Stock | As 2010 ends, GCI unchanged from 2009

Barring an 11th hour rally tomorrow, Gannett's stock will finish the year nearly dead even with a year ago, when GCI ended 2009 at $14.85 a share. (It closed today at $15.) By contrast, the S&P 500 index, which reflects the broader stock market, is on track to end 2010 up nearly 13% from Dec. 31, 2009, according to Google Finance.

Related: GCI prices, Dec. 31, 2009 to Dec. 31, 2010

Sponsors | I've just received $50 in donations

Two readers -- one in New York and the other in North Carolina -- have each given me $25, with one of the gifts prompted by a plug media critic Eric Alterman gave me today in his column in The Nation. "Some really good reporting,'' he said, regarding my recent analysis of Freedom Forum's weakening finances.

Today's contributions push me even further past my goal. With just one day remaining in the quarter, the breakdown:

• Reader donations: $1,558
• Advertising: $2,601

I'm trying to earn $4,000 quarterly, through donations of $5 per reader, plus advertising sales. Please use the "Donate" tool in the green rail, upper right. Or mail cash/checks payable to: Jim Hopkins, 584 Castro St. #823, San Francisco, Calif., 94114-2594.

I'm online only occasionally until Thursday

My Internet access will be very spotty over the next two days. I'll post your comments whenever I get a chance. As always, I appreciate your patience.

Dec. 27-Jan. 2 | Your News & Comments: Part 1

Can't find the right spot for your comment? Post it here, in this open forum. Real Time Comments: parked here, 24/7. (Earlier editions.)

Sponsors | I've now surpassed my quarterly goal!

[Updated at 7:59 p.m. ET. I've just received a $20 contribution from a reader in Delaware, bringing my total to $4,008 -- surpassing my quarterly goal, with four days still to go. Thank you, everyone.]

Via snail mail, I've received $85 in contributions from readers in Indiana, Nevada and Virginia.

Unfortunately, I can't acknowledge one of the gifts with an official Gannett Blog postcard because the return address provided is a newspaper work address. That donor wrote: "Words can't express my appreciation to you for all your time and hard work dedicated to Gannett Blog. Here's hoping you and Sparky have a wonderful Christmas and Happy New Year.'' So, to that reader, thank you.

These newest contributions bring me to within $11 of my quarterly goal. With four days left, here's the breakdown:

• Reader contributions: $1,514
• Advertising: $2,494

I'm trying to earn $4,000 quarterly, through donations of $5 per reader, plus advertising sales. Please use the "Donate" tool in the green rail, upper right. Or mail cash/checks payable to: Jim Hopkins, 584 Castro St. #823, San Francisco, Calif., 94114-2594.

As Freedom Forum finances sank, foundation paid millions to oldest members of its board of trustees

Freedom Forum paid millions of dollars in compensation to the longest-serving members of its governing board of trustees during the decade the journalism foundation depleted its endowment for a costly expansion of the Newseum, its Washington museum about news history, public documents show.

The museum has become a growing financial burden for Freedom Forum. In 2009, its annual operating costs reached a staggering $92 million, or $250,000 a day. That was far above the $36 million, or $99,000 a day, just two years before. The expansion into new quarters cost $450 million, nearly twice initial projections, and wasn't completed until 2008 -- years late, based on the most optimistic timetable.

Following are the seven current trustees who also were board members in 2000, when the museum project started. Dollar amounts reflect their total Freedom Forum and Newseum compensation through 2009, according to the documents.

Charles Overby
Chairman and CEO, Freedom Forum; CEO, Newseum

$6,957,518

Peter Prichard
retired USA Today editor and Newseum president

$4,986,571

Malcolm Kirschenbaum
attorney, Cocoa Beach, Fla.

$700,025

Jan Neuharth
President, Paper Chase Farms, Middleburg, Va.

