Archive for the ‘Board of directors’ Category

Gannett starts issuing pink slips: 600 jobs at stake; employees tally historic losses; blog updates all day

August 18, 2008

In one of the industry’s biggest mass layoffs, Gannett today begins notifying as many as 600 newspaper employees nationwide that they’re losing their jobs — just as thousands of other newly unemployed newspaper workers flood an already strained economy.

The layoffs, confirmed on Thursday, are on top of 400 other newspaper jobs GCI is simultaneously eliminating through attrition, as the faltering top publisher races to shore up profits amid plunging advertising revenues and a slumping stock price. “We are all in the same boat,” one employee says. “Let’s help each other get through this.”

The combined 1,000 lost jobs are 3% of the community newspaper division‘s total employment. That division employs more than 30,000 in the U.S., or about 65% of Gannett’s global workforce. The division’s 84 papers include titles such as the 250-employee Town Talk in Alexandria, La., which is laying off three workers, and The Courier-Journal in Louisville, Ky., cutting loose 15 of more than 1,000 employees.

Today caps four days of anxious waiting for 600 workers, who get the bad news this morning, and in days ahead. They will receive severance of one week’s pay for each year of service, capped at 52 weeks, plus medical coverage for the length of their severance period, according to Corporate’s layoff instructions to publishers.

Adding to worker worries, Corporate warned that these layoffs may not be the last. “If advertising and circulation revenues continue to decline, further payroll reductions may be necessary,” the company instructed publishers to tell employees.

Gannett flagship USA Today, the nation’s No. 1 circulation newspaper, has so far avoided cuts in this round. But employees aren’t off the hook: Publisher Craig Moon has scheduled a companywide staff meeting for Aug. 27 — prompting speculation that he’ll announce layoffs or more buyout offers.

This week’s layoffs rival the mass dismissal nearly 17 years ago of about 700 Gannett employees at The Arkansas Gazette. GCI closed that paper amid up to $30 million in annual losses during a bruising newspaper war it lost in Little Rock.

More on Gannett Blog

  • Roll call grows: Based on more than 150 contributions through the weekend, readers are tallying paper-by-paper layoffs.
  • USA Today in spotlight: Pressure builds on Publisher Craig Moon to sacrifice jobs or make other cuts in time for an Aug. 27 staff meeting.
  • Advice for laid-off: Employees who left in layoffs or buyouts over the past year tell you what to do now. “Good luck, and God bless to all,” says an ex-operating committee member.
  • Stricken expressions: Employees describe the mood in dozens of workplaces. (I’ll send the post link to a board of directors member who monitors this blog.)
  • Shrinking numbers: Pegged at 46,100 at the start of the year, GCI’s workforce now faces a record annual decline in its size.
  • Investors react: How will the stock perform when trading resumes at 9:30 a.m. ET today? Shares closed Friday at $20.65 — up 14.6% for the week, clobbering the S&P-500 Index.
News tips, publisher’s memos, other reaction: Please post 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 Town Talk front page, Newseum]

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Hang on, friends! I’m afraid it may be getting ugly

August 14, 2008

How’s the mood in your workplace? Tell the board of directors!

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.

For example, directors must now share limos

August 1, 2008
“We maintained our usual fiscal discipline throughout the year.”

CEO Craig “Former Atlanta TV Ad Salesman” Dubow, in his 2007 Annual Report to shareholders, who are represented by Gannett’s pampered board of directors.

But we’re sure they paid for their own gas (not!)

August 1, 2008

Regarding yesterday’s board of directors meeting, a reader says in an e-mail: “It was great to see the Gannett board gathered at Corporate headquarters today. It is nice to know in a time of cutbacks, layoffs, cost-cutting and financial crisis, the money could still be found for drivers and a shiny black Mercedes to drive each board member to and from the building. It’s also nice to see those chauffeur-driven cars sit in front of the building all day long so everyone inside had the chance to see that really important people must be in for a meeting. . . . Do these people not understand that appearance matters?”

Earlier: Is it normal for publishers to buy luxury cars? Plus: Publishers getting free gas from company pump?

