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Friday, July 03, 2009
68 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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How can they cut 100 jobs in Cincy without closing products or bureaus? Or is that the plan?
ReplyDeleteI really feel for the hard working people at Gannett. You know the people who have been the backbone of this company for many years.They certainly deserve better.
ReplyDelete>>> If a vendor/creditor/potential employee Googles the company's name, Gannett Blog is a very high result. The truth outs.<<<
ReplyDelete-------
I didn't see Gannettoid at all after I googled Gannett. Gannett Blog is #4.
Gannettoid is nearly new. It took more than a year before I saw Gannett Blog rise in the search results. Give the guy a chance, or you'll lose him, too.
ReplyDeletewhat's up at the courier post?
ReplyDeleteWoke up this morning wondering - is there an elephant in the room?
ReplyDeleteIs there something bigger than layoffs going on here? Lots of clues for employee-paranoia-conspiracy-istas:
- Dickey headlines his memo with reference to "restructuring"?
- Severance terms are "outsourced"?
- CEO exits on "medical leave"?
- Cranked up anti-Jim noise quiets down as soon as markets close?
- Director's name plates removed from reserved spaces in parking lots?
Is Gannett about to break into pieces for a pre-planned fire sale?
For a mini view of all that's wrong in Gannett, scroll down to "Phoenix | Severance packages said 'outsourced'". The Editor fired people saying he was "surprise". How can the Editor of Gannett's largest daily fire people being anything other than prepared. I hope the press picks up on this- "Gannett takes itself by surprise when firing people. Editor taken by surprise by something widely discussed for weeks"
ReplyDeleteThe anti-Jim comments have died down, but not completely. You're just not seeing them, because it's the the same old crap. Thoughtful criticism us encouraged; repetism isn't.
ReplyDeleteI am confused by Randy Lovely's reported comments in Phoenix yesterday that these cuts are needed to pay off the debt. If true, that is the first anyone in this company has talked about the debt. My problem is that the dimensions of these reductions are not going to meet the debt repayment problem. Some $720 million is coming up for repayment next year, but my back of the envelope math indicates a 1400 cut is only going to produce about a $70 million (assume average $50,000 salary and benefits times 1400) saving a year. We are six months into this year, so that is about $35 million made available for debt repayment. But corporate must be assuming profits are going to stay the same. That clearly won't happen if you fire ad sales people, because they bring in income. All reductions affect revenue because people get fed up with the reduced news coverage, or marketing efforts are no longer made, etc., etc.
ReplyDeleteMy conclusion from all this is cuts aren't going to produce the sort of money they need. This debt issue is falling on corporate like a ton of bricks. They are going to have to sell properties and downsize dramatically. So I believe this all is the opening round of huge changes at GCI. Then there is the issue of even larger debts coming due in 2012.
I also note the anti-Jim noise calms down after the markets close. Is this real, Jim? Or are you killing messages without the normal post telling us a message was removed?
ReplyDeleteYes, I also still don't see how they can pay down that massive debt.
ReplyDeleteThe awful thing about the debt is that it got there in the name of greed ... having to buy back all of that stock and paying excessive amounts for properties.
While I'm no longer with Gannett, I do take a peek at the blog every once in a while to see what current and former employees and colleagues are venting about. Yesterday, the blog owner suggested that Gannett's current problems are associated with decisions to acquire Central (Phoenix, Indy, etc.) and aggressive share buy-backs.
ReplyDeleteWhile, with hindsight, the latter now seems imprudent, Gannett and most growing media companies had long standing stock purchase programs that would reward shareholder owners by reducing outstanding share quantity. The New York Times Company was actually even more aggressive with their stock buy back program than Gannett on a comparable market valuation basis.
On the other hand, the notion that Gannett's purchase of Central led to current problems is flawed on every count. Both the timing and purchase price proved to be shrewd both on an ongoing return on asset basis as well as immediately accretive on both cash flow and EBITDA that has continued through today's current difficulties. Or put another way, the Central acquisition has already paid for itself (the net cash flow generated by the properties purchased have already covered acquisition costs completely).