$610,896

H. Wilbert Norton Jr.
Dean, University of Mississippi journalism school

$537,946

Betty Bao Lord
author, New York

$476,147

Judy Woodruff
PBS television correspondent

$425,564

Background notes
Figures are from annual IRS 990 reports filed by the foundation and the museum. Compensation figures for Overby and Prichard comprise their salaries, benefits and expenses; they weren't paid trustee fees. For all others, amounts are trustee fees, benefits and expenses. Some trustees also were occasional members of the Newseum's separate governing board; in those cases, dollar amounts here are their combined compensation.

Neuharth is the daughter of foundation Founder Al Neuharth. Overby attended the University of Mississippi and is a member of its journalism school's board of directors. Freedom Forum has given $5 million for the school's Overby Center for Southern Journalism and Politics.

Two other trustees from 2000 left the board during the past two years. They are Madelyn Jennings, who was paid $696,303 through 2009; and Harry W. Brooks, paid $444,530 through 2008. Al Neuharth, who also was a trustee in 2000, has been paid at least $1,779,131 in wages, benefits and expenses through 2009.

Finally, two current trustees were not on the board in 2000: Orage Quarles III, publisher of The News & Observer of Raleigh, N.C., and Michael Coleman, a newspaper management consultant in Cocoa Beach. Quarles got paid $104,683 in 2004-2009. Coleman hasn't received any compensation, the documents show.

A brief history

Neuharth

Freedom Forum is a successor to the original Gannett Foundation, so it owes its existence to Gannett stockholders and employees. As the company's retired chairman and CEO, Neuharth controlled the foundation and its 16 million shares of Gannett stock in 1991. That year, shareholders agreed to buy back the stock under pressure from Neuharth. He then used the $650 million in proceeds to start Freedom Forum, and the Gannett Foundation name reverted to the company. Neuharth, 86, lives in Cocoa Beach.

Related: Download free copies of the 2009 tax reports. Here's Freedom Forum's. And here's the Newseum's.

Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

Week Dec. 20-26 | Your News & Comments: Part 4

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Google woos local advertisers old-fashioned way

After helping popularize automated ad sales on the Web, the Internet-search giant is quietly turning to a lower-tech tool -- phone calls -- to compete in the hot market for local business advertising.

Google has hired several hundred sales representatives to call U.S. businesses such as spas, restaurants and hotels to promote new advertising initiatives, The Wall Street Journal says in a new story today, citing people familiar with the matter. The effort includes an office in Tempe, Ariz., with around 100 sales representatives, one of these people said.

So far, only a fraction of local businesses advertise online, the story says. BIA/Kelsey, a local-media advisory firm, estimates that local businesses will spend about $20 billion online this year, a figure that could reach more than $35 billion by 2014.

Google's effort comes as Gannett pushes forward with its participation in the Yahoo newspaper consortium. In that venture, GCI representatives sell ads to local businesses on the web portal's websites as well as those of GCI's local U.S. newspapers and TV stations. GCI announced that deal in July, after it had been first reported here on Gannett Blog.

Week Dec. 20-26 | Your News & Comments: Part 3

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Reno | Managing editor Lundahl has died at 57

Mark Lundahl joined the Reno Gazette-Journal as a news reporter in March 1987 and held numerous titles during his 23 years there -- including assistant city editor, city editor, assistant managing editor, senior editor for news and multimedia and, finally, managing editor.

He died Tuesday after a brief illness.

[Photo: Gazette-Journal]

Sponsors | I've now received $45 from Virginia

One reader gave me $20, and another sent $25. Combined, they've brought me to 95% of my quarterly goal -- the closest I've ever come! With just eight days left to raise a final $188, the breakdown:

• Reader donations: $1,386
• Advertising: $2,416

I'm trying to earn $4,000 quarterly, through donations of $5 per reader, plus advertising sales. Please use the "Donate" tool in the green rail, upper right. Or mail cash/checks payable to: Jim Hopkins, 584 Castro St. #823, San Francisco, Calif., 94114-2594.

