Wednesday, July 21, 2010
Week July 19-25 | Your News & Comments: Part 1
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72 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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Any bets on what Gannett stock does this morning, when trading resumes at 9:30 a.m. ET?
ReplyDeleteJim can you keep a running ticker somewhere in your blog that shows the lapses in days that the CFO role and the CDO role have not been filled? I think it is important for employees to realize how this company is flying blind in critical areas. Does the public company need to have a CFO for Sarbanes Oaxley? As for the CDO role, this company needs some vision for growth. We haven't heard anything about our future growth strategy.
ReplyDeleteInvestors to Dubow: It's revenues, stupid. If you continue to allow revenues to decline, the market is going to sell off your company stock because they see it has no future. We need revenue growth policies, not more slash and burn. Bring back Saridakis.
ReplyDeleteSoars briefly to $70 so that I can sell and recoup recent years' monstrous losses?
ReplyDeleteJim- any thoughts on the the announcement of the yahoo partnership? It seems to have completley escaped the blog. I've been waiting for something like this to happen. It's clear that Corporate has been trying to consolidate operations and especially content. This structural reorganization lends itself perfectly to a joint venture and/or complete take over by the content hungry search engines. There are two things Gannett brings to the table. Content, and a sales force. Of course that could be said for any newspaper company..... Having said that. Look for Google and Microsoft to start with their "partnerships". If anyone was wondering what the future of our dying species is... Friday was the first memo in the first chapter of our new story. Let the consolidations begin!
ReplyDeleteGood point, 7:47. That got lost in the earnings related news. I'm interested in several things about that deal, including what these CPM advertising rates will be, plus the fact it merges Gannett editorial into an operation (Yahoo) that's now got its own content farm (Associated Content).
ReplyDeleteAlso, as I recall, some people in Digital (Saridakis?) opposed the Yahoo partnership.
Finally, and somewhat related, what happened to the Gannett-News Corp. discussions?
I have heard that some of the less profitable
ReplyDeleteor in the red, weekies are going to be closed or sold .This is so that management can concentrate
on large markets where the most revenue can be
gained or lost and to pay down some of the huge
debt load.
Can anyone confirm.
What a bunch of bull$hit the audiocast was. Will they ever discuss out in the open the GPC's? I doubt it.
ReplyDelete1:47 pm: Which audiocast? The one stock analysts on Friday -- or something else?
ReplyDeleteI would have to agree that this may the end times for the Weeklies of Gannett. Not so much because of labor -- staff be absorbed, but production costs are going to be under scrutiny.
ReplyDeleteThere was a quarterly Dubow audiocast today.
ReplyDeleteTo use that meeting-speak phrase, what were the takeaways?
ReplyDeleteDid Dubow take any questions? What were they? His responses?
1:29 and 3:04, I share your concern for the weeklies. Such a turnabout from the local-local push of just a few years ago. I think it should be handled on a case-by-case basis, but either they should make money, be made profitable quickly or sold/closed. I can make an argument for keeping ones that turn a profit as they are an advertising vehicle for smaller businesses that cannot afford to advertise in the larger newspapers. Any word, just in case I need to start sending out resumes?
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDeleteRegarding USA Today:
ReplyDeleteI was doing some back-of-the-envelope math today for a future post, when it occurred to me that USAT's newsroom may have an annual payroll cost as high as $35 million to $40 million, when you include benefits and other costs.
I get to that figure by multiplying 400 people times an average $75,000 to $100,000 each, where cost includes wages, health care, retirement benefits, and payroll taxes.
In addition to that payroll cost, of course, there is the newsroom overhead in office space, utilities, travel, miscellaneous supplies, etc.
What am I missing?
It's not just about Gannett.. When will the whole model come tumbling down? Seriously, I'm not crazy. Consider the facts and the trends, and the media habits. Staving through strategy may be possible, but print is not going to sustain. It just isn't as we think about the loss of readers from 25- to 45-year-olds. They aren't going to print. It's documented. The trend is real. Time to punt? Or does someone have the magic?
