Archive for the ‘Phoenix’ Category

NYT: On dealmaking sidelines, GCI came out ahead

December 10, 2008

Tribune Co., MediaNews Group and McClatchy Co. — all business partners of Gannett’s — gorged on newspaper deals in 2007 and 2006, only to wake up this year with too much debt and not enough income. Plenty of other investors made the same mistake, too, leading to an industry bubble that has now burst.

“There are some exceptions to this story,” Richard Perez-Pena reports for The New York Times today. “Companies like Gannett that do not have a lot of debt, and did not make major new newspaper acquisitions in recent years, are in much better shape than their peers, despite sharp revenue declines.”

The last big Gannett deal I recall was more than eight years ago, when the company paid $2.6 billion cash to the Pulliam family for The Indianapolis Star and The Arizona Republic, plus four dailies in Indiana and Louisiana.

Papers would be in trouble no matter what. “But the companies in the weakest condition are there largely because they borrowed a lot of money to buy papers,” Perez-Pena says, singling out Tribune, which just sought bankruptcy protection. “Tribune’s was the biggest of those deals, $8.2 billion to take private the company whose assets include the Los Angeles Times, the Chicago Tribune and 23 television stations, a transaction that almost tripled the company’s debt.”

[Image: yesterday’s Star front page, Newseum]

UBS: ’08-’09 ad sales decline to be ‘worst in history’

December 9, 2008

Matthieu Coppet told the 36th annual media conference yesterday that he had revised downward his previous estimates for ad spending this year and in 2009, The New York Times says. The conference is sponsored by investment bank UBS; Gannett appears tomorrow.

Also, the New York Times Co. is in talks with lenders about debt payments coming due in the next two years, Editor & Publisher says — a day after the company disclosed it would borrow $225 million against the value of its new Manhattan headquarters to help repay loans due in May. “There is no doubt that 2009 will be among the most challenging years we have faced and more steps will be needed,” NYT CEO Janet Robinson (inset photo) said today, ahead of her UBS presentation.

UBS’s Coppet had previously forecast an ad spending decline in the United States next year of 5.9% compared with 2008; he changed that to a decline of 8.7%, primarily because local advertising could fall by a “double-digit level,” the NYT story says.

Coppet predicts local newspaper ad spending in 2008 could fall 9% from 2007 and in 2009, it could fall 21% from 2008. For newspapers in general — local and national ads, in America and other regions around the world — the declines Coppet is forecasting are, he wrote in a report, “the worst in the history” of the medium.

For comparison, Gannett’s newspaper ad revenue plunged 17.7% in the third quarter, to $977.1 million, from a year before. Year-to-date, newspaper ad revenue is down 13.8% from last year, the third-quarter earnings report says.

CEO Craig Dubow and his management team are scheduled to speak to the media stock analysts at 10 a.m. ET Wednesday, the conference’s third and final day. (Webcast details.)

[Images: Robinson, NYT; today’s Arizona Republic, Newseum. The Phoenix paper, which vies with USA Today as Gannett’s biggest by revenue, has been especially hard hit by real estate ad losses]

USAT: Nearly half this year’s hires were minorities

December 6, 2008

(Updated.) The company’s flagship newspaper disclosed that figure as one of the most powerful minority journalism trade groups challenged Gannett to “review its diversity numbers,” once this week’s 2,000 newspaper job cuts are complete.

“We’ve actually been able to step up our commitment to diversity,” Brent Jones, USA Today‘s standards and recruitment editor, told the Maynard Institute’s Journal-isms blog. “We’ve had great success in recruiting in 2008, particularly at Unity. In fact, 48% of our hires this year were journalists of color.”

The Maynard Institute promotes diversity in media. Jones told blog author Richard Prince that, of 12 USA Today newsroom jobs cut this week, “two — or 16% of the cuts — were of minority journalists. That included one African American and one Asian American.” He did not identify them by name, Prince said.

Jones provided the figures as the National Association of Black Journalists issued its high-profile challenge Friday to the newspaper industry, Prince told me this afternoon. (When I first read his post, I thought Prince had called Jones after the NABJ issued its statement.)

NABJ singled out just one publisher: Gannett. The group, which claims 3,300 members, is the largest of four minority journalism professional associations. The other three are the Asian American Journalists Association, the National Association of Hispanic Journalists, and the Native American Journalists Association.

Gannett, the nation’s No. 1 newspaper publisher, has been a major financial backer of the four groups through direct grants from its charitable arm, the Gannett Foundation.

