Back in January, Anonymous@7:10 a.m. recalled today, I compared management's strategy to a scene from Hunt for Red October, where they stripped down a helicopter to make it a "flying gas can."
In the aftermath of last week's much-discussed Deal Magazine article, "the comparison is even more valid," @7:41 a.m. writes. "We now know where they were flying to: to make the bond payments. But now they are pouring the gas out to make the helicopter lighter. Will they realize you can't fly without gas?
Please find a buyer.
For all its faults, Gannett did have some smart ideas. And perhaps could have emerged from this as the champion in journalism. It's such a shame."
Word for word, here's my original January 2009 post:
Gannett has been on a journey to an all-digital future from the moment it was founded more than a century ago in central New York's Elmira. But now, our weakened company has begun what may be the most perilous leg -- one it may not survive.
This moment recalls the 1990 Cold War thriller, The Hunt for Red October (trailer, below), based on Tom Clancy's bestseller. CIA analyst Alec Baldwin is aboard a U.S. aircraft carrier, desperate to cross a dangerously vast stretch of ocean. Admiral Fred Thompson says there's only one way: by racing a helicopter, stripped of all unnecessary weight. "A chopper turned into a flying gas can," he warns grimly.
That is what Corporate has been doing at an ever-quickening pace for more than a year now: Stripping Gannett of all but its most profitable, revenue-producing parts, in preparation for this final passage. The restructuring has now assumed greater urgency, following the credit crisis and September's Wall Street meltdown.
We get a fresh progress report on Friday, when media stock analysts expect the company's fourth-quarter financial report will show another double-digit profit plunge. (To be sure, the New York Times Co.'s beat-the-street report offers a ray of hope.) Gannett shares closed today at $7.33, up 29 cents. Still, GCI is down 80% from a year ago vs. a smaller 35% decline in the broader S&P-500 index.
Dismembering you
Far from Wall Street, Gannett's bid for survival has been quietly playing out in a big customer-service call center in Louisville, Ky., serving 22 of the 85 U.S. papers -- mostly in the East. There, scores of operators read from company-prepared scripts this month, describing the slow dismemberment of The Courier-Journal and the 21 other papers -- including the first one, in Elmira.
This poignant chapter in American journalism history is told in an otherwise routine, three-page company document I got from a reader. It's a cheat sheet for operators responding to bewildered and frustrated subscribers, calling from distant places about cutbacks in news and delivery.
But to future historians, the document would help explain the industry's early 21st century decline. They would discover that newspapers didn't all die overnight, much as Corporate just threatened the Tucson Citizen. Instead, publishers morphed into corporate chop shops, stripping their legacy papers of financial and intellectual capital -- piece by piece.
In Louisville, where the Courier-Journal holds 10 Pulitzers, they carted off the crafts column on Jan. 6. In Rochester, N.Y., where Gannett was based nearly 70 years, the Democrat and Chronicle lost a second Friday sports front. Even little Elmira wasn't spared: They cut the Star-Gazette's Monday business page.
And so it went, paper after paper, the operators explained -- from spiking Monday and Tuesday op-ed pages at New Jersey's Pulitzer-winning Asbury Park Press, to Saturday features at The Daily Journal in Vineland. Reduced. Combined. Consolidated. Eliminated. Cut. Killed.
Throwing weight overboard
To be sure, Gannett has taken far more dramatic steps, in stripping down to gas-can battle mode: Dumping 2,200 jobs last month alone. Freezing the pension plan. Writing off nearly $3 billion in assets. Junking presses. Launching ContentOne. Furloughs.
Friday morning, CEO Craig Dubow will showcase all that and maybe more, when he speaks to Wall Street analysts after the fourth-quarter earnings release. The 10 a.m. ET analyst teleconference will be webcast. It's open to the public -- you and me included.
Continuing the recent trend of declining results, analysts forecast a 37% earnings dive, to 81 cents vs. $1.28 a year ago. Revenue is expected to be $1.79 billion, down 5.7%.
