Archive for the ‘Board of directors’ Category

GCI shares plunge; NYT slashes dividend 74%

November 20, 2008

Gannett’s stock dived again today, closing at $6.09 a share, down 72 cents, or 11% — the second consecutive day of steep losses. That boosted the stock’s dividend yield further into nosebleed territory: 26%.

Meanwhile, the New York Times Co. announced late today that it’s slashing its dividend — and its yield had only reached 16%. That’s likely going to put more pressure on Gannett’s board of directors to rethink GCI’s dividend payout.

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How getting to know each other improves relations

November 5, 2008

Those of you familiar with the secret world of Gannett Blog know I have back-channel communications with company officers, rank-and-file workers and the occasional member (you know who you are!) of the board of directors.

Now, here’s a lesson that goes back to my days as a beat reporter. It’s a lot harder to slam the Daily Bugle when you’re in occasional off-the-record correspondence with its publisher, ad director or editor. That doesn’t mean I won’t call the Bugle on a screw-up. But knowing managers as human beings — rather than just names — makes me think twice before I hit the “publish post” button.

With that in mind, drop me a line — confidentially, of course, via gannettblog[at]gmail[dot-com]. See Tipsters Anonymous Policy in the green sidebar, upper right.

Board elects two new directors, OK’s dividend

October 30, 2008

My quick take on twin announcements yesterday by the board of directors, now that I’ve just arrived on the East Coast after a day of cross-country travel; I’ll try to come back with more later today.

Two new directors
In electing Howard Elias and Scott McCune, the board is adding two men with expertise in technology and marketing, areas where Gannett sure could use some help. Elias is an executive vice president at EMC Corp., a giant hardware and software maker. McCune is a vice president at beverage giant Coca-Cola Co. (McCune apparently is taking the seat left vacant last spring after Coke executive and GCI director Charles Fruit died.)

I’m a little surprised that Chairman and CEO Craig Dubow (left) would want to bring two new players on the board when there’s already so much upheaval in the company. But maybe that’s the point: He wanted more advice. Or, perhaps Dubow agreed to expand the board at the request of other directors.

In any case, the board has now grown to 10 members.

(Corporate governance 101: a company’s board of directors looks out for the interests of shareholders by hiring and supervising key executives, starting with the chief executive officer. Directors also review and approve major business deals, and other strategic initiatives.)

Dividend payout
The board approved payment of another 40-cent dividend — punting, apparently, any decision about reducing the payout until a later time. Chief Financial Officer Gracia Martore suggested strongly last week that the dividend might be cut when the board met this week. Whether directors gave that serious consideration is unclear.

Speculation about a dividend cut focused on Gannett’s unusually rich yield: nearly 15%. Investors were clearly happy with today’s news: GCI’s stock closed at $10.76 today, up 82 cents, or 8.3%.

Please post your replies 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.

Program note: I’m offline most of Thursday

October 29, 2008

That means I may not be around if, say, the board of directors cuts the dividend — a step Chief Financial Officer Gracia Martore hinted might happen this week. Now, if the board does slash the payout, please post relevant text from any announcements — plus your insightful comments, in today’s Real Time Comments open forum.

Breaking: Gannett’s third-quarter profits dive 32%; ad revenue slide worsens; dividend remains safe

October 24, 2008

Gannett said third-quarter earnings plunged 32% on a worsening decline in newspaper advertising sales, spurring more job cuts by year’s end — and encouraging the once-unthinkable: slashing the company’s unusually generous dividend.

The results were largely in line with Wall Street’s expectations. But CEO Craig Dubow and other top executives failed to rally influential Wall Street stock analysts during an occasionally contentious teleconference on the quarterly results.

Chief Financial Officer Gracia Martore (left) ruled out an immediate dividend cut. But she said management and the board of directors continue to study how best to allocate capital. She said directors are scheduled to meet next week, although she didn’t disclose their agenda. “We’ll continue to discuss it with the board,” Martore said.

She also indicated severance expenses would rise in the current quarter — reflecting Dubow’s warning last week that more layoffs are in the works. Martore didn’t offer any details, however, including any target for job cuts, or a timetable.

Some analysts were unhappy with Gannett’s disclosure today that it had stopped reporting revenue through the familiar monthly statistical reports. They also questioned GCI’s failure to more aggressively buy back shares, now down 78% from a year ago. (Conference transcript.)