Had the blog owner noted the more problematic acquisition of Newsquest in the UK which resulted in an asset write-down last year in his analysis of Gannett's relatively modest debt load, that would probably be something worth discussing or arguing about.
But then again I visit the blog to see what folks are venting about in a pretty good forum created by the blog owner and not his relatively limited analytic skills.
9:38 brings up a great point. Now that a Gannett senior person, (in this case editor of their largest daily) mentions debt, it now becomes fair game to look at and yes, these reductions not only don't make a huge dent, but probably barely cover the expected additional losses the company will incur in the next year due to sliding revenues. I think what Dickey mentioned regarding restructuring is what will clearly be nothing more than a shell game going forward. Let's face it, other than layoffs what role or plans has corporate enacted that anybody thinks will be a value? ContentOne? 1,400 layoffs won't cover the debt and certainly won't help the product. Look for announcements of restructuring, great plans for consolidating, minimizing duplicate roles and positions all to make the company more efficient. Absurd! If this was true, management would have done it sooner. Same corporate management, same poor economy, same poor decisions. We're about to witness a huge shell game in lieu of actual ideas and plans. The shell game will also allow them to "find" more positions that can be eliminated which I suspect will happen this year as debt cannot be met.
ReplyDeleteJim- You've done a great job with this blog and I completely support your shutting down the 10th although I'll miss it. Perhaps people will reach out further into the web to vent and share. You've created a visibility and acceptance as seen by Reuters' and other respected outlets covering the news. Thank you.
10:11 sounds better informed, so I'm happy to defer. (I doubt your John Curley, though, based on the Newsquest reference.) I necessarily cover the waterfront, so am stronger in some areas.
ReplyDeleteBut: Phoenix has become real estate's black hole. Might we not see another big writedown on July 15? And now Indiana's economy is sinking with the auto industry. How much can the Indy Star's Michael Kane do before there's a big writedown there, too?
The board of directors is a disaster. Neal Shapiro is risking his good reputation by not resigning, or failing to organize a putsch group to oust Dubow and Martore. Shalala and Williams have all but abandoned their fiduciary responsibilities.
ReplyDeleteAnd Dubow had the crust to answer my question at the company meeting about Williams's role on the audit committee -- by saying she'll serve another year!
But, then, he's had other things on his mind, eh?
I am looking for GCI to announce soon it is dumping Newsquest. It has become a black hole that is sucking in money. Who came up with the bright idea of buying tiny papers in the UK where there are 13 national papers fighting each other for territory? The UK also is a market where big mass ads aren't an established medium, and the country's economy is in truly horrible straits. The collapsing pound-dollar ratio means even greater losses, and this company is in now clearly the hands of bottom-liners.
ReplyDelete10:11 a.m. back (not Curley and never part of GCI top mgmt)--you are right in noting the Phoenix real estate collapse and Indy's manufacturing difficulties that have reduced profitability in both markets...but on a relative basis, pale in comparison with both the problems in the UK and even bigger problems in Michigan (a real bad swap with Knight-Ridder that gave Gannett 80% of Detroit and cost the company pretty good markets -Boise, Bellingham and Olympia in the trade--more likely further asset write-down in Michigan than in the Central properties where goodwill has already been covered with revenues and profits since the acquisition.
ReplyDeleteMr. Dickey, you left for the long weekend with two calls on hold. Line 1 is Wall Street wanting to know how you expect the announced layoff to in any way improve the current situation. Line 2 is every Gannett employee wanting to know how it will improve theirs.
ReplyDeleteJim,
ReplyDeleteCan we call what the furloughs acutally were?
An audition for your job essentialness to determine who will be fired on 7/8, and they saved themselves money while conducting the auditions and doubling, tripling or quadrupling your workloads for the same pay.
THIS WAS THE PLAN ALL ALONG!
The darts journalists take from corporations are traditionally arrogant and mean-spirited.