Earlier: Revenue and earnings, plus CEO Dubow's commentary, since fourth quarter, 2007.
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.
'The Hunt for Red October'
Here's the theatrical trailer:
Related: More video favorites on Gannett Blog's YouTube page
[Today's front pages, Newseum]
In the aftermath of last week's much-discussed Deal Magazine article, "the comparison is even more valid," @7:41 a.m. writes. "We now know where they were flying to: to make the bond payments. But now they are pouring the gas out to make the helicopter lighter. Will they realize you can't fly without gas?
Please find a buyer.
For all its faults, Gannett did have some smart ideas. And perhaps could have emerged from this as the champion in journalism. It's such a shame."Word for word, here's my original January 2009 post:
Gannett has been on a journey to an all-digital future from the moment it was founded more than a century ago in central New York's Elmira. But now, our weakened company has begun what may be the most perilous leg -- one it may not survive.
This moment recalls the 1990 Cold War thriller, The Hunt for Red October (trailer, below), based on Tom Clancy's bestseller. CIA analyst Alec Baldwin is aboard a U.S. aircraft carrier, desperate to cross a dangerously vast stretch of ocean. Admiral Fred Thompson says there's only one way: by racing a helicopter, stripped of all unnecessary weight. "A chopper turned into a flying gas can," he warns grimly.That is what Corporate has been doing at an ever-quickening pace for more than a year now: Stripping Gannett of all but its most profitable, revenue-producing parts, in preparation for this final passage. The restructuring has now assumed greater urgency, following the credit crisis and September's Wall Street meltdown.
We get a fresh progress report on Friday, when media stock analysts expect the company's fourth-quarter financial report will show another double-digit profit plunge. (To be sure, the New York Times Co.'s beat-the-street report offers a ray of hope.) Gannett shares closed today at $7.33, up 29 cents. Still, GCI is down 80% from a year ago vs. a smaller 35% decline in the broader S&P-500 index.
Dismembering youFar from Wall Street, Gannett's bid for survival has been quietly playing out in a big customer-service call center in Louisville, Ky., serving 22 of the 85 U.S. papers -- mostly in the East. There, scores of operators read from company-prepared scripts this month, describing the slow dismemberment of The Courier-Journal and the 21 other papers -- including the first one, in Elmira.
This poignant chapter in American journalism history is told in an otherwise routine, three-page company document I got from a reader. It's a cheat sheet for operators responding to bewildered and frustrated subscribers, calling from distant places about cutbacks in news and delivery.
But to future historians, the document would help explain the industry's early 21st century decline. They would discover that newspapers didn't all die overnight, much as Corporate just threatened the Tucson Citizen. Instead, publishers morphed into corporate chop shops, stripping their legacy papers of financial and intellectual capital -- piece by piece.
In Louisville, where the Courier-Journal holds 10 Pulitzers, they carted off the crafts column on Jan. 6. In Rochester, N.Y., where Gannett was based nearly 70 years, the Democrat and Chronicle lost a second Friday sports front. Even little Elmira wasn't spared: They cut the Star-Gazette's Monday business page.And so it went, paper after paper, the operators explained -- from spiking Monday and Tuesday op-ed pages at New Jersey's Pulitzer-winning Asbury Park Press, to Saturday features at The Daily Journal in Vineland. Reduced. Combined. Consolidated. Eliminated. Cut. Killed.
Throwing weight overboard
To be sure, Gannett has taken far more dramatic steps, in stripping down to gas-can battle mode: Dumping 2,200 jobs last month alone. Freezing the pension plan. Writing off nearly $3 billion in assets. Junking presses. Launching ContentOne. Furloughs.
Friday morning, CEO Craig Dubow will showcase all that and maybe more, when he speaks to Wall Street analysts after the fourth-quarter earnings release. The 10 a.m. ET analyst teleconference will be webcast. It's open to the public -- you and me included.Continuing the recent trend of declining results, analysts forecast a 37% earnings dive, to 81 cents vs. $1.28 a year ago. Revenue is expected to be $1.79 billion, down 5.7%.