Gannett Blog reader reaction came fast. “I love it,” one said. “A newspaper-media company withholding news. In the conference call, they disclosed they will no longer publish the monthly ad revenue figures, but will only put them out quarterly. Stock analysts didn’t like this . . . and Corporate had some lame response about monthly not fully counting digital revenues, etc. The other ominous thing I got out of the conference call was that Corporate has no interest at buying back GCI stock, even at this low level.”

Ad revenue collapse accelerates
For the quarter, Gannett reported net income of $158 million, or 69 cents a share, on revenue of $1.64 billion — down from $234 million, or $1.01 per share, a year before.

Revenue exceeded the $1.61 billion forecast by analysts, but was nonetheless 9% lower than a year ago. Excluding severance costs for a big newspaper division layoff in August, Gannett would have earned 76 cents a share, a penny above what analysts expected.

Newspaper ad revenue plunged about 18% from last year’s third quarter — the steepest year-over-year decline since revenue began falling early last year. The revised newspaper division ad revenue trend:

Flagship USA Today‘s ad sales fell 7.1% in the third quarter vs. a year ago, the company said. Paid ad pages totaled 713 vs. 803 last year.

Stock closes down
Gannett
shares closed at $9.47, down about 2%, after recovering from an earlier low of $8.61. Still, GCI’s dividend yield has soared to nearly 17%, spurring speculation that the company would move today to cut the payout — a step considered by industry rivals. In its third-quarter earnings report yesterday, the New York Times Co. said it was considering a reduction in its dividend.

Please post your replies 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.

[Image: today’s USAT front page, Newseum]

GCI’s board of directors in likely meeting today

October 22, 2008

Gannett is scheduled to disclose third-quarter earnings on Friday morning, which points to a likely two-day meeting of the board of directors, starting today. Directors convene at least quarterly to consider big company announcements, including earnings and other strategic changes.

Corporate and USA Today staff in McLean, Va.: Are you seeing any limousines, “black cars,” chauffeurs, or other signs of the directors being afoot — like last time?

Please post replies in the comments section, below. E-mail confidentially via gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

[Photo: Mercedes Benz 600 Pullman, by Flickr member Nickphotos]

Tickler file: Budget cuts? A looming board meeting

October 15, 2008

With Gannett shares screaming lower, and the third-quarter earnings release coming up next Friday, here’s what I’m watching right now. In the newsroom, this would be part of my tickler file:

Budget revisions. We’ve got fresh speculation that Corporate is looking for even bigger spending cuts in the newspaper division — 7.5% or more. What’s that mean for another round of job cuts? Is the deadline timed to next week’s expected board of directors meeting?

Louisville this Friday. CEO Craig Dubow and newspaper division President Bob Dickey have chosen a momentous time for a meet-and-greet with Courier-Journal employees. “Considering the environment these days, it should be an interesting meeting,” a reader said here.

Next Wednesday. That’s when the board of directors will probably start its pre-earnings meetings; these often last two days. If Chairman Dubow has any big strategic changes for fellow directors to approve, he’s now got less than seven days to build those PowerPoint presentations. “Any sweeping management plan has to be put to the board of directors for review and approval,” a reader noted here.

Caution ahead!
Rumor Central is going into overdrive again, so be skeptical about any budget cut numbers or other financial data you see posted in comments here — unless the commenter gives a legitimate source.

“Who knows what will happen?” one reader said earlier today. “Maybe there will be even worse cuts. Maybe far less. But to go kneejerk everytime someone posts something is to show no understanding for how things actually work.”

What else should be on my radar screen? Please post your replies 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.

[Photo: that’s me, watching CNBC moments ago; picture taken with my MacBook Pro]

Alliance now top GCI holder — but by how much?

October 10, 2008

Professional money manager AllianceBernstein has apparently boosted its ownership in Gannett again — making it GCI’s single-biggest stockholder. That’s pushed another money manager, Brandes Investment Partners, to second place, according to the most recent data, as of June 30.

But when I compared two major investor websites today, I got different totals for Alliance. One was a full 2.4 million shares higher. (The Brandes data were consistent.) The figures should be identical because, in theory, all data come from the same regulatory documents filed with the U.S. Securities and Exchange Commission.

