvy Says:

    it will be very hard to call that

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  2. Anonymous Says:

    The problem isn’t with Dubow’s plan. His plan is brilliant. The problem is that the execution is flawed. Many of the people who were tasked with implementing the plan were the same folks who were aware that future problems were looming with this industry years ago and most chose to ignore the speculation way back then. In many cases, those same folks are still sitting on Gannett Operating Committees. In general, many of these folks should be purged. They didn’t understand what innovation meant 20 years ago and they still don’t get it. Age has nothing to do with it, either. People who have an innovative spirit will always have an innovative spirit regardless of whether they are 20 or 90. It’s time for Innovation 2.0. Heck, at this point I’d even settle for the beta version!

  3. Anonymous Says:

    It’s time for Gannett to split into Broadcast and Print Divisions. Of the two, Broadcast will thrive and Print can shrink to a sustainable model.

    The current system of punishing the Broadcast and Digital side of the company for the mistakes of the Print side just plain sucks….

  4. Anonymous Says:

    Anonymous 4:232, that’s BS!

    Newpaper revenues 2007: 1.2 billion

    Broadcast 183 million.

    Dubow and Co would like everyone to believe that print is dead. Hell, the way they’re running this company it will be soon!

  5. Anonymous Says:

    Dubow bears the ultimate responsibility if he cannot implement his plan. How can a CEO have a ‘brilliant’ plan and it not be executed. That says a lot about the quality of his “team” and the generational depth of the problem.

  6. Anonymous Says:

    Dubow’s plan is “brilliant” Anon @ 4:02?

    I wouldn’t go that far. Pieces of it had merit. And, you are correct, not all the blame can be heaped on Craig. Gracia, Jack Williams, et al certainly had their hand in its failure (from a revenue perspective).

    But an industry transformation this vast requires additional people, capital and resources – not reductions – to execute successfully and Craig and Gracia were too afraid of Wall Street to make that commitment.

    And what did their fear buy them? Nothing. So they might as well have invested in the company and experienced true transformation instead of foundering by following established management practices.

    Now … well, it’s too late. Too much talent has left the company never to return. And those left are too overworked to (excuse the cliche) “move the needle” because they can barely get out existing product(s).

    There were many failures: Advertising’s failure to leverage the internet and sacrifice price for volume (traffic); I.T’s failure to junk Genesys (G2) years ago; the appointment of Jack Williams to run Digital; the failure to support Circulation so it could afford competent delivery (sorry, distribution) and customer service personnel; and so on and so on …

    Craig doesn’t deserve all of the blame, you’re right. But he’s the one who has been charged with running this company for some time now and, well, the results are ugly. There isn’t a publisher in the company that would still have a job with his performance numbers, so it’s time to make a change. And no Golden Parachute, please. He didn’t earn one.

    Plus, it would be an insult to every front-line employee who continues to pour their heart and soul into the company, only to be rewarded with an annual 1% raise and higher insurance costs. God bless all of you who remain. You’ve earned and deserve the respect of those of us who have left – and every executive in the company.

  7. Anonymous Says:

    in case you haven’t noticed, dubow keeps getting raises like it’s 1999.

    and the retirement numbers for us peons (or is that peed-ons?) project 3% raises. riiiiiiiight. the only 3% raise i’ve seen since gannett took us over was a 3% increase in my workload. a 3% increase almost every damn month, that is.

    as for this:
    “God bless all of you who remain. You’ve earned and deserve the respect of those of us who have left – and every executive in the company.”

    thank you for the kind words. you’re right, of course, but the only thing gannett execs respect is the bottom line, not the dedicated, hardworking people whose work pays their country club dues, deluxe health insurance and other perks.

  8. Anonymous Says:

    Print is NOT dead. Print can thrive, it just needs to be free. Newspapers are risking 75% of their revenues (advertising) by protecting 20% (circulation). Newspapers could actually make more money by going free, by controlling the number of papers that hit the streets. You actually wouldn’t lose 20% since you would offset a good portion of the revenue loss with expense savings. You don’t need District Managers, Circulation phone rooms, etc…
    By controlling the number of papers going out, you could actually get more preprints which would increase revenue. Print isn’t dead. People just don’t need to pay for their news anymore so go ahead and give it to them.

  9. Anonymous Says:

    “God bless all of you who remain. You’ve earned and deserve the respect of those of us who have left – and every executive in the company.”

    For the most part this is true, but there is still about 30% dead weight that remains at my paper. Everyone on this blog calls out management but forgets to single out the employees who only survive by butt kissing management. They are usually not hard working employees and lack talent. Having to work with these people make the uncertain times more frustrating.

  10. Anonymous Says:

    Anon @ 12:13 …

    The “dead weight” you reference, have they always been dead weight or did they “jump the shark” at some point? If the latter, what was the impetus? What can be done to get them to “jump back” so to speak? Or is it hopeless with those employees? Finally, is the “dead weight” amenable to buyouts? If so, they should be approached first.

  11. Anonymous Says:

    I’m one of the luckier ones, I guess – I have gotten a 3% raise every year I’ve been with the company. But so does everyone else. It doesn’t matter how hard you’ve worked, or in some cases whether you’ve done much work at all. Those who have busted their backsides to make sure the paper gets out, on time, and high-quality, do not get rewarded for it. These are people that are not simply content to punch their timecards, but that take pride in the product they put out. These are the people you want to keep, but these are also the people who leave as soon as they can, often being satisfied with a lateral move instead of a move up. They see that their hard work will not get them anything for the future.

    But that 3% has been gone almost every year before it arrives, with the health premiums going up, up and up. That’s before you factor in the cost of living. Gas is painfully up. Groceries are way up. Everything is going up. I am noticing that financially, I am far behind where I was a few years ago. So I am keeping my eyes open for a new job, and I’ll be out of Gannett as soon as I can find one. I have worked hard to produce quality work, and the company has not given me any reason to stay. I also know that I’m not the only one. Some of my co-workers have already left. Others are openly mulling other career options. There’s also the fear that those who don’t leave on their own will see their jobs outsourced. As it is already, positions that become vacant are not being filled. Of course, this means that the remaining employees are seeing their workload go way up.

    Flat pay, lack of job security, overworked employees, and the constant droning by corporate about the “challenging business environment” is destroying morale and quality. Hardly the way to set up for the future.

  12. Anonymous Says:

    anon @ 5:11

    I note the only department you dont assign any blame to is the Newsroom (or Info center now)? Curious – Advertising is to blame for not ‘leveraging’ the power of the internet. I dont suppose you’ve actually tried to sell While we congratulate ourselves on our online growth, we’ve been outpaced by virtually (pardon the pun) every competitor. Our pageviews have been outstripped, we have no self service options, and our product lines have constantly lagged behind the market.

    Last, but certainly not least, your note implies that the model should have traded ‘price for volume’ – simply ignoring the fact that we’ve never had enough volume to migrate current print revenue online.

    This blog has descended into a forum for whiners – looking to point the blame at someone else – other departments, executives, divisions. It’s a shame – this could be an interesting forum for candid discussion

  13. Anonymous Says:

    anon @ 5:11

    I agree with what you said. I also think a fish rots at the head.

    A CEOs job is to make sure a brilliant plan is developed and then put the right people in place to execute. Obviously, the right people aren’t in place if there really was such a plan. Add to that Gannett’s consistant focus on cutting costs rather than investing in development and, well, here we are.

    Cutting doesn’t equal growth unless you reinvest some of what you’ve cut.

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