Update at 9:57 a.m., April 28: Former Gannett Publisher Donna Donovan (left) wrote to me this morning to note that the "publishers, general managers and editors I mentioned in my column all work for other companies, some public, some family owned. The papers I referred to as being actively up for sale are not Gannett papers."Donovan, who remained publisher when GCI sold the Observer-Dispatch to GateHouse Media, writes about life a year later at the Utica, N.Y., paper. "It's going very well, indeed,'' she says.
But what really caught my eye: She's heard from former Gannett co-workers. "Many of the publishers, general managers and editors I spoke with this past week were themselves in limbo," Donovan says. "Some are at newspapers actively up for sale. Others asked if I’d heard the rumors they’re likely to be put on the block. Still others are worried that they’ll soon be looking for work, their job the victim of massive consolidations and job-sharing affecting our industry."
[Hat tip, to a reader's comment, here; photo: Observer-Dispatch]
Donovan's column suggests Gatehouse has been doing a lot of investing to strengthen the property it purchased from Gannett.
ReplyDeleteWall Street and shareholders historically laud Gannett's frugality and focus on efficiency. But having trimmed all the fat over the years, Gannett now has to cut into bone, brains and muscle to deliver the returns Wall Street expects during the cyclical and systemic changes under way.
As a result of cuts during this downturn, papers everywhere (even moreso outside of Gannett) are not re-investing in themselves as they should if they are going to survive.
People on this site criticize Gannett's cutting of newsroom jobs, but Gannett and other newspaper companies have probably made even deeper cuts have been made in non-newsroom areas (marketing, IT, HR, circulation, production, etc.).
It's probably valid and necessary to do a lot of these things, centralization and consolidations and so forth, because papers HAVE to adapt their 20th century cost structure to the 21st century realities -- if they want to survive beyond another five to ten years.
Yet, let's hope this short-term survival focus doesn't result in gaps in near-term investments needed for long-term health, in areas ranging from circulation marketing to local content to consumer marketing to online people to B2B ad sales marketing, etc -- everything that's really UNIQUE to a local marketplace. You get the idea.
Gannett needs to reinvest in itself. Maybe it's not a bad idea to sell off some TV stations and newspapers in order to invest in new businesses and also reinvest and improve the remaining properties.
I can think of one major operation that Gannett would want to unload asap: the Detroit Media Partnership. As mentioned earlier in Gannett Blog, the Detroit Media Partnership's lower-than-expected earnings have been a drag on the company's performance. And the Metro Detroit economy is not going to recover from the huge numbers of layoffs caused by the shrinking U.S. auto industry. Besides, Gannett has a partner in Detroit who has previously taken troublesome properties off its hands: Dean Singleton, the owner of The Detroit News. And, trust me, the Gannett bean counters don't care that the Detroit Free Press is a well-known (if highly overrated) paper.
ReplyDeleteLansing, Port Huron, Battle Creek, Livingston County and all of the Greater Lansing community publications are Gannett properties that could be bundled with DMP. After all, GCI Advertising is all about selling bundles, or packages, to customers.
ReplyDeleteAnd trust me, all Michigan sites are hurting (not profit-wise, necessarily, but "plan" as established by Group and Corporate). I have a friend who works in Lansing and says it's ugly. More cuts, including personnel are planned / expected in Q2.
So, GCI might as well sell all of the sites to Booth (Newhouse). Being privately held and already well-consolidated within the Great Lake State, Booth could quickly resurrect the Michigan Gannett sites much like GateHouse is doing in Utica.
If it did, though, what would that mean for the Gannett-owned TV station in Grand Rapids?
Ah yes, but GateHouse is just a down-market chain, right, Jim?
ReplyDeleteTo Howard: Your memory is TOO good.
ReplyDeleteJim:
ReplyDeleteAs long as Gatehouse's Howard Owens raised his hand, your readers should be aware that while GCI has lost 50 percent of its value over the last two years, GHS has lost 75 percent. Source: rough estimate from Yahoo charts.
(This is from someone who tried to buy 1,000 shares of GHS at $6.60, but could only get 100 before it bounced.)
Where's the content editor when I need it. Not $6.60, but $4.65 when it bounced.
ReplyDelete