Pop Quiz: What do execs drive?
Identify the cars driven by CEO Craig Dubow, Chief Financial Officer Gracia Martore, and newspaper division President Bob Dickey. Send your response from a non-work computer by writing to gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

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

Progress: GCI stock on Dubow’s third anniversary

July 16, 2008

[This is progress? Full stock comparison chart, here]

Based on today’s quarterly earnings alone, the board of directors should put CEO Craig Dubow on a performance improvement plan — instead of having rewarded him with a $1.75 million bonus. Yesterday marked the third anniversary of his ascent to CEO. Performance of Gannett, competitors, and the S&P-500 index since then:

Just how low must GCI go before the board lets him go?

Earlier: Eight words to remember on Dec. 31, 2008

[Data and image: Google Finance]

Earnings: What big investors expect this morning

July 16, 2008

[GCI stock has plunged 38% since last earnings report; bigger view]

Please see this update: Q2 profits tumble, and shares plunge anew

Gannett today is set to report crucial second-quarter earnings that may dramatically reshape the 102-year-old publishing giant. GCI could announce a spinoff or sale of some of its businesses — including the 23-station TV division — to appease increasingly unhappy investors. With 46,000 employees, Gannett is the nation’s top newspaper publisher.

The company should disclose its report on BusinessWire about 8:30 a.m. ET, one hour before stock markets open. Wall Street analysts, the powerful advisers to big investors such as mutual funds, expect Gannett to report about $1.74 billion in sales — a 10% decline from a year ago — and profits of $1.02 a share, Yahoo Finance says. Anything less would likely send GCI shares even lower.

Chairman and CEO Craig Dubow (left) and other top executives will discuss the earnings with analysts during a 10 a.m. conference call that will probably last about an hour. The call will be webcast from the company’s site. Details, here.

Dubow has so far resisted Wall Street pressure to break up Gannett into smaller, separate businesses. Those are steps already taken by Belo, owner of the The Dallas Morning News and other papers, and E.W. Scripps, whose portfolio includes the Rocky Mountain News. Under this scenario, faster-growing properties such as GCI advertising services firm PointRoll or the TV division would be rolled into one new company, and the no-growth newspapers would remain in another.

It’s unclear how long Dubow and the rest of the board of directors can hold out. Since Gannett announced first-quarter earnings on April 21, the company’s stock has plunged 38%, closing yesterday at a rock-bottom $17.35 a share — an 18-year low.

Earlier: Analyst predicts Gannett shares headed for $15, and anticipating Dubow’s analyst remarks

We know what the analysts want. Now, how about you? 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.

[Chart: Google Finance]

Fruit’s death, an empty seat — and a key moment

July 15, 2008

[After Fruit: GCI stock has tanked 39%; bigger chart view here]

The death nearly two months ago of Charles Fruit (left) reduced the board of directors to just eight members at a time when Gannett is facing an unprecedented crisis of investor and employee confidence. Yet, it’s not clear whether the company will fill his seat. The board’s size has varied slightly in the period I’ve watched the company closely — since October 2006. So, it may be that Chairman and CEO Craig Dubow plans to leave Fruit’s seat open. That would be a huge mistake.

As at all publicly held companies, Gannett’s board is charged with looking out for the interests of shareholders. That means overseeing top management, approving key executive hires, and reviewing the strategic plan. Now, as GCI morphs at a too-slow pace into a technology-focused enterprise, the board desperately needs active, seasoned technologists, ideally with engineering backgrounds. Of the seven independent directors other than Dubow, four of them are private-capital and other money-management types.

I write this today, when I suspect the board is meeting to consider tomorrow’s scheduled release of second-quarter earnings — plus other, crucial matters.

There’s no time to waste. Protocol suggests a respectful interval between a director’s death and a replacement. But Fruit, 61, a marketer for the Coca-Cola Co., died of a heart attack May 27. Since then, the company’s stock has plunged 39%, to $17.61 a share, as the newspaper industry approaches free fall. Gannett must have more adult supervision. The company requires a full and engaged board to act as stewards at a time when management needs to be watched even more closely. Director Neal Shapiro (above) — who, I wrote Saturday, is one of the more qualified members of the board — can’t do all the work.

The nominating committee is responsible for picking directors. Its three members are financier and former General Electric executive Arthur Harper; University of Miami President Donna Shalala; and Shapiro, CEO of PBS affiliate WNET-TV in New York.

Chairman Dubow, regrettably, will hold considerable sway over any final choice — yet another reason for separating the chairman and CEO jobs.

Earlier: As pressure rises, an unnerving ‘Dear Colleague’ e-mail

How would you like to see the board of directors change? Your replies, 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.