Earlier: Revenue and earnings, plus CEO Dubow's commentary, since fourth quarter, 2007.
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.
'The Hunt for Red October'
Here's the theatrical trailer:
Related: More video favorites on Gannett Blog's YouTube page
[Today's front pages, Newseum]
Dubow and Martore: You must be very proud of yourselves, and you have no shame.
ReplyDeleteThis leaves me gasping for breath.
ReplyDeleteThis also explains the "show no mercy" single mindedness we've experienced over the past two years.
Of course they wouldn't want to share this with us, we would rebel. But by using a cutting torch to the rigging, section at a time the goal is less evident.
As it is, they're hoping there won't be total collapse before their genius will redeem them.
How can a three-page document be a four-page cheat sheet?
ReplyDeleteAnd just how are they instructed to respond to complaints about the slashing of sections, etc.?
Yeah, how are they told to respond?
ReplyDeleteI'd like to know that, too.
Jim: can you post the document?
ReplyDeleteWeep for the newspapers, America!
ReplyDeleteWeep for the newsies, from the people who wrote the stories to the people who delivered it.
Weep for the first draft of history, the inside story, the scoop.
Weep for the Extra edition hawked on the street reporting a WAR!
Newsprint decays quickly.
Our life's work will be gone, sifted like ashes into the landfill.
Can you hear the echo of our footsteps as we walk down the marble stairs and through the lobby one last time?
You just produced a piece that captures the current state of "journalism." You have a document. But you don't give us the news. You screw up the description, or at least confuse us with it. 3 or 4? You make it sound like news, but you don't quote from it or let us read it. You just provide your own commentary. Opinion, in place of news, facts. Nice work.
ReplyDeleteI just found your blog. Very nice work. I am not a fan of Gannett, because they made a shambles of a formerly great newspaper, the Arizona Republic. It now has the distinction of a shrinking circulation in an economy that grew by leaps and bounds.
ReplyDeleteStarbucks profits are down, too. They're closing more stores and cutting 6,000 jobs.
ReplyDeleteBut this is refreshing:
As part of the cuts, CEO Howard D. Schultz will reduce his salary to less than $10,000 a year from $1.2 million.
Think the Gannett potentates considered doing that?
There is still a lot of things to be thrown overboard in hopes of making the distance. Prime among the is the Crystal Palace in McLean, now half-empty office space. There is still a real estate market in the Washington, D.C. area, so the building could be sold and the unused space rented out.
ReplyDeleteOoops: To clarify, it is a THREE-page document; I'll fix that later.
ReplyDeleteI cannot post some documents where I might compromise a source's identity. This is one of those documents.
All this shedding of sum and substance would feel less tragic if I had any sense that the architects of the future knew how to fill the void.
ReplyDeleteI know they plan to have *something* to sell when the corpus is ultimately dismembered, but I don't see it in anything that has happened so far. Maybe just USAToday.com with a bit of local fill and a lot of calendars? Is that all? Is that enough?
Seems to me like the void is money. That void is filled by delivering audiences to advertisers. Nobody has convinced me they've given a thought about what will happen when the audiences tire of the gimmicks and go away.
ReplyDeleteOnce they're gone, they won't come back.
I think it would be easy to do a CIA move on the document and black out the sections that would give someone away. If everyone there (where it came from as in all the phone reps) has it who would it actually give away?
ReplyDeleteMy guess is that you don't really have a copy and you are just sharing something you heard. If you have it, figure out a way to show it or drop it.
Also, you said you had some big news a few weeks ago - what was it?
i thought the webcast was at 1 ET
ReplyDeleteOk here is a thought. Lets put the whole industry in perspective. The New York Times, the same New York Times that is the journalism standard for the world, is hemorrhaging money, losing print readership and cutting back everywhere they can. They just borrowed a quarter of a BILLION dollars at 14% interest to continue to survive. If it is happening at the New York freaking Times, it’s happening everywhere. If the Times leadership can’t turn this battleship around, why do you think we are the only company looking to the web as the future of our industry? Come on people.