Mail | Newseum could be a 'worthwhile venture'

Regarding my recent post about the Newseum's operating costs rising to $92 million in 2009, and straining its funder, the Freedom Forum foundation, Andy Bechtel writes today:

I took my son to the Newseum last summer. He's 10. It was our first visit there.

We liked a lot of what we saw, particularly the collection of historic front pages and an interactive exhibit about ethics.

Less impressive were the Elvis exhibit and the one about the FBI. I didn't see how these matched the mission of the museum. The gift shop was full of items related to these two exhibits as well as ugly Newseum sweatshirts and T-shirts.

The museum also feels a step behind where the media are going. A section on social media and Twitter (with a photo of Rick Sanchez -- is that still there?) were tucked into a corner.

For all of that, I'm glad that I went, and my son said it was better than he expected. I hope the Newseum can get its finances under control and stay open. Done well, it would be a worthwhile venture.

Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

Pop Quiz | Testing the conventional wisdom

Imagine you've assembled a group of 500 Gannett workers who are representative of the entire 35,000-employee workforce. Many of them work at daily and weekly newspapers in the U.S., Guam and the U.K. Still more work at the 23 television stations. Some are at CareerBuilder, PointRoll, and Captivate. Then there's Gannett Digital, Clipper and the Gannett Healthcare Group magazines. Don't forget Army Times Publishing, Gannett Offset, and the Centers of Excellence, plus the Regional Toning Centers, the Gannett Production Centers, and many other worksites I don't have room to list. Finally, there's Corporate itself; being representative of the global workforce, these 500 include about 10 folks from the Crystal Palace's Gannett Tower.

By occupation, the group would include assistant circulation managers; TV master control technicians; payroll clerks; magazine photo editors; press operators; advertising design artists; software engineers; security guards; advertising sales people; TV camera operators; receptionists; newspaper reporters and editors; truck drivers, and many, many other positions.

Now, give each of them paper and pencil, and ask them to write down the name of Gannett's CEO.

Question: How many would answer correctly?

Urgent: Kane returns to Rochester publisher post

Kane

[Updated at 3:58 p.m. ET: Corporate has now posted a press release.]

[Updated at 3:27 p.m. ET: Whew! Talk about musical executive chairs! Kane is returning to his former job as publisher of the Democrat and Chronicle in Rochester, N.Y., the paper is now reporting. He remains president of the East Group. He replaces Ali Zoibi, who was named publisher of The Daily Advertiser in Lafayette, La. Zoibi, in turn, replaces Leslie Hurst, named chief executive last week of The Clarion-Ledger in Jackson, Miss.]

Zoibi

[Updated at 3:07 p.m. ET: In an e-mail, a reader has just told me the following. "We just got a message (I'm not in the office) of a last minute 3 pm meeting for all Rochester D&C employees...don't know what it's about yet."]

The Indianapolis Star is updating its story about Karen Crotchfelt's promotion to publisher. The story now says: "She replaces Michael G. Kane, whose new assignment within Gannett is expected to be announced this afternoon."

The Indianapolis Business Journal has now posted a story that includes a short interview with Crotchfelt. The Journal says she is 40 years old.

Sponsors | I've just received a sunny $20 donation

Arriving from a reader in Florida, their contribution brings me to within 93% of my quarterly goal -- closer than ever. With just nine days left to make $289, here's the breakdown:

• Reader donations: $1,343
• Advertising: $2,368

I'm trying to earn $4,000 quarterly, through donations of $5 per reader, plus advertising sales. Please use the "Donate" tool in the green rail, upper right. Or mail cash/checks payable to: Jim Hopkins, 584 Castro St. #823, San Francisco, Calif., 94114-2594.

Holidaze | A viral hit: 'The Digital Story of Nativity'

Viral videos continue to challenge Gannett and other established publishers. Just in time for the holidays, this:



Sure beats those lame dancing elves.

