Documents: Pub revealed paper's finances to staff; deposition hints at why Montgomery's Brown quit

When Scott Brown resigned as publisher of The Montgomery Advertiser in the summer of 2008, Gannett gave no details explaining his sudden departure.

Now, newly emerged court documents hint at one possible explanation. They open a rare window on the internal operations of a Gannett daily on the verge of joining scores of others in laying off thousands of workers, while Corporate pleaded hard times during the industry's meltdown.

One document is a sworn deposition by former Sports Editor David "L.C." Johnson, who is suing the small Alabama paper in federal court over his dismissal in November 2009. Johnson claims he was fired after complaining to management that his staff wasn't being paid overtime, in violation of federal law.

Gannett denies Johnson's allegations, and says he was fired for poor performance.

Profit margin said 28.8%
Under questioning by an attorney for Gannett, Lynlee Palmer of Birmingham, Ala., Johnson claims Brown had taken a highly unusual step not long before he was forced from his job.

Brown called the Advertiser's staff together for an all-hands meeting, then revealed what ordinarily would be confidential information, Johnson says: more than a dozen pages of company documents disclosing the Advertiser's profit margin -- the amount of money it earned as a percentage of its revenue. That figure was 28.8%, or $11.8 million, Johnson told Palmer.

Those figures align with information I received in separate internal documents from a reader in November 2008.

'More belt tightening'
Brown's presentation painted a gloomy outlook, the deposition shows, and was apparently designed to prepare the staff for rough times ahead: "Basically, we're going to have to do more belt tightening,'' Johnson testified. This was when supplies as basic as notebooks were already scarce, he said.

Johnson initially claims the meeting occured perhaps in 2007, but later says it came just as Brown was shown the door. That was about June 12, 2008, when Gannett announced a new publisher in a press release saying only that Brown had resigned. Two months later, Gannett launched the first of three mass layoffs nationwide.

Johnson brought his suit in U.S. District Court in October 2009. I recently obtained hundreds of pages of case depositions and related documents, some of them filed about six weeks ago. (Here's a deposition explainer.)

Publisher: 'I resigned'
Brown also gave a deposition in the Johnson suit. He said he could not reveal details surrounding his departure because they were part of a confidential agreement with Gannett that prevented him from speaking publicly, his deposition shows.

"The company and I came to a mutual agreement, and I resigned,'' he told Johnson's attorney, Heather Leonard, also of Birmingham.

Although Brown doesn't provide a reason, Johnson's assertion about the release of sensitive financial documents -- if true -- would likely anger Corporate, once that became known.

Gannett laid off 600 newspaper employees, and cut 400 other jobs, in August 2008. That was followed by another layoff of more than 2,200 in December 2008, the month after Johnson was dismissed. A third layoff, involving more than 1,400 workers, took place in July 2009.

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[Image: today's Advertiser, Newseum]