Archive for the ‘Newsquest’ Category

Gannett’s Scottish papers fire all 250 employees

December 3, 2008

The three papers in Glasgow invited all the workers to reapply for their jobs, if they agreed to new terms and conditions, the Guardian newspaper says. The Herald, Sunday Herald and Evening Times are all owned by Gannett’s UK division, Newsquest.

A reader tells me in an e-mail that all three papers are still making “industry-leading profits,” even in the economic downturn. Still, the reader writes: “After four years of persistent cutting, the group admitted that the papers’ staffs are now too small to be viable. So they are reshaping the company to enable further cuts.They are to be invited to apply for jobs in a new, flatter, merged operation. There will be 200 posts advertised, all under new terms and conditions (so lower salaries and fewer holidays are expected at the minimum).”

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

November 28, 2008

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.

Briefs: Online ad sales fall; Newsquest staying put?

October 25, 2008

Odds ‘n’ ends left over from yesterday’s third-quarter earnings report, and Wall Street teleconference.

Online revenues down
In what may be a first — and not a good one — online advertising sales in the 84-daily community newspaper division have fallen.

Such sales fell about 7% in the third quarter from a year ago, CEO Craig Dubow (left) told Wall Street stock analysts. In contrast, he said, U.K. newspaper division Newsquest was up about 10%, in British pounds Sterling. Broadcasting rose about 15%. (These figures are in the teleconference transcript; I can’t find the same dataset in the earnings release, however.)

Dubow’s breakdown for domestic and U.K. is the first I’ve seen in a year; earlier 10-Q filings with the U.S. Securities and Exchange Commission gave one figure for all of GCI’s papers. Indeed, the last time Gannett reported a separate figure for U.S. papers — in 2007’s third quarter 10-Q — domestic online revenue rose 11% from a year before. So, the U.S. papers have gone from 11% quarterly growth to a 7% decline. This is not a good thing.

Four-state squeeze
Arizona, California, Florida, and Nevada have had much larger declines in classified advertising relative to the rest of Gannett’s markets, and that continued again in the third quarter. Properties in those states produced about 23% of the community newspaper division’s ad revenue — but they drove 36% of the ad revenue decline.

Here’s what this boils down to: The Arizona Republic and four Florida newspapers pumped up Gannett’s revenue during the housing bubble. They had booming real estate markets — and all the ad sales that came with a boom. But when the bust hit, advertising withered, and they contributed more than a third of the 18% dive in third-quarter newspaper ad sales.

Newsquest stays put?
Responding to a question from a stock analyst, Dubow didn’t sound like he’s interested in selling Gannett’s troubled U.K. division — despite published speculation to the contrary. “We have been very proud of what the Newsquest folks have done for us for a number of years and we are very, very aware of the impacts that have occurred because of the economy. . . . They are a bit behind us. I think it is quite clear when you take a look at it, maybe six to nine months or so in what we are seeing that’s already occurred here in the U.S.”

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 Republic, Newseum]

Blog: Newsquest’s Herald primed for a strike

October 23, 2008

In an e-mail, a reader describes cutbacks roiling The Herald group — three Scottish dailies that are part of Gannett’s Newsquest division in the United Kingdom. The budget reductions come “despite record levels of profits last year, on the back of three rounds of redundancies (buyouts) that have resulted in a one-third drop in editorial staff over two years,” my reader says. “The papers are literally being destroyed — steeply declining circulation, unfeasibly tight budgets in all areas, internecine internal politics, staff replaced by casuals, then pressure on managers for hiring casuals.”

The Herald staff has already been out on strike to prevent compulsory layoffs once, the reader notes — and it looks as if they might do it again, the All Media Scotland blog says. My reader’s e-mail concludes: “It has been very interesting reading about the U.S. experience on your blog. We get a shadow of Corporate’s policies, but we feel them far more deeply. In fact, we are still plodding lamely down the discredited Information Center path, hampered by poor software and a badly botched roll out of new production systems.”

[Image: a recent screenshot of the Herald’s homepage]

Documents: papers’ online revenue growth slowing

October 13, 2008

[Trending down: online newspaper revenue growth]

It’s certainly good news that Gannett’s online newspaper revenue rose 5% in the second quarter from a year ago — even as the overall newspaper industry saw its digital revenue fall 2.4% over the same period. After all, digital is the company’s future.

But a close look at public documents shows a more unsettling trend: At 5%, GCI’s most recent growth has plunged to barely a fifth the 24% growth rate reported for all of 2006. (Gannett didn’t publish such annual data for 2007, saying only that “solid online revenue growth was also achieved.”)

Indeed, growth rates have been trending down for quite some time, as the table shows, above. To be sure, these comparisons aren’t apples-to-apples. Chief Financial Officer Gracia Martore apparently switched to reporting combined data for all newspapers — including the 17 Newsquest dailies — rather than separating British and domestic, the standard through last year’s third quarter. That switch started with this year’s first-quarter financial report.