Earlier: How viral videos are killing TV ads, Part 1, and Part 2

Hubs | Asbury Park reaches outside for design chief

Blogger and Des Moines Register alum Charles Apple today reports the appointment of Tim Frank as Design Studio hub chief; Apple's got the memo from New Jersey's Asbury Park Press Executive Editor Hollis Towns.

Until two weeks ago, Apple says, Frank was creative director and deputy managing editor at Fort Lauderdale Sun-Sentinel. Apple likes Frank, and is mystified by the Florida daily's decision to lay him off.

[Updated at 3:42 p.m. ET.] Frank is now the third second design chief appointment among the five page design and production hubs. Jeff Glick just got the post at The Tennessean in Nashville. See the following memo from Executive Editor Randy Lovely about the appointment at The Arizona Republic in Phoenix.

Lovely's memo
It is with great pleasure that I announce that Tracy Collins has been named director of the Phoenix design studio.

Tracy will bring his vast creative and management experience to the papers served by the Phoenix studio, and I'm confident that the quality and sophistication of our newspapers will be enhanced by his leadership.

As you all know, Tracy is a nationally known visual journalist. He has been actively involved with the Society of News Design for many years and has worked with scores of designers and graphic artists to win many national awards.

Tracy came to Phoenix in 2001 and has worked in almost all areas of the newsroom -- sports, news/enterprise planning, and coordination with KPNX, in addition to his leadership of our design, photo and copy desks. Tracy led a full redesign of The Arizona Republic in 2006, and has worked with other Gannett newspapers to improve their visual storytelling.

Tracy will assume his new role May 1, when the Phoenix design studio is officially launched. In the coming months we'll review the myriad roles and responsibilities that Tracy oversees to determine how the Republic operation is impacted by his promotion.

After the new year, we'll move forward with the next step in creation of our design studio -- interviewing and filling the role of creative director.

Please join me in congratulating Tracy.

Randy

Got a memo? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

Indy | Who are the two unidentified men here?

The Indianapolis Star's online story this morning about its new publisher includes the photo, above, with a cutline that only says the following: "Karen Crotchfelt was named today president and publisher of Star Media."

Kane file photo

It doesn't identify the men behind her, who I've circled. Is that outgoing Publisher Michael Kane on the right? And is that U.S. newspapers chief Bob Dickey on the left?

Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

With Kane and Crotchfelt, 19 newspaper CEO swaps

This afternoon's appointment of Michael Kane as publisher of the Rochester Democrat and Chronicle, after the promotion of Karen Crotchfelt to publisher of The Indianapolis Star, are now at least the 18th and 19th turnovers of top Gannett newspaper executive slots this year.

This unusual turnover -- half of it, in the past month -- is among GCI's 81 U.S. community publishing newspapers, and the Tucson, Ariz., newspaper partnership. It follows recent Gannett Blog speculation that the division was due for a big reorganization. The list so far:

1. Today. Kane to Rochester and . . .
2. Crotchfelt to Indianapolis.
3. Dec. 14. Leslie Hurst named publisher of The Clarion-Ledger at Jackson, Miss., replacing retiring Larry Whitaker. Her successor at The Daily Advertiser in Lafayette, La., hasn't been announced. is Ali Zoibi, previously of the Democrat and Chronicle in Rochester, N.Y.
4. Dec. 13. Gabe Aguiree named general manager of the Iowa City Press-Citizen, replacing Dan Brown, whose departure wasn't explained.
5. Dec. 10. Kim Wilson leaves Fort Collins Coloradoan; her departure isn't explained, and a replacement hasn't been announced.
6. Dec. 6. Scott Johnson to publisher of the St. Cloud Times in Minnesota. He replaces Bill Albrecht, who was earlier named president of the Media Network of Central Ohio.
7. Nov. 30. Charlie Nutt retires as publisher of The Daily Journal in Vineland, N.J. Advertising Director Joseph Calchi also assumes title of general manager.
8. Michael Beck to general manager of Wisconsin's Stevens Point Journal; he replaced Mark Baldwin, whose departure wasn't explained.
9. Nov. 18. Howard Griffin named publisher of The News Journal in Wilmington, Del., replacing retiring Curtis Riddle.
10. Nov. 15. Mike Jameson leaves as CEO Tucson Newspapers, the joint operating agency co-owned by Gannett and Lee Enterprises; it publishes Lee's Arizona Daily Star. Jameson's replacement hasn't been announced.
11. Oct. 20. Andrew Oppmann leaves as publisher of The Leaf-Chronicle for a university job; his permanent replacement hasn't been announced.
12. Oct. 12. Lee Webber officially retires as publisher of The Honolulu Advertiser after its sale to a cross-town rival.
13. Sept. 28. Linda Greiwe to publisher of the Springfield News-Leader in Missouri, replacing retiring Thomas Bookstaver.
14. Sept. 13. Mark Winkler to publisher of The Desert Sun in Palm Springs, Calif., replacing Richard Ramhoff, whose departure was not explained.
15. Sep. 13. James Fogler to publisher of the Burlington Free Press, replacing Brad Robertson, who was promoted to president of the new GannettLocal.
16. May 25. Samuel Martin to publisher of the Montgomery Advertiser in Alabama. He replaces Cheryl Lindus.
17. May 25. Lindus to general manager of The Muncie Star Press in Muncie, Ind. She replaces Gene Williams, named executive editor of the Courier-Post in Cherry Hill, N.J.
18. April 7. Paul Grzella to general manager of New Jersey's Courier News in Bridgewater and the Home News Tribune in East Brunswick; he replaced Skip Hidlay, who left to become publisher of the Wichita Eagle in Kansas. 
19. March 25. Mei-Mei Chan to publisher of The News-Press in Fort Myers, Fla., replacing Carol Hudler, who was promoted to publisher of The Tennessean at Nashville in November 2009.

Have I missed anyone? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

Urgent: Indy's Kane is 'reassigned'; Crotchfelt's in

Yikes! Word for word from a new seven-paragraph story now on The Indianapolis Star's website:

Karen Crotchfelt, a Gannett Co. executive at Republic Media in Phoenix, today was named publisher and president of Star Media in Indianapolis.

A Midwest native, Crotchfelt is senior vice president for sales and strategy at Republic Media, publisher of The Arizona Republic. Star Media, publisher of the Indianapolis Star and IndyStar.com, and Republic Media are owned by Gannett

“I’m excited to be back in the Midwest," Crotchfelt told Star employees this morning. "I grew up just a couple of hours from here.

“I’m excited at the energy I feel here and anxious to get started.”

She begins Jan. 3.

She replaces Michael G. Kane, who is being reassigned in Gannett.

She will bring skills in strategic thinking and communications from Phoenix to Indianapolis, said Bob Dickey, Gannett U.S. community publishing president.

Dominos falling
Kane's mysterious reassignment doesn't make clear whether leaves also means he's out as president of the newly formed East Group, one announced a week ago today as part of a broader reorganization of the entire U.S. newspaper group senior management structure.

Week Dec. 20-26 | Your News & Comments: Part 2

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All shook up: As Newseum's operating costs soared to $250,000 a day, Freedom Forum's finances sank

[This year's Presley exhibit is a stretch for a news museum]

Four months ago, the Freedom Forum journalism foundation issued a late-afternoon press release that nearly begged to be ignored. Under a snoozer of a headline, it announced seemingly routine management promotions at the non-profit foundation and its signature project, a Washington museum about news history called the Newseum.

Overby

"These changes,'' Chairman and CEO Charles Overby said, "strengthen the entire management team and reflect the good work that has been done to promote our priorities of the Newseum, the First Amendment and diversity in newsrooms."