Did USAT newsroom avoid layoffs?
In what I believe is the paper’s first official acknowledgement of how it reduced its workforce, Prince quotes Jones as saying in an e-mail: “A total of 12 journalists were laid off, including four voluntary layoffs.” Previously, USA Today had said it would cut 20 occupied jobs from its 450-person newsroom, because of Corporate pressure.

Jones’ statement suggests the paper avoided eight forced cuts. But he may only be counting reporters and editors as “journalists.” I know of at least one newsroom layoff involving a bureau office manager who didn’t produce content for the paper or website.

Whatever last week’s newsroom tally, USAT has yet to disclose the total number of jobs it cut across the paper amid Gannett’s nationwide 10% newspaper workforce reduction. USA Today employs between 1,500 and 2,000, making it one of the company’s three biggest worksites. The other two are The Arizona Republic in Phoenix, and the Detroit Free Press and its business affiliates.

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: Thursday’s USAT front page; I would have illustrated this post with Friday’s paper, but that edition isn’t in the Newseum‘s database]

CJR: Phoenix, USAT deny pre-pub review claim

December 5, 2008

Taser International asserts Gannett’s two biggest newspapers agreed to show the controversial stun-gun maker any stories they wrote before publication, as part of a lawsuit settlement — claims they deny, Columbia Journalism Review reports today. The papers are USA Today and The Arizona Republic.

Taser made the claims in a U.S. Securities and Exchange Commission filing that CJR says amount to false statements. The trade publication’s account is a fascinating inside glimpse at the machinations of lawsuits against newspapers — and the settlements that sometimes follows.

[Photo: the X26 model stun gun, Taser International]

Former top editor Bushee on future of newspapers

December 4, 2008

Ward Bushee (left) spoke to San Francisco’s KQED public radio this morning about The San Francisco Chronicle, which he joined as editor this year after leaving The Arizona Republic. (He told KQED an amazing story about a near-death experience that I’d never heard.) The interview is available on the station’s website, or you can listen to it below:

How Phoenix is dragging down Gannett revenue

November 29, 2008

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.

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.

[Image: yesterday’s front page, Newseum]

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.

Papers to compete with Cherry-Coke Jello Mold

November 27, 2008

There’s lots of competition for readers’ attention today, what with Thanksgiving newspaper circulars to scour for Black Friday deals — and all the extra bing cherries Aunt Marcelline piled into her world-famous Cherry-Coke Jello Mold. So! Why not try something different on page one — as this sampling of Gannett papers shows?

First up is the Times Herald in Port Huron, Mich. (bigger view):

The Tulare (Calif.) Advance-Register (bigger view):

And The Arizona Republic (bigger view):

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

[Images: Newseum]

Phoenix: Republic sells small Diamondbacks stake

November 19, 2008

Gannett’s company-wide garage sale continues in full swing: The Arizona Republic has sold its 1% stake in the Arizona Diamondbacks pro baseball team, ending a relationship that began when the paper’s corporate parent provided seed capital establishing the team 10 years ago. Financial terms, including the sale price, were not disclosed.

The Republic initially made a $5 million investment and two subsequent $1 million cash calls early on to help with the team’s “financial shortcomings,” the paper said in a story reporting the sale. That $7 million stake was worth just more than 1% of the team. Gannett bought the Republic, plus The Indianapolis Star and three other dailies in Indiana and one daily in Louisiana from the Pulliam family in 2000 for $2.6 billion in cash.

Circulation: USAT flat; Phoenix, Freep, Indy fall

October 27, 2008

Daily circulation at the nation’s newspapers fell 4.6% in the six months ended Sept. 30, and Sunday circulation dropped 4.8%, new industry data out today show.

The declines were slightly worse than the year-ago pace, when circulation fell 2.6% daily, and 4.6% Sundays, trade journal Editor & Publisher says.

The figures were compiled by the industry-supported Audit Bureau of Circulations. ABC made public the data for the top 25 daily and Sunday papers among the 571 U.S. newspapers it audits. Gannett papers I found on the lists:

  • USA Today: 2.29 million daily, up 0.01%; no Sunday edition
  • The Arizona Republic: 361,333 daily, down 5.5%; 463,036 Sunday, down 3.7%
  • The Detroit Free Press: 298,243 daily, down 6.8%; 605,369 Sunday, down 3.7%
  • The Indianapolis Star: 244,796 daily, down 3.3%; 321,760 Sunday, down 4.6%
These are all the numbers I’ve been able to find for Gannett. Got the complete report? Let me know! 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 Indianapolis Star, Newseum]