ReplyDeleteThere's no company-wide strategy on the weeklies. In some markets, the weeklies are terrificly profitable due to legal advertising revenue.
ReplyDeleteYou aren't missing anything, it is at least that. It's unbelievable overhead. Especially for the revenue being generated. Plus it is so hard to change things around here.
ReplyDeleteThe yahoo partnership is a cover up for Bob Dickey and Michelle Krans. Apparently he promised some serious increase in revenues (according to Saridakis before he departed) and no one believes that this is going to do anything for local Digital sales initiatives. I am not even sure Bob Dickey understands what Yahoo does. He keeps talking about how they have "great training to blitz our local markets" or something like that.
ReplyDeleteFor example, this new "partnership" forces Gannett to use yahoo's ad serving and targeting system for a fee.
In addition to paying Yahoo this fee, the Gannett local ad sales people will have "the opportunity" to sell Yahoo's ad inventory in their own local markets.
One problem with this strategy and it was echoed when Saridakis disagreed with the partnership...Our own local sales people CANNOT sell their own local digital inventory, what is going to make them want to sell Yahoo's local ad inventory too???
Furthermore, if they sell Yahoo's inventory, they only make half as much as if they were to sell their own local newspaper inventory.
Aside from all the technology issues around Yahoo's own platform (like Yahoo does not use their own system for their own ad sales team), this is a big scam. Josh Resnick (our boss and the "TO BE NAMED Chief Digital Officer", even thinks this is the biggest mistake and that it will fail).
Gannett moves over to Yahoo's lame platform, Gannett now has to sell Yahoo's inventory, Gannett makes half as much and Bob Dickey is promising an enormous increase in ad sales.
Jack Williams negotiated this deal and was just as clueless on the performance. NO ONE has seen any modeling on what the potential revenue would look like.
Jim,
You should investigate this deal as it SMELLS big time and no one is talking about "Why" they needed to do it and everyone has avoided the conversation.
Something to ponder while staring at a beer...if print is going down the tubes both in readership and revenue-generating ability, why spend all those dollars to consolidate pagination/page design? There will be job eliminations at the individual locations but, if I read correctly, hiring at the hubs. How long will it take to recoup the money being invested in this whole procedure?
ReplyDelete1:47 PM, I too was waiting to hear an update on the GPCs in yesterdays audiocast. Other than the fact that they are happening, we've had NO OTHER INFORMATION. How many sites are left to roll over? How are ads submitted to the GPC and what is the proofing and approval process? How many artists will be left at each site, how are they selected? For the artists that are left, what will their duties be? What is the damn secret?
ReplyDeleteDoes anyone know how well the "Print First" initiative is working? In the NNCO area, I have not noticed enough interesting or in-depth stories to make me want to go out of my way to buy that edition. Thoughts from other areas?
ReplyDeleteThe average salary of a newsroom employee at USAT is $75,000 to $100,000 a year?
ReplyDeletePlease reread what I wrote. Payroll cost is not the same as salary. Cost includes benefits, especially medical, plus taxes ane retirement contributions. Those costs are often equal to up to 50% of wages. So, an employee paid $50K could cost an employer as much as an additional $25K.
ReplyDeleteThere are more than a few USAT newsroom employees earning $100K in wages alone. (I was one of them, and I only worked there eight years after working at much smaller Gannett papers for only 12 years.)
But remember: Living costs in the D.C. area are quite high.
At my old site in Wisconsin, there are no artists/designers left. All work has been moved to the GPC in Des Moines. One person remains, acting as a liaison between the site and the GPC. If Gannett was able to remove all graphics people from my old site, it will happens to yours, too. It's a sign of the times, as well as the new economy. Print designers are dinosaurs.
ReplyDeleteCan anyone tell me how many people work in the newsroom at the Detroit Free Press? How about The Arizona Republic's?