Without those Newsquest titles, Gannett’s quarterly growth rate might have been smaller — or perhaps experienced the same industry-wide loss. Here’s why: The last time GCI broke out U.K. and domestic newspapers, in 2007’s third-quarter report, Newsquest’s rate was four times bigger than domestic — 46% vs. 11%. If that trend continued through this year’s second quarter, the U.K. operations may have masked problems in the U.S.

[Data: forms 10-Q and 10-K, Gannett investor relations; image: one of today’s Newsquest dailies, the Southern Daily Echo, Newseum]

Blogger: ‘Signs point’ to GCI selling Newsquest

October 8, 2008

The British chain of 17 dailies and about 300 weeklies was mostly to blame for Gannett’s nearly $2 billion write-down in assets this summer. With circulation continuing to fall in the U.K., and fresh challenges in Gannett’s domestic market, Guardian blogger Roy Greenslade says: “Many of its dailies have suffered from terrible circulation declines. The Brighton Argus is selling just over 30,000 and falling, the Oxford Mail sold fewer than 24,000 in June, and the Colchester Gazette is barely selling 21,000.”

With more consolidation of newspapers in the British market, Greenslade says, “signs point towards Newsquest as the most likely victim of the down-turn. But, even if rival groups or local managers think some of the weeklies have a future, who really wants 17 failing regional daily papers.”

Gannett has denied Newsquest sale rumors before, of course.

[Image: today’s Southern Daily Echo, one of 17 Newsquest dailies, Newseum]

Hot Off the Press: Kids are news at UK’s Daily Echo

September 11, 2008

Yesterday’s front page; bigger view. The Southern Daily Echo in Southampton features three youth-related stories on its front. It’s one of 17 dailies and about 300 weeklies in Gannett’s British Newsquest division, and the only one participating in the Newseum’s wonderful front-page database. I’d feature more Newsquest titles if they were available there.

Got a front page to recommend? First, find it at the Newseum’s Gannett pages. Then paste the link in the comments section, below. To e-mail confidentially, use this link to write gannettblog[at]gmail[dot-com]. See Tipsters Anonymous Policy in the green sidebar, upper right.

Reader: GCI’s ‘cloak and dagger’ offshoring in UK

August 31, 2008

Regarding Gannett sending advertising production work to offshore vendor 2AdPro, a reader says: “Gannett’s UK arm, Newsquest, is slowly migrating its design work over to 2AdPro and, reading your comments, I fear this is the end of many careers, mine included. What makes it worse is that it’s all very cloak and dagger; no announcement, no consultation: silence. For a media company, we’re not too good at communicating. I believe some UK sites are already sending a percentage of work over to 2AdPro (with extremely negative results — no surprise there) and many redundancies have been made across the UK in its production departments.”

Join the debate, in the original post.

Earlier: Newsquest editor quits Scottish paper after losses

Newsquest staff: There are 8,100 of you in Gannett’s UK division of 17 dailies and hundreds of weeklies. Write more often; I like hearing from you! Post your replies in the comments section, below. Or e-mail gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Newsquest editor quits Scottish paper after losses

July 18, 2008

Charles McGhee (left) surprised colleagues early today by quitting his post at Glasgow’s Herald after Gannett’s big second-quarter profit and revenue fall, the Guardian says.

“McGhee’s revelation sparked speculation that he quit after being told that Herald owner Newsquest was seeking even deeper cuts in staffing and budgets at the paper,” the Guardian says. “Over the past few months, McGhee has forced through several waves of cuts and voluntary redundancies, provoking angry complaints from staff and unions. The most recent cuts were in May, with 40 posts across the Herald group axed, including 20 editorial staff.”

The Herald‘s circulation has dropped, contributing to Newsquest woes that last month spurred Gannett’s planned $3 billion writedown. The paper sold an average 63,951 copies daily in June, the Guardian says, down almost 8% from a year ago.

Earlier: U.K. workers strike over ‘Dickensian’ conditions

[Photo: Guardian]

Hot Off the Press: Southern Daily Echo

July 4, 2008

This morning’s print version; click on the image for a bigger view. One of 17 dailies in Gannett’s British Newsquest division, the Echo‘s lede story today is a classic tabloid tale: “A mother told a court how she shopped her own son to the police because she believed he had beaten a man and left him for dead,” reporter Melanie Adams writes. “Hilary Kellett said she was violently sick at the thought her ‘own flesh and blood’ could have been responsible for the terrible injuries suffered by Scott Speirs during an attack in a Southampton park.'”

Got a front page to recommend? First, find it at the Newseum’s Gannett pages. Then paste the link 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.