Documents reveal double-digit profit margins at scores of papers now on verge of massive layoffs

We’ve always heard that Gannett newspapers racked up double-digit profit margins, even as bad times engulfed the industry. But I’ve never seen actual numbers until now, because Corporate keeps the performance of individual businesses a well-guarded secret.

I’ve recently had an opportunity to review margins for most of GCI’s U.S. newspapers as of a year ago (USA Today isn’t included). They’re disclosed in an internal report, the Cost & Statistical Summary, provided to me by a Gannett Blog reader; it covers the first three quarters (periods 1-9) of 2007. The reader asked to remain anonymous, citing possible repercussions if identified. The reader did not have more current data, for 2008. And the reader requested I not share copies of the report with anyone.

Green Bay: No. 1 at 42.5%
The numbers are startling — especially now, with Gannett poised to lay off perhaps thousands of newspaper workers next week in another bid to boost the company’s flagging stock. Every newspaper except Detroit’s was profitable a year ago — although some, just barely so.

The Green Bay Press-Gazette was the star. It had the single-highest profit margin: 42.5%. In other words, Green Bay kept 43 cents of every dollar it took in. The paper’s total ad revenue over the three quarters: $25 million. The report doesn’t disclose circulation revenue for any paper. Applied only to ad revenue, then, Green Bay made around $10.6 million during the period. (Will Green Bay lay off workers next week? We’ll find out.)

Now, some readers say these are, in fact, gross profit margins — that certain costs must still be subtracted before you can get to “net” earnings. That may be true, but the reports I’ve got just say “newspaper profit margin.” (See a screenshot of one report.)

The money-losing Detroit Free Press and the formerly Gannett-owned Detroit News are published by the GCI-controlled joint operating agency there. To be sure, several barely profitable papers may have dipped into the red since this report was published. The economy went over a cliff this year when the housing bubble collapsed, throwing the nation into recession. Yet, I imagine many of the papers listed below are still enjoying very healthy margins.

The Arizona Republic vies with USA Today as the company’s biggest revenue generator. (Since USAT isn’t included in these reports, the exact rankings remain unknown.) The Republic‘s margin was a solid 25.43%, on $319 million in total ad revenue during the three quarters.

Paper-by-paper: Margins, ad sales
Following is the performance of more than 80 U.S. newspapers over the first three quarters of last year, ending about Sept. 30. Gannett’s 17-daily U.K. Newsquest chain and the TV division aren’t included. Total ad sales are provided, but not circulation revenue. (However, circulation is a fraction of the newspaper division’s revenue: just 21% so far this year, says the third-quarter earnings report.)

Note that many newspapers are tiny revenue-generators. Also, names below are those listed in the report; some Wisconsin and Ohio papers are grouped together. To get a sense of an individual paper’s profit in dollars, multiply the margin against ad sales.