ReplyDeleteAbout 260 people work at the Detroit Free Press. And, just fyi, about 230 people work at the Detroit News.
ReplyDelete10:46,
ReplyDeleteThe stand-alone newspaper/TV station model is shot. If Gannett's management and board did their due diligence, they would solicit best-offers from the larger, diversified media companies and companies that want to expand local content generation. Gannett should have done this during the McCorkindale era when the company and industry were attractive. Knight Ridder and Times Mirror look smarter and smarter as the years go by. Still, Gannett has newspapers, stations, audiences and assets that have value. It should hire an investment adviser to gauge interest.
Gannett does not invest capital in any project unless the expected return on investment is at least 30%. There are complex models used well before any capital request is approved. This formula would also apply to a new front end system. Normally, hard costs are achieved by eliminating full time employees. Soft costs are kicked out of the equation by a capital planning committee.
ReplyDeleteArizona Republic,Pressroom in contract talks company wants 12% wage cut and may be a loss of a weeks vacation. Electricians they are wanting a 5% cut and a loss of a weeks vacation. So much for the wage freeze being lifted but then again who ever said once it was lifted it ment raises not cuts.
ReplyDeleteThanks, 12:14!
ReplyDeleteI hear that Louisville has been told to sell north of $700K in advertising beyond what was already budgeted for Periods 7-12.
ReplyDeleteHave other papers been give newer, higher targets for the second half?
9:41 Oshkosh did a print first exclusive on historic churches in the city, but I don't know what if anything is coming next. They can barely keep up with corporate's initiatives now; just wait until ad building and pagination move to Des Moines.
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDeleteYo 8:10 I love the way you narrow minded no-it-alls worship at the feet of Saridakis. I will ask again, What did he do besides sell his companies to Gannett? Lots of hot air and absolutely NOTHING of achievement during his tenure to call his own. Enough with this guy.
ReplyDeleteI am so sick and tired of Gannett whining about having to pay high salaries to some employees because of the cost of living in the D.C. burbs. Why didn't Gannett and particularly USAT build the Crystal Palace elsewhere, some place more affordable? There aren't a lot of good reasons, other than arrogance, for this company to locate itself in one of the most expensive areas in the nation, and then have to cut jobs because they can't afford all the high salaries. The palace is more than half empty. The taxes are high. This is a great example of the kind of corporate obnoxiousness that got us into this economic mess. Unfortunately, the little guy always pays the price more than the company leaders.
ReplyDelete5:44 pm. This is all part of the Neuharth legacy. The country clubs are better in Virginia than back in Rochester, and I do not believe the Gannett Management Committee wanted to re-relocate to, say, Iowa.
ReplyDeleteQuestion: How long before the Gannett Co. Inc. renames itself Gannett Media Co. Inc., or Gannett Digital Co. Inc., or some other such New Economy name?
ReplyDeleteChris Brogan announces Gannett Local new website
ReplyDeletehttp://www.chrisbrogan.com/gannett-launches-gannett-local/
I agree, 11:22. Legals may be the difference between being in the black or in the red for some weeklies.
ReplyDeletePer your request for number of people in The Republic newsroom: I counted the people on the most recent newsroom phone list. I came up with 326. That number doesn't include interns. It includes at least five people who have left in the past few weeks.
ReplyDeleteThe sad part about Gannett/USAT not setting up shop in a lower-cost-of-living area, maybe in a little more modest building, is that they will pay for this mistake forever. Taxes are high in the region and won't get any lower. Utilities are expensive, particularly considering the square footage they have in the palace. Just the upkeep on the place must be off the charts. I routinely see work crews polishing the marble floors - crews that probably cost more than similar crews in say, uh, Iowa. Grounds workers, a security force, water for fancy fountains. It all adds up and doesn't go away with time. USAT is a national newspaper. Even if Gannett Corp. wanted bragging rights about a NoVa zip code, I don't understand why a national newspaper had to be here -- a newspaper that even with the higher salaries still doesn't pay what the NYT or WP pays. In fact, entry-level people struggle to live on USAT salaries in the D.C. metro area, which probably over the long haul will mean a dilution of young talent. Who wants to work for a paper that routinely lays off people or forces furloughs AND live in a area where buying a one-bedroom condo will cost you a quarter of million bucks. NoVa is nice but it's no San Francisco! Heck, USAT didn't need to move to a Midwest cornfield, but they didn't need to be here either.