My review came on a day when Gannett’s stock was falling again: It traded as low as $11.92 a share this morning, before rebounding on another day of volatility on stock markets overall.

CEO Dubow’s real bosses
Alliance and other “institutional” investors control publicly traded companies like Gannett. For example, the combined holdings of Alliance and Brandes total as much as 24.3% of GCI’s shares.

So, CEO Craig Dubow (left) really answers to big stockholders — not individual shareholders like you and me. On paper, Alliance and Brandes have lost hundreds of millions of dollars on their Gannett stock over the past year. That’s reason enough to put enormous pressure on Dubow to bring about faster change that might boost the company’s stock price.

Alliance and Brandes have limited options, however. They can’t force Dubow to sell off newspapers, because there’s virtually no market: buyers are worried about getting burned. And financing’s dried up in the banking crisis. But they could demand more cost-cutting including layoffs, since labor is one of the few expenses Dubow still controls. Plus, Alliance and Brandes could insist the dividend — a huge source of their income — be held steady, and not cut. But with the yield rising to a sky-high 12.4% today, Dubow’s got to consider a cut.

Alliance and Brandes will be among the big shareholders most interested in Gannett’s third-quarter revenue and earnings announcement, scheduled for Oct. 24. Anonymous@10:20 a.m., who posted some of the raw data here, wrote: “Would be interested to know what communications are currently going on back and forth between GCI’s board of directors and the major institutional holders. This would include the dividend and seats on the board.”

Alliance — also known as AXA — emerged as a big shareholder in February, three months after Brandes disclosed its big stake. Brandes owns 25,286,634, or 11.1% of all shares, as of June 30, both Yahoo Finance and MSN Money say.

What’s the real number?
Here’s the conflicting Alliance ownership data I mentioned earlier; I can’t find the original documents in the SEC’s database. Can any Gannett Blog readers find them for us?

Yahoo Finance: 30,194,099, or 13.2% of all Gannett shares
MSN Money: 27,828,124, or 12.2% of all

Please post your replies 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.

Monday Recap: Special Unsinkable Dubow Edition!

August 25, 2008

[The band plays on: Shares have plunged since Dubow became CEO]

With so many new readers, here’s a chronology showing all the fun we’ve had since Craig Dubow became CEO three years ago.

2005
May 25: Waking briefly from a deep slumber, the board of directors discovers the Internets, and concludes that Gannett is going to hell in a hand basket. Reportedly turned down by its first two outside candidates, the board settles on No. 3: Dubow (left), head of the TV division. Gannett stock closes: $75.31 a share.

2006
Nov. 2: Dubow reveals a major part of his strategic plan to save the company: Reorganize GCI’s newspaper newsrooms around the newly created Information Center model. “This looks an awful lot like rearranging the deck chairs on the Titanic,” writes a certain blogger, who’s privately tracking Gannett. Stock closes: $58.25.

Dec. 29: In one of the first labor-management skirmishes over the Information Center idea, top executives at The Indianapolis Star (left) back down over demands that newsroom employees write advertorials.

2007
March 16: Shares tumble more than 4%, to $55.76, as GCI warns profits will sink. A Morgan Stanley stock analyst says: “Revenues look to be far from reaching some sort of a trough, and until we see some indication of stabilization, we would steer clear from owning the shares.”

July 24: The board approves a 29% hike in the quarterly dividend, the single-biggest increase since 1995. Summering in the Hamptons, Wall Street is unimpressed. Meanwhile, the bubbling U.S. mortgage crisis grows worse and — unknown to most employees — begins to emerge as the biggest threat to Gannett’s future.

Aug. 10: Dubow denies a Wall Street Journal report that says top management is preparing GCI for a sale. Stock closes: $47.37.

Sept. 11: In an alarming memo, Dubow warns that progress is coming too slowly, and hints at a big downsizing: “This is the hard part. This is where transformation gets really difficult. I want to begin talking with you more about this process and what it means. I can’t take away all the pain and doubt, but I can help lead you through it.” Also, Gannett Blog emerges from stealth mode, appearing in public for the first time.

Oct. 24: Former NBC News president Neal Shapiro named to the board of directors.

Nov. 8: Private investment company Brandes Investment Partners doubles its GCI ownership, for the first time claiming an 11% stake. Gannett Blog traffic surges. Stock closes: $40.44.