  • Alexandria, La.: 20.56% margin; $9.7 million in ad sales
  • Appleton, Wisc.: 32.47%; $22.2
  • Asbury Park, N.J.: 19.16%; $82.3
  • Asheville, N.C.: 23.49%; $20.6
  • Battle Creek, Mich.: 13.05%; $6.7
  • Binghamton, N.Y.: 32.64%; $18.1
  • Brevard, Fla.: 24.68%; $44.8
  • Bridgewater, N.J.: 10.04%; $13.3
  • Bucyrus, Ohio: 9.59%; $1.0
  • Burlington, Vt.: 36.21%; $21.3
  • Central Wisconsin: 24.25%; $16.2
  • Cherry Hill, N.J.: 9.83%; $40.7
  • Chillicothe, Ohio: 22.3%; $3.4
  • Cincinnati: 13.97%; $111.9
  • Clarksville, Tenn.: 26.01%; $8.9
  • Coshocton, Ohio: 4.67%; $0.9
  • Des Moines: 24.58%; $71.0
  • Detroit: negative 4.96%; $164.8
  • East Brunswick, N.J.: 16.07%; $19.6
  • East Wisconsin: 29.75%; $77.8
  • Elmira, N.Y.: 19.2%; $9.0
  • Fond du Lac, Wisc.: 8.02%; $3.0
  • Fort Collins, Colo.: 30.97%; $16.2
  • Fort Myers, Fla.: 29.99%; $66.3
  • Freemont, Ohio: 11.89%; $2.6
  • Great Falls, Mont.: 21.18%; $9.2
  • Green Bay, Wisc.: 42.5%; $25.0
  • Greenville, S.C.: 27.29%; $45.3
  • Guam: 40.39%; $11.2
  • Hattiesburg, Miss.: 16.44%; $7.3
  • Honolulu: 3.33%; $76.6
  • Indianapolis: 24.97%; $116.3
  • Iowa City, Iowa: 15.17%; $7.0
  • Ithaca, N.Y.: 16.01%; $5.8
  • Jackson, Miss.: 25.94%; $34.5
  • Jackson, Tenn.: 15.14%; $10.2
  • Lafayette, Ind.: 27.85%; $12.2
  • Lafayette, La.: 33.52%; $23.2
  • Lancaster, Ohio: 15.15%; $3.0
  • Lansing, Mich.: 23.22%; $26.7
  • Louisville: 19.33%; $78.5
  • Manitowoc, Wisc.: 21.12%; $4.7
  • Mansfield, Ohio: 31.39%; $8.3
  • Marion, Ohio: 26.04%; $3.0
  • Marshfield, Wisc.: 15.23%; $2.2
  • Monroe, La.: 15.09%; $10.6
  • Montgomery, Ala.: 27.83%; $22.1
  • Morristown, N.J.: 14.93%; $16.4
  • Mountain Home, Ark.: 20.25%; $3.1
  • Muncie, Ind.: 24.0%; $9.5
  • Nashville: 21.38%; $93.1
  • Newark, Ohio: 17.25%; $5.1
  • NNC Ohio: 22.09%; $37.0
  • Opelousas, La.: 33.0%; $2.6
  • Oshkosh, Wisc.: 31.15%; $6.8
  • Palm Springs, Calif.: 37.98%; $40.2
  • Pensacola, Fla.: 27.10%; $28.7
  • Phoenix: 25.43%; $319.2
  • Port Clinton, Ohio: 2.74%; $0.8
  • Port Huron, Mich.: 17.58%; $9.0
  • Poughkeepsie, N.Y.: 27.84%; $20.0
  • Reno: 34.90%; $42.8
  • Richmond, Ind.: 18.17%; $5.2
  • Rochester, N.Y.: 28.48%; $62.3
  • St. Cloud, Minn.: 28.16%; $17.2
  • St. George, Utah: 29.91%; $13.7
  • Salem, Ore.: 32.95%; $23.2
  • Salinas, Calif.: 7.44%; $8.2
  • Salisbury, Md.: 26.74%; $16.8
  • Sheboygan, Wisc.: 24.01%; $6.7
  • Shreveport, La.: 29.22%; $23.9
  • Sioux Falls, S.D.: 36.55%; $23.7
  • Springfield, Mo.: 37.50%; $28.8
  • Staunton, Va.: 25.56%; $5.4
  • Stevens Point, Wisc.: 19.81%; $2.4
  • Tallahassee: 25.55%; $24.3
  • Tucson-TNI: 28.26%; $67.7
  • Tulare, Calif.: 39.93%; $2.4
  • Vineland, N.J.: 19.15%; $7.1
  • Visalia, Calif.: 22.87%; $9.2
  • Wausau, Wis.: 32.11%; $8.7
  • Westchester, N.Y.: 14.84%; $79.1
  • Wilmington, Del.: 25.08%; $54.7
  • Wisconsin RAPI: 19.92%; $2.3
  • Zanesville, Ohio: 23.08% margin; $4.0 million in ad sales

Earlier: We’re building a paper-by-paper list of layoffs; just three papers are listed so far. Will yours be included when publishers disclose cuts next week?

Please post your thoughts in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

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