Influential newspaper industry consultant John Morton asks the $1.75 million bonus question, in a new American Journalism Review essay: "Can newspapers really expect to recapture what they have lost with less circulation, a thinner newspaper offering fewer services to readers, with editorial products undermined in breadth and depth by layoffs and space constrictions? I think not."And while we're at it, can Gannett credibly say it's going through a real transformation -- CEO Craig Dubow's fave buzzword -- when margins remain so high? Morton notes that average operating profit margins were 17% last year at publicly owned newspaper operations. "Most non-media businesses couldn't hope to achieve even half that in the best of times,'' he writes.
[Hat tip, Romenesko]
Whores and sluts for profit. Face the facts...most businesses would kill for these profit margins. And the talent drain will show up for years. Big Al was the beginning of the end...and Dubow has not much left to clean up.
ReplyDeleteTransformation...no, demise.
Advice to anon@11:35am: Quit complaining. If you do not like where you are, then move on and do something else. The greatest thing about living in America is that you have countless opportunities to do whatever you want - including starting your own blog to complain about where you work or used to work. Gannett management will continue to run Gannett the way "they" want to run it. If you work at corp or any Gannett property, you know the drill. The bottomline runs the show. But, the cool thing is - if you do not like your current work situation - no matter where you are you can do something about it - yourself. I'm sure there are many people who feel the same way you do. So, quit the 2nd grade namecalling and find a new job or career that you can truly enjoy.
ReplyDeleteI work for one of Gannett's larger dailies. We have gone from a business staff of 13 to just one editor and five reporters. Our standalone section is now buried behind sports. Business reporters are now in the general weekend rotation (note that reporters from features and sports are not).
ReplyDeleteI just want to know: Why? Why is business news being marginalized? This is still arguably one of the most important coverage areas for readers. What was behind the executive thinking here? I have never heard an answer on this. Why don't we instead beef up consumer coverage at a time of a pending recession? Why don't we have a real estate reporter to cover the housing bust? Why don't we have someone covering the business of health care as the topic becomes one of national debate? I could go on. Since when did readers stop caring about their money?
1:26 - "Since when did readers stop caring about their money?"
ReplyDeleteThey haven't! But understand, there are hundreds of niche publications online where people can turn for their business news! Hell, you can google just about anything! Readers don't have to get it from the paper anymore - which is why your paper and many others have shifted their coverage to other things they "think" people care about. As for the first poster, well, I can understand your frustration. But as someone who recently left Gannett, I have to agree with the second poster. It's a free country. No one is holding a gun to your head and making you work for a company that cares more about pleasing its executives and shareholders than it does its readers -- it's main clientele. I am SO glad I left. You guys are so far behind the times -- especially when it comes to technology -- it's shocking. Your information centers are just window dressing for innovation. Handing a 23-year-old a laptop and a camera and telling him to go out into the neighborhood and file "news" isn't innovative - it's stupid. So is asking people to upload video to a site that doesn't have enough space to host it. There are newspaper and niche publications in other countries that Gannett would do well to learn from - in terms of how to present the news. Will they? Can they? Do they even care when they're busy slashing jobs and leaving overworked employees to pick up the slack - many without overtime? If you hate it enough to call people whores and sluts -- leave. And yeah, it's easier said than done - but do it now before the massive layoffs (like the ones that hit Tribune) begin. Because when the bottom line doesn't pan out for the suits on the 11th floor - you'll really be sorry.
1:18 Anon. Kiss my royal. I left Gannett after sixteen years...as an executive...and always defended the rank and file. Always tried to get larger pay raises and emphasized more training.
ReplyDeleteYes, you are right...if the mindset is continuation of large margins, then shrink the employee base. It, sustainable revenues, is not realistic given the loss of customer loyalty in all business venues. Gannett has been a media conglomerate that has a shitty reputation. My resume is worse off with Gannett than not.
Sad to say.
Gannett will have to sell off more properties. As will Zell. And ultimately McClatchy. Landmark is for sale. And JRC will be doing same shortly or declaring bankruptcy.
ReplyDeleteThe top people won't be able to cut far and deep enough to stabilize the wounds.
Folks, we need to remember the issue is Wall Street and the fact that so many of these companies went public.
ReplyDeleteShareholders -- most of them institutional, remember -- are addicted to high margins. Now the long-foreseen and long-feared "correction" is under way, and the classified revenue is disappearing, and the icing on the cake is an economic downturn that has other areas down, too.