ReplyDeleteMatt Taibbi recently wrote a fabulous dust-up of Goldman Sachs in Rolling Stone (http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine) and every journalist should be watching the fall-out. Time calls it a smack-down, and they're right: http://www.time.com/time/business/article/0,8599,1908562,00.html?iid=tsmodule
The author's blog:
http://trueslant.com/matttaibbi/
Any word on executives, vp's, directors and managers being shown the doors yet? Here's hoping the rumors are correct in their predictions that this time, a lot of the aforementioned employees go first.
ReplyDeleteWelcome, Matt and Matt's agent!
ReplyDeleteLayoffs don't pay down the debt. But they do increase profitability. The profits are used to pay down debt. That's how they rationalize it.
ReplyDeleteHi Jim all that dedt they have how many new presses did they purchase in the last 5 years.I know that piece of crap KBA the Couier Journal had installed cost 90 million
ReplyDeleteI still don't understand why in the world that miserable company didn't put more into the retirement funds over the past few years. Just silly. Plain silly.
ReplyDelete9:38 -- I think you're right. But the cuts might help a little more than you think.
ReplyDeleteFirst, your average salary target could be off. It is widely rumored that they are targeting higher-paid employees, likely putting the savings at more than $75,000 per person. A $60k per year employee probably actually costs more like $75k to $80k, and there are plenty of people making far more than $60k in Gannett.
Also, GCI just cut broadcast salaries across the board. That will lead to additional savings. Finally, anyone who believes the company will not make additional cuts at USAT and Detroit must be living with their heads in the sand.
From Connell's response to major media, you really get the sense that she's trying to play numbers games to discredit Jim and make people think things aren't as bad as they are.
Bottom line: The layoffs and cuts will likely be dribbled out over time between divisions, and they will be continual.
I agree with you that it's probably too little too late but this seems to be the strategy.
Also, it's not surprising that corporate would think it can maintain the same profit margin despite mass cuts. Look at the history of the company. Upper managers have never seen real value in talented people. The products don't contain much journalism anymore. They are venues for stories that are supposed to reach specific demographics so sales people to sell to likely advertisers.
This type of bullshit never works because people see that it's watered-down bullshit. But it's what we're up against.
10:41 - as a Newsquest employee I would personally be delighted if Gannett sold off their UK operation - assuming it could find anyone to buy it, as they've run the papers into the ground in this country as they have in yours.
ReplyDeleteBut in point of fact: the pound has risen to a six month high against the dollar and has now strengthened to £1=£1.64, after a pretty spectacular collapse at the end of last year.
It is difficult to establish the relative profitability of the UK titles against the rest of Gannett's operation, as the figures are not separated. Most, I suspect, are still somewhat profitable, although certainly now provide nothing like the 30% profit margins Gannett extracted from them until relatively recently.
The company is indeed in the hands of the bottom-liners - but I'm not certain I believe your assertion that the UK economy has suffered very significantly more than the US in the aftermath of so much global financial mismanagement.
10:11 -- You sound relatively well informed but doesn't your analysis work only if shrewd management continued beyond the purchase?
ReplyDeleteIf, indeed, the cost of Arizona, Indy, etc., was covered long ago, why is the company still swimming in debt? What happened to the revenue those properties generated? If GCI simply bought them and bled them for several years, never reducing the debt load, that doesn't seem so shrewd.
It does, however, sound like the way this company operates.
11:08am: You are so, so right. And, worse, because we had to prep people to do our jobs while we were out, it made us seem even LESS essential.
ReplyDeleteJim: I want to thank you for all the time you've spent translating the rumors into relatively-dependable information. Gannettoid is fine, but I really appreciated having you around to help funnel the information and make it digestible in the way that an open forum really can't. I wish you the best in whatever you do next.
-a Gannett TV employee
Jim wrote: "Thoughtful criticism us encouraged; repetism isn't."
ReplyDeleteHA! Good one!
How can you Outsource the severance packages? Someone explain, please.
ReplyDeleteAmir: If you, or someone else, know SEO well, I'm open to the help. The site ranks high when you add furlough or a few other words, but not just gannett.
ReplyDeleteHelp? news@gannettoid.com
Wow, a lot of insightful, meaty commentary here today. A refreshing change from the mean-spirited diatribes that unfortunately have been so common lately.
