Thursday, February 26, 2009
Breaking: Moody's downgrades GCI bonds to 'junk'
The ratings agency cited further erosion in Gannett's finances, Reuters says, a day after the board of directors slashed the dividend a steep 90%. I think this means that the Washington Post Co. is now the lone newspaper publisher offering investment-grade debt. Brief iPhone post; will update. Comment, below, please!
32 comments:
Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."
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thanks sue...thanks gary...
ReplyDeleteAwww, crap.
ReplyDeleteAll the bashing going on here one would think more people would rather see this stock go UP than rejoice in seeing it go DOWN.
I think people kind of root against the company because they want their very legitimate observations and complaints validated in hopes of eventually improving their work environments. If stock was going up, there would virtually be no opportunity in the mind of these people to have things fixed. Everyone at the top would be content as problems would stay swept under the rug. The declining stock represents and opportunity for real change. Those who can change things have to take notice and have to do something.
ReplyDeleteQuestion is, will they do the right things? There is some serious doubt about that. A real lack of confidence. For instance, when USA Today's credibility was shaken after a couple journalistic scandals several years ago, the brain trust decided that what the paper needed was a good consultant (Gallup) to come in and do surveys and workshops. With that initiative, it was clear that top management was clueless as to what was going on in the newsroom and how to fix it.
The problems with Gannett are bigger than that problem at USAT. So it doesn't seem likely that those in power will find solutions. They are too disconnected from the everyday folks and the problems that have festered for many years.
To make matters worse, we've lost a lot of good people lately. Real advocates for change. They left on their own when it was clear nothing was going to really change anytime soon. And others were booted out of here during the layoffs because they were seen as malcontents for speaking their minds. What we're left with is a bunch of silent lambs.
During a time when we need real passionate thinkers, experienced hands and open dialogues, we are left with, well...I don't need to to explain or name call. You know what we're left with.
who's rejoicing?? just thanking the two primary people that got this train wreck rolling down the mountain side before they threw the controls over to Dubow...
ReplyDeleteRejoicing? Not hardly. I am scared.
ReplyDeleteAlthough "junk" status doesn't always imply that a company has transformed into a heaping pile of stinking garbage, I think it's a fair description of Gannett.
ReplyDeleteNo rejoicing, but a certain sense of satisfaction that the people who in large part caused the decline and *STILL* don't get it are somehow reaping what they've sowed.
ReplyDeleteThey have ignored the employees and readers for years, promising that their changes would result in better newspapers, increased efficiency, and rising readership.
ReplyDeleteFAIL!
Who is celebrating? This elevators cable is broken, the company is going under, and someone is complaining about those inside are screaming that something needs to be done before we all crash. This company's business plan is broken, and neither Ripple6 or ContentOne is going to save it. The stock price reflects how dire our situation is.
ReplyDelete3:22 One could characterize your comments as short sighted, reckless, or as down right idiocy. You say that you root against the company you (likely) work for because you want someone to hand you a pacifier and pat you on the head and tell you how smart you are, and in doing so improve your work environment.
ReplyDeleteBy way of analogy, that's tantamount to a pissed off flight attendant wanting--and indeed cheering for--her plane to crash, all so that the world could see that the pilots sucked. Guess what... at the end of the day, you're either dead or out of work.
You seem to think that stirring up malcontent has no consequences, but you forget that the institution that you are railing against is not some unflappable bureaucracy carved in stone, but a venerable company trying to be as nimble as possible in some of the worst economic times that any of us have seen in our lifetimes.
The unfortunate part is that it's people like you that ensure the plane will crash before it's even taken off. Your obstinate insistence to harbor ill will against the very board members and managers who are fighting for the future of your career and livelihood is not only crass--it's just plain STUPID.
Perhaps you, and people of your ilk, are the ones who are hindering real, meaningful transformation in offices and news rooms (or information centers) across the company. You say that there is a lack of confidence; I ask you where that confidence comes from. Does it come from stubborn, seasoned employees that can't adapt to change and sit around and cry for their pacifier, or does it come from on high?
When will you stop pointing your finger at others and realize that the change you seek begins with you?
@5:09 There are major problems within the ranks at Gannett, but suffice to say those problems have only been allowed to fester and grow by those at the top. The same people who have zero vision into how to transform the company into the 21st century.
ReplyDelete(no I'm not @3:22)
The only ones rooting against the company are current and former employees of the New Jersey newspapers.
ReplyDeleteThey're the most bitter, the least sympathetic and would gladly see Gannett go bankrupt just so they could say "I told you so!"
Many of the rest of us are heartsick at the state of the company and are praying that it will survive and prosper.
heartsick? you need to have your head examined.
ReplyDeleteWishful thinking, 5:26. You apparently don't read the Gannett Blog if you think discontent and bitterness is concentrated in Jersey. The problems are deep and stretch across this entire company, even to Newsquest.