ReplyDeleteGannett's culture of dullards and imitators prevents it from becoming a major league player on the Web. The best Web sites are created by entrepreneurs and are bought by the major media/tech companies after becoming wild successes. Those companies know it would be folly to try to replicate those sites. They buy the sure things.
ReplyDeleteSuch as:
News Corp. -- MySpace
Tribune -- AOL minority share. Made a ton of $$ on this.
Google -- YouTube
eBay -- 25 % of Craigslist
CBS -- Sportsline
Washington Post -- Kaplan
And what does Gannett have to show for its money? CareerBuilder is undoubtedly a successful startup, but isn't a runaway with Monster.com out there. Cars.com? If it weren't for the free space in Gannett papers, no one would know what this is. MomsLikeMe? Decent little startup. Metromix? Way too early. Cozi? Kinda late to this game, isn't it? PointRoll? Huh, whazzat? HighSchoolSports? This one looks pretty good. ShopLocal? Get real. This is a throwaway. Topix.net? What a flop.
Not exactly any home runs here, and from what I've read, all or most of these sites are severely handicapped by technology issues, issues created by Gannett's insistence on using questionable in-house technology.
I have always felt of GCI has the Good Ship Lollypop, not the Titanic, largely because I am tired of the rearranging deckchairs on the Titanic schtick. There is a hell of a lot more to be thrown off this ship to make it go the distance, and I have a feeling deep in my gut we will hear the worst possible news when Dubow unveils the last quarter report.
ReplyDeleteFor the poster on the New York Times, please note that GCI is a much more national chain that should make it more protected from regional recessions.
anon 8:19 ... the NY Times is the "journalism standard for the world"? WHAT? Did you ever hear of Jayson Blair? Or read the poorly sourced "investigation" alleging John McCain had an "inappropriate relationship" with a lobbyist that was so full of holes and factually inaccurate, any newspaper editor in college wouldn't have OK'd it for publication? A lot of people don't trust the NY Times, and that's part of their problem. I can't believe you would think they are the "journalism standard."
ReplyDelete8:32 Scripps also had a runaway success with HGTV and the Food Channel, both of which it created from newspaper revenues, before spinning them off as a successful company last year. Cox and Time magazine made fortunes in starting up cable companies.
ReplyDeleteThe GCI brains could have done any of those things, but did not. They could have piggybacked a USAT TV on top of USAT as an early CNN, but didn't. The trouble with GCI's Web sites is they don't attract a large enough number of eyeballs to make a difference. A lot of tiny sites make tiny revenue, which I suspect Dubow will acknowledge when he talks to analysts about GCI's miseries.
I can't wait to hear about the dividend...because if they fire thousands of people, slash newspaper sizes while hiking prices, and force all employees to take a week off without pay (while freezing salaries in many places as well) AND THEN THEY DON'T CUT THE DIVIDEND...well, it's time to march on the palace. It's nice to know that I'll have my pay cut 5% this year so stockholders (and Gannett fat cats who get stocks/stock options) get paid.
ReplyDeleteCouldn't happen to a more deserving clutch of corporate clods...Rob Mennie, you are a marketing genius, not!
ReplyDeleteDon't forget the forgotten Daily Advertiser in Lafayette, Louisiana. Pub. Leslie Hurst, in her vast wisdom, cut the Monday and Tuesday papers first to two sections -- then recently down to one. It was a measly eight pages on several days. This is what used to be a decent medium-sized newspaper serving a 500,000 populated region. Couples who used to have the morning ritual of "sharing" sections of a newspaper had that ritual ruined. There was only one section. No way to share that. Leslie Hurst has no shame and has has left a trail of tears along the way of her Gannett journey.