ReplyDeleteThis blog has always been at its best when actual news is occurring.
I suspect old man Pulliam's heirs thank their lucky stars the day Doug McCorkindale came calling.
ReplyDelete12:05 -- The same way Gannett outsourced all of our benefits. Note that Hewitt handles our medical and 401k.
ReplyDeleteThat doesn't mean Gannett isn't paying for the severance, it means they've outsourced the management of the packages ... just like they are outsourcing our jobs.
Almost $500 million in debt looked very modest in a company that had a net worth of $11 billion based on its stock value. But it looks very large today when the net value of GCI is less than $800 million.
ReplyDeleteI think what happened is that corporate didn't think the debt was a really big problem and ignored it during the boom years when they could have easily paid it off.
Ignoring the debt has now turned out to be a historic mistake. The failure of GCI to renegiate the debt, plus last year's truly reckless decision to draw on the standby $1.5 revolver are major financial mistakes. The revolver (standby and pre-approved borrowing power) was there for emergencies and if they had not drawn it down, it would have been available for next year's debt repayment crisis. There would be no crisis if the revolver were still there untouched. There would be no crisis if GCI had paid off the long-term debt instead of buying the stock back. They could easily have paid off the debt, or renegotiated it, then continued with the stock buy-back.
p.s. I expect corporate will take Randy Lovely to the woodshed over being so frank about the influence of the debt problem over the current layoffs.
And under the heading of unfinished business: I wonder if Gary Watson would like to take back that shitty look he gave me in Boise, back in the summer of 2005, when I asked him about the wisdom of concentrating yet more resources into newspapers. Netscape went public that year.
ReplyDeleteWe tried to find out who was going to be laid off, but were told they couldn't say yet, in fact, corporate did not want it told yet, but the news had come out, so they had to say something early. So why not go ahead and tell the people, instead of making them wait until next week? Someone needs to lay off Dickey and Martore.
ReplyDeleteIt's not just the debt crisis. An issue close to my heart is the viability of the pension plan, and next year GCI is going to have to put about $100 million a year into the pension plan to bring it up to where it should be. Of course, GCI could get forgiveness of this payment if it went for bankruptcy and turned the plan over to the PBGC, which I think would mean retirees would get about 20 percent less in monthly payments
ReplyDelete12:22 makes good points. Lots of 2-income households have hit the same problem the last year when they became 1-income household and suddenly the credit card debt became unmanageable and the home equity line of credit came due and couldn't be rolled over etc. Never saw it coming.
ReplyDeleteDrawing down the $1.5B left on the revolver was a bad move -- but remember in Dec. the commercial paper markets had frozen and GCI had a lot maturing each month. Who knew when they would thaw? Maybe Martore panicked and made an amateur's mistake but what would you have done? At least paying off the commercial paper bought time and avoided technical default, which would have given GCI's long-term lenders more leverage to push it into Ch 11 and reap a fat profit off their mountains of GCI credit default swaps.
Hey, they ruined everyone's Thanksgiving holiday last year and now they are spoiling the Fourth of July festivities. Thanks a bunch.
ReplyDeleteHey Jim, re: Netscape--
ReplyDeleteDidn't you mean 1995, not 2005?
That's when Netscape went public:
http://www.fundinguniverse.com/company-histories/Netscape-Communications-Corporation-Company-History.html
Hey Mr.Garson how are those flat screen TV,s maintenance installed in your new house last Christmas doing
ReplyDeleteD'oh! Yes on 1995; posting from an iPhone is challenging.
ReplyDeleteGannett historians take note: accompanying Watson at that Rodeway Inn breakfast meeting -- what a way to start the day! -- was his eventual successor, the elfin Sue Clark, herself. Curley and McCorkindale were lurking about somewhere else. Loved those on-sites!
By 2005, I believe Watson was consulting for McClatchy, maybe? I think he lives near Neuharth and the famous Pumpkin Center in Cocoa Beach, Fla. Don't know whether he still writes his $1,900+ per USA Today column from a treehouse there, however.