ReplyDeleteAnyhow, I never hear any of the higher ups taking responsibility for wasting money on this place - and place and expense that has contributed to the loss of staff and resources. I guess it's water under the bridge, but it's still too bad a few jobs couldn't have been saved in exchange for a little less expensive marble and granite in the restrooms. Where was the board of directors when all this crap was being approved?
Thanks, 9:35 pm.
ReplyDeletePeople make good points about the high cost of having a headquarters in the D.C. area but, for the sake of argument, I ask you this.
ReplyDeleteWould you really want the headquarters of a national newspaper in Boise or Rochester or even Phoenix. I suspect you would accrue a lot of added travel expenses if you put the paper anywhere but a major city.
Whether you like the expense or not, D.C. is at the heart of the nation and "relatively" close to New York.
Can you really see basing the newspaper headquarters anywhere other than New York City, D.C. or Los Angeles? I can't. And all of those cities have an extremely high cost of living.
Note that the two other major national papers -- the Times and the Wall Street Journal -- are both based in New York. I hate to say something positive about management, but the D.C. locale makes sense to me.
943 - upkeep? polishing floors? work crews, plural? wtf is all that?
ReplyDeleteAnd those fancy fountains you're talking about, half the bubblers at my Wisconsin site don't work, the other half taste like crap. What's a fancy one got that ours don't?
Oh, and to the Wis poster who said all their ads are going to GPC - misinformed. All your ads are going to Wausau or GB, we haven't been GPC'd yet.
Ad production in Wisconsin will be moved to the GPCs. I have been told by a sales manager at one of the newspapers that the move is in the works. I hear there is a brief training program for the sales people.
ReplyDelete@5:44 PM - Where did you want them to move from Arlington? Or did you want them to stay in Arlington despite the jacked up rent that was about to be forced upon the company? Did you want all of the corporate employees to move to f'ing Boise? Really?
ReplyDeleteGannett's salaries are a joke even in the DC metro. I was making $55k doing a job that should have paid me at least $80k with the four years experience that I had. I left Gannett for another job making $70k only to have my new boss laugh at me six-months later and say "Why did you ask for so little money? Here's another $15k a year."
Now I'm making $120k not working at Gannett and could be making more if not for the lost years at the Crystal Palace.
@ Jim, 6:24: The Wisconsin group has been called Gannett Wisconsin Media for some time now.
ReplyDeleteThere's another, more telling reason why Gannett located USA Today in Arlington and later in Reston.
ReplyDeleteVirginia is a right-to-work state, which means people employed there cannot be forced to join a union. Gannett is fervently anti-union.
In so far as D.C. being the main headquarters of Gannett. It was not that way always. Rochester NewsYork> In so far as having to run a major business from a large city. To be successful, you will have to ask, Warren Buffett, if it is possible!
ReplyDeleteTwo items needing correction. #1 - That 50% figure you gave for added benefits costs is off base. Benefits represent about 25% of an individual's salary and these costs have actually dropped below 25% in recent years as Gannett froze the pension plan and transferred a greater share of health care costs to employees. #2 - Capital investments with an ROI of 15% or greater will garner a favorable nod depending upon availability of funds. The comment above suggesting required ROI's of 30% is not accurate. Trying to make certain we vet the facts on this blog so that it continues to be a 'more reliable than not' source of company information.
ReplyDeleteThanks, 4:32 pm. Even at 20%, however, I think the USAT newsroom figure reaches the $30 million range, when factoring in a significant number of supervisors who get paid salaries well in excess of $100K.