ReplyDeleteOk 8:50 then what is the standard? Come on big shot tell us oh wise one. What traditional newspaper is the best? You know you'd give your right nut to work there.
ReplyDeleteNever fear kids Evan Ray to the rescue!
ReplyDeleteThe trouble with Gannett's Web sites is that they all duplicate the successes of others. CareerBuilder copied the success of Monster.Com, and both Metromix and Moms sites are fractioned pieces of Facebook.
ReplyDeleteThere is nothing wrong with copying the successes of others, but these sites have a long way to go to catch up to the front-runners. GCI needs an original thought for a Web site, not just stealing the ideas of others. There's no originality in this company, and you can read through this blog to find out how that is really dragging this company into the crapper.
Wow 6:01, what poignant words. I wonder if you're at my site? We have marble stairs in our beautiful old building. That's suffering greatly from lack of care and cleaning.
ReplyDeleteUnfortunately, a lot of what's going on is clearly showing an amount of mismanagement from corporate leaving in question the ability of the company to survive at all in a couple years. The coming cuts are at the direction of corporate for each property to reach an expense/revenue balance by either increasing revenue or decreasing expenses and we know where that's headed. Too bad ContentOne and all the crazy announcements of products that will change the future haven't changed the future yet. Further examples of the disconnect corporate has with the industry and reality.
ReplyDeleteTo 11:38 a.m. - Couldn't agree with you more. Remember "News 2000" from the early 1990s? This company has been addicted like a crack addict to bad. Remember the no-page-1-jump rule? Remember the old saying, "Gannett makes a poor newspaper good and a great newspaper good." Remember the old saying "Gannett" instead of "Good night" at day's end? That's what this company is becoming: a giant yearbook of memories.
ReplyDeletecorrection: bad "ideas" in above post.
ReplyDelete10:11 and 10:26 are two more examples of the anonymous clods who pollute the Internet with their gutless insults.
ReplyDeleteMany times at Gannet I more think of it as this quote. I get an assignment that comes across my desk for a marketing and design project and I think of this line.
ReplyDelete"Someone must really have a burr up there a$$ to go for a stunt like this."
I think that line is a good description at some of the decisions that are sometimes made in the name of creating new ad revenue.
6:22 the reason the CEO of Starbucks lowered his pay is because in the long run he'll be able to make up for it. The top executives at GCI won't do that because they don't see long term prospects for the company. Based on financial reports and an overview they have, they're probably looking at 2 years more. Why reduce your pay for a foregone conclusion? Even worse, I'll bet if they lay off enough people by the end of 4th quarter, they'll all get healthy bonuses!
ReplyDeleteFirst let me clarify a few miscoceptions and facts in Jim's initial post. The call center in Louisville is one of three regional call centers that gannett operates for its daily papers. Louisville's newspaper base is 42 newspapers not 22. Second all newspapers can be transferred accross any of the three sites depending on call volume. Also the so-called three page document that details paper changes did NOT come from anyone in the center because it does not exist. I challenge you Jim to publish the paper redacting any information that could identify someone, my goal is not to get that person in trouble but to clarify any misinformation that is out there. I do not want to expose your source but just ensure the accuracy of your information. The folks who work in all three centers care deeply for the customers at each and every paper, and work tireless hours while absorbing the same pay reductions and furloughs and really take the abuse of not only the customers but the abuse of misinformed and judgemental posters through out this blog and countless others. Jim I believe you are doing a true service to everyone but also need to ensure your sources are acurate and factual.
ReplyDeleteThe front-line call center workers are doing their best. But that doesn't excuse a bone-headed idea: starting with the name: Center of Excellence.
ReplyDeleteThe document can't be redacted to a degree that leaves me 100% confident my source willbe safe.
Sadly, the legacy of the HP boardroom spy campaign is this: technology allows companies to embed software in electronic documents for the purpose of tracing the chain of recipients.
post a picture of the document.
ReplyDelete