[Image: Google Finance]

As media shares plunge, GCI skids another 4%; possibly industry’s ‘worst single trading day ever’

July 11, 2008

Gannett shares tumbled 3.7% yesterday, closing at $17.77, down 68 cents — in a stock market riven by a worsening crisis for mortgage giants Fannie Mae and Freddie Mac. GCI was one of seven publicly held newspaper companies whose shares plunged to their lowest point in modern history, says leading blogger Alan Mutter. “Perhaps the worst single trading day ever,” he wrote.

Capping a miserable week, Gannett’s stock traded as low as $17.42, before closing at a level last seen in 1990. Since Monday alone, Google Finance says, GCI has tanked 9.3%. The stock’s performance over the past:

Yet, even as the industry approaches a near free fall, Corporate is keeping a weird public silence. No reassuring messages from Chairman and CEO Craig Dubow — or for that matter, from the other seven members of the board.

I’m especially interested in the newest director, former NBC News president Neal Shapiro (left). Now the CEO of highly regarded PBS affiliate WNET in New York, he joined the board only last October, and was re-elected in April. He’s also the board’s only journalist. (Dubow’s stint as an Atlanta TV ad salesman doesn’t count.)

Shapiro, 49, hasn’t been shy about knocking heads at WNET. So, what’s he think about Dubow & Co., as they reach the deer-caught-in-the-headlights stage? Does he invent an excuse to resign? Or does he morph into an activist director, pushing for a more aggressive restructuring — like spinning off the broadcast division, and dumping underperforming papers? Those are the sort of questions stock analysts will be asking Wednesday, when Gannett is scheduled to release its second-quarter earnings.

Earlier: Shapiro gives board more journalism experience

Related: WNET president seeks heightened sense of urgency

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.

[Image: Google Finance]

Saridakis as savior? Not under CEO Dubow’s folly

July 1, 2008

Chief Digital Officer Chris Saridakis is now engaged in an 11th-hour bid to move Gannett more quickly into digital publishing — creating a raft of new jobs in hopes of making GCI more competitive against fast-growing rivals like Facebook, MySpace and Google.

Burdened with legacy costs (older workers, aging factories, greedy stockholders), Gannett’s theoretical advantage over those technology upstarts is its nationwide portfolio of brands — from The Burlington Free Press in Vermont to The Arizona Republic in Phoenix, and all those other papers and TV stations in between. Historically, these GCI subsidiaries were the No. 1 source of local news and information in their communities.

But as Gannett continues chopping into the muscle of its newsrooms, the company risks trashing those brands even more — reducing the company to a collection of websites barely distinguishable from the better-performing technology upstarts now taking away GCI’s market share. Do you think young people in Burlington and Phoenix have any regard for the Free Press, the Republic and other Gannett companies as trusted news sources? Do those brands promise anything approaching the coolness of Facebook or Twitter?

This is the dangerous folly of CEO Craig Dubow‘s dead-on-arrival strategic plan: That Gannett can refashion itself as a new digital giant, while simultaneously draining itself of human and financial capital to keep shareholders happy — just so Dubow and his overpaid team can keep their jobs.

I realize that Saridakis, 39, has many fans on this blog, praying the board of directors elevates him to CEO. His supporters point to his successful leadership of advertising services start-up PointRoll, now a subsidiary of Gannett, as evidence he could be the company’s savior.

But I challenge Saridakis to explain how he could have built PointRoll into a prosperous enterprise — while simultaneously hitting double-digit profit margins to pay ever-growing dividends. It wouldn’t have worked at PointRoll, and it won’t work now — if Gannett’s going to survive.

Earlier: In Saridakis, a new generation jockeys for power

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.

Testing new lows, Gannett stock tumbles 2%

June 24, 2008

Shares closed at $22.37 yesterday, after trading as low as $22.18 earlier in the day. GCI’s stock is now down 59% from a year ago, Google Finance says.

The yield has hit an obscenely generous 7.2%, following CEO Craig Dubow‘s reckless pledge to protect the dividend at all costs. “Return to shareholders begins any discussion about the use of Gannett’s substantial free cash flow,” he told the annual shareholders meeting in an April speech.

Dubow’s shameless Wall Street ass-kissing has cost the jobs of untold numbers of employees — while starving R&D and other crucial efforts needed to keep the company afloat. To be sure, Wall Street won’t call for a cut in the dividend. For that, Gannett would need a CEO and a board of directors with guts.