Layoff-related questions:
ReplyDeleteWhich Gannett papers are requiring that staff attend traing classes on using Twitter?
What are classes like? How long are sessions?
Any handouts you can post/supply?
Is there a requirement that staff now Twitter? How often? Under what circumstances?
What would I learn that's different than just doing it myself?
I heard that Lansing Mi cuts will be around 35.
ReplyDeleteFrom: Current Employee
2:14 certainly puts it front and center: My critics can't stand the fact they're boys are getting shown up by a gay guy.
ReplyDeleteNo more swanning around lily-white La Quinta, Calif., in their favorite pink golf shorts because the good ol' boys now snicker at 'em at the clubhouse.
I wonder if that round with Bubba Watson the golfl pro was worth the $25K Dickey tried to expense? I'm still waiting for iron-clad proof that he actually repaid the company. Because right now, all we've got is that sad statement from Connell.
And you guys call me queer.
Wow.
Jim, here in Louisville we've held two "Twitter Twaining" classes (love the name, huh?). It's very innocuous, and completely voluntary. Reporters are urged to use Twitter as a news gathering tool, and also to direct traffic to our Web site. It is generally acknowledged that Twitter won't save us, but personally I think it's good whenever we have training sessions. They don't happen nearly often enough, and it's been a professional development desert since the last big thing -- videos -- which have now almost completely died out.
ReplyDeleteThanks, 2:58 pm. I really like Twitter, and have specific uses for it. I hope to get back into it after I've got more time. I like it as a mobile application. It's kind of like writing haiku.
ReplyDeleteWhen the opportunity presents itself, Garson will show an appropriate level of regret and concern. He'll describe the departing in carefully parsed words as having done "great work."
ReplyDelete2:14 "queer each other over"? I'm not gay but I love hearing meaningless little people like you using a format like this to display your large vocabulary. Wait, don't bother, I can help. Vocabulary refers to the amount and kind of words one has the capability of using.
ReplyDeleteThis site has been a great opportunity for venting frustrations about a company many of us worked for and many still employed look to this site for information they don't have access to. And then there's people like you who say things completely out of context simply to show how ignorant they are. (You don't need to look up "ignorant", it will just confuse you. You should stick with small, spiteful little words).
Wow! Twitter classes. Desperation in the making. It seems that everyone is trying to twitter. My spouse works for ASU and they made all departments sign up for a twitter account. Go figure!
ReplyDelete2:10 p.m. where did you get your info? Just curious as someone in Lansing.
ReplyDeleteYou are right 3:16 he will read it just how some corporate hack wrote it for him
ReplyDeleteAnyone heard anything about the Michigan properties?
ReplyDeleteJim,
ReplyDeletePlease, Please... go back to the comment I just left on Part 3 of yesterday's blog.
Thanks!
@11:08a said:
ReplyDelete"An audition for your job essentialness to determine who will be fired on 7/8, and they saved themselves money while conducting the auditions and doubling, tripling or quadrupling your workloads for the same pay."
I completely agree with your theory.
Even if it wasn't the intention, that's how it worked out.
Very astute!
Jim,
ReplyDeleteI have tried to personally answer your reply to my online comment yesterday. I simply don't have the capability to activate Windows Outlook as it seems to demand.
What I want you to know is that you made me cry when you wished that I find my own Sparky. I did have my own Sparky, a wonderful dude who is now with your Danny. For me, the meds came in time to prolong my life, and I am grateful but very sad that life can be so cruel.
In short, no one at Gannett has ever been as kind and loving as you have been, Jim. I am going to miss you terrbly.
Peace and love, Shining Knight!
Rainbow the Editorial Boy
P.S. Size 12!!
Consolidated copydesk in Newark and Mansfield Ohio will be announced Monday. Big raises for information center staff members, yet they are laying off a large number of other people. Do they really think people can't figure out something is up when I.T. and building department tear down walls?
ReplyDeleteWhat do you think about a VP who sends out info about layoffs to his facebook friends, who aren't VPs!