The release barely hinted at the real news. Freedom Forum and the Newseum had undergone a stunning management shakeup that left several high-paying jobs vacant. They included that of its just-departed president, former USA Today Editor Ken Paulson, who got $443,185 in salary, benefits and expenses in 2009. Moreover, the statement didn't disclose that both institutions had fallen into greater financial straits than previously reported.

Now, newly released public documents reveal the untold story. Annual spending by Freedom Forum and the museum has skyrocketed, contributing to $224 million in foundation overspending during 2007-2009 alone, further weakening its crucial income-producing endowment.

The museum is the culprit. In 2007, a year before unveiling a $450 million expansion that cost nearly twice initial projections, the Newseum's annual operating costs totaled $36 million -- an average of $99,000 a day. In 2009, they soared to $92 million, or $250,000 a day, the documents show.

A glittering fortune, gone

This is a story about what happened to a glittering fortune -- one amassed by generations of Gannett employees, only to be drained from the company's charitable arm, the original Gannett Foundation.

Neuharth

It's also about Allen H. Neuharth, who launched Freedom Forum in 1991 after he retired as Gannett's chairman and CEO. The foundation, the company, and his most famous creation -- USA Today -- are the 86-year-old's legacy. Now, in the twilight of his life, crushing economic forces are threatening all three.

Freedom Forum tax documents and annual reports reveal extraordinary spending on construction, interest payments, salaries and bonuses. Coupled with bruising stock market declines, the endowment's non-real estate assets plunged to $400 million in 2009 from $900 million in 2000, when the Newseum expansion started.

Meanwhile, as museum staff got laid off, top executives received six-figure bonuses in 2008 for completing the museum, even though it opened years later than first forecast. Overby, for one, got a $375,000 cash bonus, bringing his total pay that year to $991,044 in wages, benefits and expenses. Including expenses over the past decade, Freedom Forum has now paid him $7 million.

These details emerge in nearly 10,000 pages of IRS reports Freedom Forum and the Newseum filed in 2000-2009. The 2009 report was filed Oct. 29. I obtained copies of the documents under federal open records laws. They're the only comprehensive source of financial information such non-profits are required to make public.

To be sure, Freedom Forum and the Newseum may have other financial resources to tap, including potentially millions in outstanding donations, plus a smaller endowment held by the museum itself worth $27 million at the end of 2009. Still, barring an exceptional reversal in fortunes this year and in the immediate years ahead, it's unclear how much longer the two institutions can be sustained.

I asked Freedom Forum officials about the financial condition of the foundation and the museum, in e-mails last Wednesday and on Dec. 8. They declined to comment, other than to acknowledge receiving my requests.

This isn't the first time Freedom Forum's spending has been in the spotlight. In a 1994 settlement with the New York attorney general's office, it agreed to curtail what the general called runaway construction spending on the foundation's first headquarters.

In 2002, when Columbia Journalism Review reported big cutbacks in international programs to finance the Newseum, Overby told writer Russ Baker: "I have found that there are three things that everybody knows how to run. They know how to edit a newspaper, they know how to coach a football team, and they know how to run a foundation."

An electric chair, and Elvis
Signs of the museum's stumbling aren't confined to IRS documents. Consider the Elvis Presley exhibit mounted last spring. "Elvis! His groundbreaking, hip-shaking, newsmaking story," was nominally about how the rock 'n' roll singer was portrayed in the news media. Yet, the Newseum's promotional materials focused more on Presley's personal property from his Graceland home.

The museum said those mementos included his white jumpsuit for the 1973 "Aloha from Hawaii" concert, plus a coat and belt he wore to his 1970 White House meeting with President Nixon. The Newseum appeared to be really stretching for ticket sales.

Newseum's exterior

The Presley show joined other exhibits built around an expansively eclectic collection of news industry artifacts, owned and borrowed -- and all displayed in the 250,000 square-foot museum. They include 35,000 historic newspapers, a collection of Pulitzer Prize-winning photos, plus pieces of the Berlin Wall, and the electric chair in which convicted Lindbergh baby kidnapper Bruno Hauptmann was executed.