ReplyDeleteGod, this is awkward phrasing on USAT.com ...
ReplyDelete"Breitbart, the conservative who posted Sherrod's comments on his website, told our Gannett colleague Chuck Raasch that his point ....
"Breitbart also told Gannett's ContentOne that, "I don't want this...."
As a reader, now I'm curious 1) if Gannett talked to this schmuck Breitbart twice, 2) if Chuck Raasch goes by his undercover name ContentOne periodically, and 3) if ContentOne is pronounced CONtent or conTENT...
Why must we make it so hard for the audience? They don't care who we are as long as we get the story correct, or at least marginally balanced.
I disagree that USA Today/Gannett belongs in D.C./NoVa. First, USA Today is a national paper. It constantly fights the perception of being East Coast and inside-the-beltway oriented. Being more centrally located would cut down on the D.C. bias. A small office there would have sufficed in terms of being close to government news and various movers and shakers. The rest of the operation could have been located in a smaller, less-expensive city. I do hear that other cities have airports and golf courses, and that housing is actually affordable in places like Kansas City, Dallas and even Chicago.
ReplyDeleteMany companies have fled New York and L.A. The prestige of being in those places isn't what it once was. It is hard to recruit people to work in New York unless you pay them ungodly sums of money, and even then... Just ask the folks at the AP.
Bottom line, when you factor in everything, it is better for businesses, especially struggling media companies, to be in less expensive places. USA Today is in the exclusive area of Tysons Corner for one main reason: ego. They could have remained in NoVa, but simply moved 30 miles from the beltway and saved a ton of money. Instead, they chose the most pricey place in one of the most expensive counties in the U.S. That is not to say that they can't make money there. It just means a lot more belt tightening is probably going to be necessary.
Uhhhhh, the New York Times is located in New York because it's still primarily a New York metro paper. USA TODAY isn't a Washington D.C. metro, though it sometimes likes to think of itself as such. Not a good argument in defense of USAT being located in a glamorous building (name three other newspapers with buildings this plush), with high taxes, the second or third highest cost of living in the country and the worst traffic. C'mon. This location was a HUGE financial mistake that doesn't get talked enough about.
ReplyDeleteI agree with 6:03 and 6:14. There are soooo many other places Gannett could've put the mother ship. To give you an idea about cost of living in another part of the county, my paper in Texas pays me $46,000 a year (after a pay cut last year.) Unions are not strong down here, why do you think General Motors closed a plant in Michigan and kept the one in Arlington, Texas running? I still make enough to own an all-brick, 3-2-2 on a corner lot by myself. I also bought a new car a few years ago. I'm not eating beanie wienies every night, but I know you have to have more coming in then going out. There are plenty of places to run a national company with lower costs than NoVa.
ReplyDeleteThe artists in Reno just lost their jobs.
ReplyDeleteHow many, 7:38?
ReplyDeleteWhen the Crystal Palace was being conceived, Washington, D.C., was dying for companies to move in. Tax incentives were being tossed around like frisbees, and there were plenty of old buildings that could have been gutted and rebuilt at a fraction of what Tysons cost. And let's not forget transportation. D.C. has one of the best metros going (despite its recent safety record). In NoVa, you either have a car or spend 90 minutes switching from metro to bus to foot. Bottom line was that Gannett already owned the land in McLean and it was more convenient for the suits to drive Lexuses from their nearby estates than to perspire with the plebes in D.C.
ReplyDeleteFirst the NY Post scoops the Journal News on the Clintons buying a new mansion in Bedford. Now, the tiny Hudson Valley News scoops both the Journal News and the Poughkeepsie Journal on the site of Chelsea's wedding - in Rhinebeck - right in the heart of the Hudson Valley.