ReplyDeleteTotally amazing.
If I'm hit, this person will have alot of explaining to do, because I printed out this person's comments to his friends and the original post.
Seems to me, it is terms for termination.
I've been following the blog for about a year. I'm still amazed at the loyalty of those who worked at Ft. Myers in the 1990s in the Dan Martin days. With margins that made other papers green with envy, Ft. Myers did it their own way. There are some great stories here.
ReplyDeleteFunny... from August 2004...
ReplyDeleteFORT MYERS TEAM SHOWS COURAGE IN FACE OF HURRICANE CHARLEY;
ONE SPECIAL READER SAYS, 'YOU DELIVERED WHEN I NEEDED YOU MOST'
By Phil Currie, Senior Vice President/News, Gannett
As Hurricane Charley veered from its expected path in the Florida gulf, the Web site of The News-Press in Fort Myers kept readers up to date on its track. When the hurricane hit the Fort Myers area with sudden and unexpected furry, the news staff moved into even higher gear and provided outstanding and extended coverage in print and online. It continues to do so now.
Once the staff in Fort Myers -- now supplemented with loaners from throughout the South Group -- has a chance to catch its breath, we'll have a first-hand report for NEWS WATCH readers. Right now, the team there has plenty to do without fulfilling a request from us. (Many Fort Myers employees suffered damage, sometimes devastating, to their own homes, which is part of this courageous story.)
In the meantime, we have something special from a special News-Press reader.
Dan Martin was publisher in Fort Myers for many years and retired to the area. On Wednesday, Aug. 18, he sent an e-mail to Executive Editor Kate Marymont, with copies to Publisher Carol Hudler, Newspaper Division President Gary Watson and me.
Martin told of his experience in the storm along with those of his wife, Joann, and his son Steven. But, in addition, he spoke of the importance of the newspaper to him as a reader caught in a disaster.
Before he became a publisher, Martin was an editor. He always has been an excellent writer, so who better to give the first report from this area? We let reader Martin tell his story in excerpts below, reprinted with his permission.
And, along with Martin, NEWS WATCH salutes the terrific people in all departments at The News-Press who continue to develop and deliver this essential print and online report to their readers at a time when such stories are essential and surely connect with readers' lives.
5:11 - I'm in Detroit and we were told this week that we're exempt from the upcoming layoff because we took our hit a month ago. They also noted that we continue to look at revenue and expenses and future layoffs continue to remain an option.
ReplyDelete2:10--Yes, please elaborate if you can.
ReplyDeleteSo the company gets itself into debt and we pay the price. That's like parents running up credit cards and throwing their kids out to help reduce costs.
ReplyDeleteMaybe a little less imported marble in the Crystal Palace would have saved a few jobs. Gannett spent lavishly on that building and other things, then blames the economy for having to let people go.
Something so simple yet so sickening about what has happened. How do these people in McLean sleep at night? We're newspaper people. We never made much money and sacrificed a lot in our personal lives to do what we do, but we figured we had some security.
A lot of people to blame, from CEOs and publishers, to board of directors, right down to the MEs and department heads. However, their all sittin' pretty. Plenty of money in the bank from all the years of inflated salaries while we scrambled to find money to fix our 1989 Chevys. For the average employee who loses their job next week, particularly if they are later in life, well...there really isn't much life left.
Greed is a terrible thing.
Hello, Detroit! What was the final count on layoffs last month at:
ReplyDelete* the Freep
* the agency
I believe the count in Detroit was 22 for the Freep and 110 for the partnership. (I've heard everything from 100 to 114 but 110 came up in a few conversations so I'm going with that. Perhaps someone closer to HR can provide the final tally.) We've had enough of these that the numbers are all blurring together!
ReplyDelete>>>Amir: If you, or someone else, know SEO well, I'm open to the help. The site ranks high when you add furlough or a few other words, but not just gannett.<<<
ReplyDelete----
Thx. You have 'Gannett' in your title, which improves your chances of bubbling at the top of searches. Add Gannett to your meta name="keywords" and meta name="descriptions"... I'll get back to you with more info.