Archive for the ‘The Industry’ Category

Moodys: GCI partner MediaNews headed for default

December 11, 2008

That would add even more pressure on the unfolding Detroit drama, where MediaNews Group under CEO William Dean Singleton (left) owns 5% of the Detroit Media Partnership joint operating agency; Gannett owns the rest.

From trade journal Editor & Publisher‘s just-posted story: “Moodys Investors Services predicted Thursday that William Dean Singleton‘s MediaNews Group will soon be in at least technical default of its credit agreement — with a debt load that is nearly as staggering as the leverage that led Tribune Co. to seek Chapter 11 bankruptcy protection.”

MediaNews disagrees with Moodys, and rejects E&P‘s comparison to Tribune. Gannett and MediaNews are also tied together through the Texas-New Mexico Newspapers Partnership. Meanwhile, Gannett is partners with Tribune in two ventures: employment website CareerBuilder, and website entertainment chain Metromix.

Motown, Project Griffon — and that secret PM code

December 11, 2008

Here’s the Executive Summary of what anonymous readers and senders of e-mail to yours truly have been whispering about in comments here and here over the past week. (Who knows? Maybe some of what follows is even true!)

The Gannett-controlled publisher of the Detroit Free Press and The Detroit News is working on something super-duper-secret called “Project Griffon.” It would represent an enormous gamble by Gannett and its partner, MediaNews Group, to stanch multimillion-dollar losses in a city whose economy is cratering around the auto industry crisis. Hanging in the balance are the jobs of perhaps 2,000 employees.

Yet with nothing to lose but, well, more losses, the idea is to blow up the traditional newspaper business model in an especially dramatic way. A formal announcement could come as soon as Tuesday — if you believe the speculation.

The concept explained
Under the purported plan, one or both Detroit papers would end home delivery entirely, except for perhaps two or three days a week — the more-lucrative Thursday, Friday and Sunday editions. Other days, there would be some sort of slimmed-down single-copy-only version. And everyone would be encouraged to subscribe to already-available electronic editions of the Freep and the News.

Stoking speculation: this widely circulating link to a special Freep subscription offer. When prompted for the two-digit access code, type MP and you get one offer; type PM, and you get the offer purportedly available under Project Griffon.

An adviser on all this, we are to believe, is a Silicon Valley consulting firm, IDEO, with a wild-and-crazy website (detail, left) to match its California-groovy About:

Based in Palo Alto, Calif., IDEO is “an innovation and design firm that uses a human-centered, design-based approach to help organizations in the business, government, education, health care, and social sectors innovate and grow in three ways” — and it just keeps going on and on like that!

Is any of this true?
There are many things I don’t understand about this — like, whether any of it’s even true. That said, Detroit Free Press editor Paul Anger wasn’t very reassuring yesterday in this Metro Times column (second item) about Detroit’s future. Or maybe Anger was just choosing words extra carefully when he said: “I think it’s pretty safe to say we’re going to print a newspaper.”

Now, I can imagine lots of savings on newsprint, presstime and labor (depending on union contracts) for production, and delivery. But how would this affect ad sales, and the size of the ad sales staff? And what other savings would there be?

General Motors vs. Gannett
I’ve always thought San Francisco would be the first major American city to lose some or all of its traditional printed newspaper to the Internet; the Hearst-owned San Francisco Chronicle has been on the ropes for years.

But that was before General Motors‘ stock lost 84% of its value — in one year. Gannett shares, down 76%, aren’t far behind.

(Confidential to FG: How’m I doing so far?)

[Image: yesterday’s Freep, Newseum]

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]

On PBS, and here: Who’s going to pay for news?

December 9, 2008

[Gannett Tower is seen in screenshot of PBS show on Tribune Co.]

Yours truly perked up last night when I heard pundits on The News Hour say we’ve trained consumers to expect news and information to be free online — including all those updates you’ve been busting your humps to publish on your sites.

