How Phoenix is dragging down Gannett revenue

The Arizona Republic was one of the company’s biggest revenue and profit gainers, as the state’s especially frothy housing boom drove millions of dollars in new advertising to the Phoenix paper — until the bubble collapsed last year.

The Republic‘s total ad sales rose to $498.1 million in 2006, up 7% from $467.1 million in 2005, internal Gannett documents show. As a result, the paper’s share of all company newspaper ad sales grew to 9.3%. And its profit margin stood at 29.76% at the end of 2006.

But through the first three quarters of last year, Republic ad sales fell 13%, to $319.2 million vs. $367.6 million during the same period the year before, the documents show. Meanwhile, the paper’s profit margin dived to 25.43%.

I don’t have current data for 2008. We know, however, that the Republic was hit even harder this year as the real estate bust intensified — joining papers in Florida, California and Nevada, now pulling down Gannett’s overall revenue and earnings.

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[Image: yesterday’s front page, Newseum]

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