This blog has tried to voice the need for Gannett to re-invest in itself, and to stop trying to save its way to prosperity. The only way the company will be able to do that is to make that case to Wall Street, in terms the analyst community will buy, over the long-term.
Gannett managers and executives aren't cheap and mean because they're cheap and mean (for the most part). The entire context of Gannett's situation is the increasingly dysfunctional relationship with Wall Street -- a problem shared with most other media companies.
Morton's a friendly curmudgeon, but a curmudgeon no less. ("It's sooo hard to use the Internet! Can't people just put information back in the newspaper where it's easy for me to find?")
ReplyDeleteBut look at the numbers. Conventional wisdom used to hold that newspapers enjoyed a 30 percent profit margin. Last year, after ALL the cuts commenters on this blog complain about, the margin was down to 17 -- and, since that's an average, we know half the papers were below that. (I know those are industry averages and not Gannett, but I assume the company keeps pace.) Even after the expense cuts in recent years, Gannett nets much, much less. And the industry started 2008 with revenue down about 8 percent in the first quarter.
This is the fact -- the newspaper business model of yesteryear is untenable. Changes are coming. People who don't like change should get out now.
Sounds like Gannett's Executive team is responding to these posts.
ReplyDeleteWelcome to the blog Executives...Now do your F*&%kg jobs and stop walking around like pompous asses collecting your pathetic pay checks. Are you reading this blog and taking notes? There are plenty of people in all the offices talking about this blog and making mention of every topic.
I think there are more people in the industry reading this as well.
Looks like this new digital medium has exposed you! Quite a transformation.
Then pay the piper. A 10% cut in all management salaries. And no increases for '09.
ReplyDeleteThe Wall Street comment is especially apropos ... didn't one of our fav Gannett execs almost promise more slash and burn into prosperity tactics to Wall Street analystis?
ReplyDeleteThe problem is that some of us see journalism as a calling, a vocation if you will. And today's newspaper execs are justifying their inflated salaries on the basis of return to the stockholders.
Considering the current GCI stock price ($28.60 and sinking)our fearless leaders are failing by both our and Wall Street measures.
Barring some dramatic change, such as making Google, Yahoo and others actually pay for the newspaper content they offer readers for free, Gannett as it currently exists is not going to last much longer. The company will NEVER be able to return to the halycon days of company-wide 30 percent-and-growing profit margins. Wall Street knows the preceeding statement is a fact, and that's why the stock is in the gutter. There is little to no advantage from a pure profit perspective to owning a national network of newspapers.
ReplyDeleteThe economics are a harsh reality. That classified recruitment page could yield $60 to $90 an inch of space...or $20,000 per page...enough to pay the yearly salary of one low-level employee.
ReplyDeleteThe losses add up real fast...and can't be recouped elsewhere.
Wall Street is the true grim reaper.
Gannett Bloggers,
ReplyDeleteI would suggest that for most of you the first quote below is your day to day operating style. You might be much happier if you consider the second quote.
1. "Faced with the choice between changing one's mind and proving there is no need to do so, almost everyone gets busy on the proof."
2. "One has not only the ability to perceive the world, but an ability to alter one's perception of it; more simply, one can change things by the manner in which one looks at them."
anon 2:44p, not sure what you are talking about except for the fact that this company is falling apart and these leaders have to go!
ReplyDeletefrom anon 2:44 to anon 7:29
ReplyDeleteThere you go getting busy on the "I am right track" instead of trying to make a difference.
anon 2:44 p.m. ...and many others...the latest catch-phrase I've heard Gannett managers using goes along the lines of "leaders define reality," which - if I'm reading your post correctly - is pretty much what #2 says...here's the thing, reality is reality...contrary to common Gannett-thing: Just because you say something is some way does not make it so. Therein lies the problem of the company - many Gannett managers seem to seriously believe they can "define reality." When and if you wander on back to the real world, we might have a shot at saving this company, but as long as you're out there "defining reality," our chances are looking slim.
ReplyDeleteto annon 9:58
ReplyDeleteAgain you demonstrate your unwillingenss to do anything but complain. My earlier quote #1 seems to ring true in your case. You're too busy justifying your mindset and not focused on making a difference yourself. I doubt it will make a difference with you but here is another quote for your consideration:
"Imagination is the one weapon in the war against reality."