ReplyDeletehttp://www.thehudsonvalleynews.com/
Gannett was brilliant when it sold some of the land for 42 million a few years ago. They bought hte land in Tysons 20 years ago...so give them credit. Sure could the re-locate to a less expensive area.....absolutely. But they have been VERY smart with its real estate. I wouldn't be sureprised if we moved out of Tysons so they could further monetize their wise purchase. Then again, it's probably paid for...
ReplyDeleteI'd like to see any of the cost-benefit analyses done on moving HQ to places other than Virginia -- like, say, Cincinnati, where the airport is big and could move people in and out to Gannett communities without a problem. Gannett already had a presence there in The Cincinnati Enquirer.
ReplyDeletePlus, other companies make Cincy their corporate base -- E.W. Scripps, for one.
Still, Tysons might still prove to be a good investment in the end. The company sold a piece of its land (I think it was a ball field) for a nice chunk of change a couple years ago.
Going forward, as it shrinks, Gannett/USA Today could move to smaller quarters, and the entire complex could be sold.
8:23 p.m.: I don't think it was that much money. From the Q1 2008 financial report: "Results for the quarter include a $25.5 million pretax gain on the sale of excess land adjacent to our headquarter business here in McLean."
ReplyDeleteHQ debate misses fact that those decisions were made prior to any vision or sign of a downfall. We were cruising and living good. It would have been prudent to locate elsewhere but USAT was flying high and the DC profile was a plus in those days. Hindsight is 20-20.
ReplyDeleteWhy does the Journal News even bother? A near tornado swept through Northern Westchester around 5 today. Most roads up there are impassable. A cop called it a "disaster area." Yet all that's up on Lohud is a brief news item. No photos - and no carousel heading. Why even bother if that's the best you can do?
ReplyDelete7:38 P.M.: As an artist myself, the Reno artists truly have my sympathy. How much notice did they get?
ReplyDeleteAccording to a leaked rollout schedule I saw on Gannettoid back in November, Reno was supposed to rollover this past April. That would mean Gannett is at least 3 months behind schedule, if they are going in the order the sites are listed in the memo. Are they really behind, or was the schedule revised again? Or maybe it was a bogus schedule that was leaked just to screw with us so we'll never really be sure of what's going on...but that doesn't sound like Gannett!
Regarding ROI of 15% being possible in a capital project: that might be true, but not for a $15 million page design system. This type of capital expense would require a much higher level. Technology projects need to paid off faster because the equipment becomes obsolete much faster. Depreciation is also over a shorter period than a press, for example.
ReplyDeleteAgain, this can only be achieved by cutting payroll. Plain and simple.
Regarding switching to the GPC being behind schedule, be thankful. My site was one of the first papers using it. We have lost revenue because of make goods and advertisers telling us to pound sand due to errors. Personally, I have lost more than 5,000 a month in revenue from the GPC. I'm now putting in 60+ hours per week. Most of the time is not selling but babysitting the GPC to get my ads done. Adding to the frustration is the software is slower than molasses!
ReplyDeleteNow I hear corporate is going to use the same model for the newsroom and page layout.
God help us.
Um, Tysons Corner is NoVa (Northern Virginia). Somebody more motivated than me should so some research into how many large companies are located in NoVa. There are a ton. It is not like Gannett is the only company around. SAIC just moved their national HQ from San Diego to....TYSONS CORNER. Hilton also just moved to Tysons.
ReplyDeleteFor Part 2 of this thread, please go here.
ReplyDeleteNewspaper companies, at least ones that care more about their people than zip codes, generally don't look for the high-priced areas to build over-the-top "resorts." Yes, many other companies reside in Northern Virginia. Few have the digs that USAT has. Virtually none are newspaper companies other than some one-room suburban weeklies outside the the glitzy shopping mecca of Tysons Corner. Why would anyone defend Gannett spending the kind of money it did to hire world famous architects to build this palace in the shadows of the Ritz Carlton, Cartier and other companies that don't carry the kind of debt Gannett does?
ReplyDeleteYou're incorrect, 10:43. Most large corporations have digs just like Gannett's - but they keep the lights on.
ReplyDelete