Dec. 7: In a dramatic downsizing, USA Today buys out 43 newsroom employees, nearly 9% of all — losing some of the No. 1 circulation newspaper’s high-profile staffers. (Those outmoded digital dinosaurs included a guy with an idea for blog. Oops!)

2008
Jan. 10: One of the company’s most powerful executives, newspaper division chief Sue Clark-Johnson, announces plans to retire; she’s later replaced by Phoenix GCI executive Bob Dickey (left). The next day, former USA Today reporter and editor Jim Hopkins reveals he has been the anonymous editor of the nascent Gannett Blog.

Feb. 15: The Poopgate scandal grabs headlines, as Courier-Post employees in Cherry Hill, N.J., threaten a U.S. Labor Department complaint if they don’t get paid for overtime they have worked.

Feb. 28: The 2007 Annual Report reveals that GCI’s workforce plunged 7% in the previous year, to 46,100. Looking ahead to 2008, Dubow promises: “I assure you, you will see progress.” Stock closes: $30.23.

March 13: Gannett discloses that Dubow was paid $7.5 million in 2007, including a $1.75 million bonus. Employees are outraged: “Gannett stock plummeted almost $50 a share inside of a year and he gets a $1.75 million bonus? And reporters and editors are making due with less staff, less resources — I’m beyond shocked,” one says. Stock closes: $29.97.

March 26: Public documents reveal the company’s charitable arm, the Gannett Foundation, has quietly allowed Dubow and other top executives to steer nearly $424,000 to their pet charities — far from communities where the company does business.

May 29: Squeezing employees more, Gannett lays off 55 workers at the Asbury Park Press and three other N.J. newspapers.

June 9: The financial picture worsens: GCI writes off nearly $3 billion of its assets.

June 11: Gannett freezes its retirement plan. Furious employees heap blame on Dubow: “Kiss my ass,” says one worker. Stock closes: $25.99.

June 27: The Friday Afternoon Massacre reorders the troubled newspaper division, putting publisher’s jobs into play at Indianapolis and Louisville.

July 16: Gannett discloses that second-quarter earnings plunged 36% from a year ago. Dubow says the near-term outlook is grim. Investors panic: Shares trade as low as $14.70. Stock closes: $16.57.

July 31: Monthly traffic surges on Gannett Blog. The number of unique visitors climbs 21%, to about 17,500. Page views soar 41%, to about 144,000.

Aug. 13: Management grows more desperate, disclosing plans to lay off 600 employees and eliminate another 400 jobs in the troubled newspaper division. Shares briefly surge, but soon begin falling again.

Aug. 18: Gannett starts issuing pink slips. Enraged employees complain the layoffs are taking too long: “The way that management carried this out felt very much like a hit and run.”

Aug. 22: GCI says July revenue dived 12.3% from a year ago, as classified ad losses accelerate. Stock closes: $17.67.

Sept. 9: In a major reorganization of its troubled newspaper division, Gannett discloses it has laid off about 100 directors — heads of human resources, production, advertising and other high-profile jobs.

Oct. 1: Gannett says Standard & Poor’s has put the company’s long and short term credit ratings on credit watch, with “negative implications.” Dubow tries to calm investors: “Our underlying fundamentals remain strong and we continue to be a solid investment grade company.”

Oct. 24: GCI says third-quarter earnings plunged 32% on a worsening decline in newspaper advertising sales, spurring more job cuts by year’s end — and encouraging the once-unthinkable: slashing the company’s unusually generous dividend.

Oct. 28: Reeling from a second consecutive quarter of big revenue losses, Gannett announces plans to lay off 10% of its newspaper employees — up to 3,000 workers — by early December. Stock closes: $10.22.

Nov. 28: Internal Gannett documents show every company newspaper but Detroit’s was profitable as of the third quarter of 2007. Highest profit margin: the Green Bay Press-Gazette, at nearly 43%.

Dec. 3: Gannett has launched newspaper division layoff. Within days, employees have counted nearly 2,000 jobs cut. Stock closes: $8.87. (Closing price the day Dubow named CEO: $75.31)

And these are just the highlights (lowlights?) What have I missed? Please post your replies 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.

S.O.S.: A plea to the board of directors

August 23, 2008
“Are you out there?
Are you listening to any of this?”

Anonymous@4:17 p.m.commenting on the angry response to Corporate’s handling of this week’s 600 newspaper division layoffs.