Problem is: As advertisers abandon newspapers, many march right past your websites, too, on their way to other new forms of even cheaper digital media. Meanwhile, few newspapers have matched The Wall Street Journal‘s success in selling subscriptions for online access.

“It breaks my heart that journalists are losing their jobs,” BusinessWeek columnist Jon Fine told the News Hour panel on yesterday’s Tribune Co. bankruptcy filing. “It breaks my heart when newspapers shrink. But someone’s got to pay for this stuff.” (Segment video.)

So, who’s that gonna be?
I don’t rattle my tip jar often; I prefer waiting until after a busy news cycle brings a surge of new readers — like the one we’re in now because of all these layoffs. Well, I heard from a couple tough-to-please readers soon after I posted a humorous reminder about my voluntary $5 quarterly subscriptions:

“This is a really dumb posting at a time when people are looking here for real information,” replied one reader. A few hours later, a second reader said: “Give me something substantial. If you do, you won’t need to advertise to get my greenbacks.”

Oh, well. There’s always tomorrow!

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Breaking: Tribune files for bankruptcy protection

December 8, 2008

Burdened by debt after going private a year ago, Tribune Co. — publisher of the Los Angeles Times, Chicago Tribune and 10 other dailies — has sought bankruptcy protection in federal court. Tribune is partners with Gannett in employment website CareerBuilder and the Metromix chain of youth-focused entertainment sites.

The Wall Street Journal (paid subscription often required) has been leading coverage with its story. Other reports: The New York Times‘s DealBook blog, and the Tribune itself. Here’s Tribune’s statement.

GCI partner Tribune said girding for bankruptcy

December 8, 2008

In fresh evidence of the industry’s downward spiral, multiple reports say Tribune Co. — publisher of the Los Angeles Times, Chicago Tribune and 10 other dailies plus TV stations — is preparing to seek bankruptcy court protection.

Gannett and Tribune are partners in CareerBuilder, the big employment classifieds website; GCI owns 50.8% and Tribune is No. 2 at 30.8% (the rest is owned by McClatchy and Microsoft.) Gannett and Tribune also are partners in Metromix, a chain of youth-focused entertainment pages on GCI websites.

The Chicago Tribune now has a story, and so does The New York TimesDealBook blog. They follow a Wall Street Journal story (paid subscription may be required to access).

Tribune’s reported step toward court protection comes on a week when newspaper publishers — including CEO Craig Dubow — are making high-profile presentations to powerful media stock analysts on Wall Street.

What’s it mean for Gannett?
This is only the seventh post to include the words “bankruptcy” since I launched Gannett Blog in September 2007. I think we’re going to see more ahead. And that’s why now is an excellent time to review the company’s last earnings statement, for the third quarter, with particular attention to measures of debt.

For that, I gladly step aside to make way for the finance gals and guys on this blog to show us how it’s done — and explain it to the rest of us. Please post your 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.

[Image: today’s Chicago Tribune, Newseum]

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:

NYT: As TV ratings plunge, it’s anchors away

December 1, 2008

Some on-air talent in top markets can still command million-dollar salaries — like Chuck Scarborough on WNBC in New York, The New York Times says today in a new story. But the high-profile jobs are becoming more vulnerable to market forces roiling local TV, analysts say. “The ratings for the broadcasts have gradually eroded over the years,” the story says. “The typical late newscast now reaches 12% of viewers watching TV in a given market, down from 21% 10 years ago.”

In October, Gannett’s KUSA-TV in Denver dumped anchor Bob Kendrick (left); he’d been with the station since 2003. The month before, WUSA-TV in Washington, D.C., didn’t renew anchor Todd McDermott‘s contract; he was reportedly paid at least $500,000 a year.

Has your GCI station dropped a pricey anchor? 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.

In late-day recovery, GCI breaks losing streak

November 21, 2008

(Updated.) Gannett’s stock closed at $6.32 a share this afternoon, up nearly 4%, after trading as low as $5.70 earlier in the day.

GCI has lost 40% of its value in the past 30 days alone vs. a smaller loss — 16% — for the widely-watched S&P-500 index, Google Finance says.