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]
The problems in the UK are really bad news for GCI, which has been propped up in recent years by their better-than-US performance.
ReplyDeleteBut now? Check this: http://tinyurl.com/57gqxs
And this: http://tinyurl.com/5z8v2z
S&P cut GCI from A- to BBB+ in May.
The more expensive it gets to borrow, and to insure debt, the less it will have to keep paying the richie-rich dividends.
Unless revenue starts going back up, I don't see how the stock price turns around.
The disaster that has been Newsquest in the UK is amplified by the insistence on following Gannet's slash-and-burn techniques at papers that are vastly smaller in size and unable to absorb the damage. For instance, the Herald's newsroom is said to have gone from 180 to 110 staff in just over a year.
ReplyDeleteWhile a US paper losing 100 staff out of 500 is bad, a near-50% cut has catastrophic implications on the product. It's no surprise with figures like this that Mr McGhee has decided to leave.
I also hear that the Herald group is busy attempting to implement the Information Center model as a "news hub"; even as the rest of the industry roundly mocks the whole idea. To attempt to do it while simultaneously and steadily removing staff and diverting resources into an ill-gotten video department seems utterly ludicrous.
Yet this is the reality of Gannett operations.