ReplyDeleteAre you really that thick?
What surprised me about the Moody downgrading is the analyst's suggestion that we are facing TWO more years of this misery ahead of us. Moodys doesn't see a turnaround in GCI until 2011. I have not read that before. I don't know if I can stand two years of this.
ReplyDeleteIt also says that GCI can forget about drawing more debt to buy its way through this problem. I think that means only more devastating cuts and service reductions.
Here is the analysis:
"The downgrade reflects Moody's expectation that changing media consumption habits and the heightened level of price and volume competition that Gannett faces as it seeks to monetize its strong local-market content positions in its traditional media and newer digital distribution channels will continue to erode operating cash flow. Moody's believes these pressures along with a deep cyclical slowdown in advertising spending and high operating leverage will lead to a weakening of credit metrics to speculative-grade levels for at least the next two years despite revenue-enhancement initiatives and significant cost reductions. Gannett's 90% dividend reduction will help cushion the pressure on free cash flow from operating declines and allow for meaningful debt repayment in 2009 and 2010, but is an indication of the near and long-term operating challenges. In Moody's view, the operating pressures are also diminishing Gannett's traditional ability to mitigate increases in leverage during cyclical downturns through debt reduction, a factor that in the past had supported a higher rating."
I think 3:22 made some good points 5:09,that you seem unwilling to acknowlege. The sites have been stripped of many good people and those left are struggling to just survive with the extra workload. I don't see how Gannett can come out of this successfully.
ReplyDelete5:09. A little dramatic, eh? Pilots wanting plane crashes? I don't think that reflects what 3:22 was saying at all. You totally misread his/her comments.
ReplyDeleteIf you want to make an aviation analogy, it would be like pilots wanting the FAA to discover some flaw that needs to be corrected and wouldn't have been if the FAA didn't uncover it and the media didn't expose it. Without the visibility of stocks falling, it would be unlikely that Gannett would do any repairs.
So the point is, that there is a silver lining in stocks falling and a logical connection to people believing a little pain now will prevent a lot of pain later. It forces Gannett to address longterm issues that were neglected during the good times. As employees, we all know what some of the failings included.
You are seemingly the type who never wants to hear or acknowledge things are wrong within the company you work for, much less look for signs of things being fixed, so I am not even sure why you or anyone like you reads this blog. No one is stirring up the malcontents as you say. Malcontents don't need help with that. But there are a number of well-intentioned people who don't want to stick their heads in the sand either. They are exhausted from trying different approaches to get a fair hearing and for someone to take their concerns seriously. If it takes falling stocks to mend all that is wrong, then so be it. No one is going to die from stock prices dropping. But maybe someone will begin to understand that business as usual isn't going to work anymore. If they respond appropriately, then ultimately our jobs and work places will be safer and better.
Do you get it now? Are you the one who is short-sighted or just plain naive.
Gannett needs more whistle-blowers and less of you and your cliches about people needing to fix themselves -- like there is nothing wrong at all with this company.
You are the ultimate finger-pointer -- the very thing you seem to think we are all guilty of. Your world consists of black and white. You can't see the shades of gray and why people might find some hope even in bad news about stocks. You seem to believe that one must love Gannett or leave it. And simply by loving it, all will work out, huh?
I just can't believe you Kool-Aid drinkers show up here so often. It must infuriate you to read other opinions on this blog. Yet, you keep coming here. As you did, you guys all resort to name calling of us and anyone who doesn't support GCI's every action. You actually go as far as to imply we, the folks who have a broader view, are what is wrong with the company. Unbelievable.
Wow, I can't believe 5:09's reaction to 3:22's comments! Talk about finger pointing. Whew, scary that people like 5:09 even exist in this company. I for one thought 3:22 made some interesting comments. And 5:09 calling out "stubborn, seasoned" employees... Hey, I and other seasoned employees helped build this damn company. And if there were more seasoned employees around still, they would have helped pull us out of this mess! Instead, we have 5:09 and everyone like him or her.
ReplyDeleteIronic that the stock is going down after all these layoffs. According to 5:09, the seasoned people who were let go were part of the problem. So now that they are gone, why is there a bigger problem? I would suggest that 5:09 is the problem. His or her thinking is parochial at best. We're trending in the wrong direction.
It's your ship now, 5:09, lets see what you and those who share your beliefs can do. And just for the record, let me remind you what we seasoned folks did to build the largest newspaper company in the world and the largest circulation paper in the country. They worked their asses off. Through a healthy dose of cynicism and dealing in realities, they did incredible things that you and your kind, or which I hope there aren't too man, will most likely never repeat.
One more thing, 5:09, that crap about pilots wanting to crash their planes being the equivalent of folks on here wanting Gannett's failures to be exposed, is a bunch of bull and shows signs of a very unseasoned mind.
Go create a pro-Gannett blog where your juvenile theories will get better responses.
I think 5:09 is what is WRONG with this place! I completely concur with 3:22 and others who have knocked what 5:09 said. I am glad GCI is getting the bad press right now, or whatever you want to call it. Fingers should be pointed at GCI, even if it means stocks fall. It's long overdue. Not because I want to crash a plane (gosh, what a moron 5:09 is), but because for the first time I feel that there is a possibility that longtime wrongs will be righted and maybe this company will improve and avoid layoffs of good people in the future.
ReplyDelete5:09: whether you like it or not, 3:22's assessment was right on about how a lot of people feel. Secondly, Gannett is no democracy. In fact, I was often told that by a newsroom boss when I used to work for the company.
ReplyDeleteWhen will people like 5:09 realize that this blog isn't a good place for them? We are not malcontents, but we do have a right to express our opinions, here and elsewhere. For years, Gannett prevented us from speaking out. Now that silence is over. Stocks are falling. Solid employees were lost. Questions are being asked. Some are being held accountable. And we have a great blog thanks to Jim to air our views on all of this.
ReplyDelete3:22 was dead on correct.
ReplyDeleteChalk me up for supporting 3:22's views. On the other end, 5:09 is absolutely off base. Both have a right to be heard, but 5:09 comes off sounding like a bitter and shallow cheerleader who can't believe some criticized her hair. Nothing really substantive in 5:09's comments. Some name-calling, I guess, and some pretty transparent hatred of folks a little older and more experienced. Even worse, he or she totally missed the point of what 3:22 said, which makes me wonder about who this might be and what their intelligence level is. Pilots, crashing, dead passengers? C'mon. Gotta do better than that.
ReplyDeleteWhat does this MEAN for us, though? GCI bonds are junk. What does that MEAN, practically speaking?
ReplyDelete6:44 It means higher interest rates because the bonds are of more risk of default. That, in turn, means GCI has to allocate more of its annual revenues to debt payments. The debt rating is a measure investors use to determine how likely companies are to pay off their debts.
ReplyDelete6:44 Read what Moody's says about this, which 5:45 posted. Cutting through the verbiage, it makes it highly unlikely GCI can make any further use of the debt markets to raise money. That means GCI is so weakened it won't be able to buy any more newspapers, even though they are at fire sale prices.
ReplyDelete5:58 wrote: I just can't believe you Kool-Aid drinkers show up here so often. It must infuriate you to read other opinions on this blog. Yet, you keep coming here. As you did, you guys all resort to name calling of us and anyone who doesn't support GCI's every action. You actually go as far as to imply we, the folks who have a broader view, are what is wrong with the company. Unbelievable.
ReplyDeleteAbsolutely correct! Couldn't have said it any better. It is really unbelievable how the "upper crust" at Gannett sees their own employees. Nobody else other than "somebody in charge" could have written such flaming nonsense! And to top it off the employees are told "it's the economy, stupid!" why Gannett is failing. Well, it's always easy to point the finger somewhere else when Gannett is tanking (when in fact the decline is going on for years). May I remind these "supporters" that it's us, the working class, that makes it possible for them to earn a living. And that includes the co-workers that were led go, because the quota on bonuses and "golden parachutes" had to be satisfied.
To 5:09 p.m. The word "newsroom" was, is and always will be one word. It's obvious you don't get it. 3:22 p.m. was spot on. You are not.
ReplyDeleteWhatsa matta, 5:26? Did a Jersey Girl break your heart?
ReplyDeleteBravo 3:22! I agree and relate. I'm former Gannett and left on my own two years ago after nearly a 20 year career. Very happy I left when I did. The company is not the same company it was five years ago. To much emphasis on the bottomline. No tolerance for risk or new products. During the development of niche products, profitability was expected within 6 months. Working for an independent newspaper group now, where we are able to run the company and make the decisions. We are successful and doing better than comparable Gannett sites.
ReplyDelete"When will you stop pointing your finger at others and realize that the change you seek begins with you?"
ReplyDeleteMeaningful change can be instituted when Gannett starts hungering for the news and opinion pages again, not turning them into Orwellian hunk o' junks like "Community Discussion" pages and Information centers. People want HARD news, not content, you G-corporate-twits.
From MediaDailyNews.com this morning:
ReplyDelete"One-Two Punch: Gannett's Credit Rating Labeled 'Junk'
by Erik Sass
Gannett Co.'s credit rating has been downgraded from investment status to "junk" status by Moody's Investors Service. With the decision, virtually every major newspaper publisher in the country is now designated "junk" for credit purposes, meaning it will be difficult, if not impossible, for them to borrow money."
So, dear children, our demise not only jeopardizes our jobs, but the jobs of others.