Certainly, ticket sales never pay the freight at cultural institutions, especially in Washington, where admission is typically free to better-known places like the Smithsonian Institution. Last year, for example, the Newseum sold just $7 million in often-discounted $20 tickets. That's why contributions and earnings from endowments are so crucial.

Freedom Forum started with a $650 million endowment. At the time, 1991, Neuharth had taken control of the original Gannett Foundation after retiring as Gannett's jet-setting CEO. The foundation was established by Founder Frank E. Gannett in 1935 for the benefit of food pantries and other non-profits in communities where the company did business nationwide. Its endowment comprised GCI stock, which Neuharth moved to sell in order to boost the foundation's growth. Gannett agreed to buy it back under pressure, rather than risk its falling to an unfriendly investor.

Neuharth soon went on a spending spree that drew the attention of New York's attorney general. In a settlement on Dec. 28, 1994, Neuharth and other governing trustees paid $175,000 in restitution to the foundation for inappropriate spending. Those expenditures included a massage table in Neuharth's office, and the purchase of 2,000 copies of his autobiography, Confessions of an S.O.B., in an "apparent attempt to improve its bestseller standing," according to a settlement summary. By this point, Neuharth had relinquished the Gannett Foundation name, returning it to the company.

Optimism vs. reality
The reconstituted Gannett Foundation never recovered. It had just $15 million in assets at the end of last year, when its annual spending fell to only $4.1 million. Neuharth's maneuvers would forever deprive scores of communities of hundreds of millions of dollars in charitable support -- from the Rust Belt in Elmira, N.Y., to the farm town of Salinas, Calif., that inspired John Steinbeck's Grapes of Wrath.

Jan Neuharth

Neuharth named his new philanthropy Freedom Forum, and gave it a lofty mission: "free press, free speech, and free spirit for all people." His lieutenant for many years in Gannett, Overby, 63, has been CEO from the start; he became chairman of the nine-member board of trustees in 1997. Most of the trustees are close Neuharth friends or associates, including his daughter, Jan Neuharth. Other trustees include PBS correspondent Judy Woodruff. Former Senate Majority Leader Howard Baker is listed as board secretary.

At 86, Neuharth himself remains active, the foundation says. As founder, he got paid $216,094 in wages plus $262,235 for expenses last year. The 2009 IRS report says he worked 40 hours a week, but it doesn't detail his duties or expenses.

The original Newseum opened in 1997 next to Freedom Forum's first home, across the Potomac River from D.C. in Arlington, Va. Within three years, Overby cited capacity limits in announcing plans to build a bigger home at a location with more foot traffic.

In a June 2000 column, Overby said administrators chose D.C. over other sites in New York City and Northern Virginia. The location would be on Pennsylvania Avenue, across from the National Gallery of Art, "positioned between the Capitol and the White House on an avenue famous around the world,'' he said. Eventually, the project would include a Wolfgang Puck restaurant and a residential apartment tower. Overby suggested an opening in 2003 or 2004.

"If all goes well," he wrote, "Washington will have a major new tourist attraction in three or four years. And the First Amendment and a free press will have an enduring center that teaches and entertains."

All did not go well.

Freedom Forum paid a D.C. record $100 million for the Pennsylvania Avenue property; it included an office building that was razed. In that year's 2000 annual report, the foundation said "the entire project, including the land purchase and construction of the Newseum and housing, is expected to cost about $250 million."

Prichard

A year later, in late 2001, then-President Peter Prichard told CJR: "We said originally we thought the whole project would cost $250 million. I think it will probably cost somewhat more than that, but we don't know yet. We're actually in the process of trying to figure all that out now."

By 2002, the price tag had grown to $400 million, and the completion date had been pushed back to late 2006, that year's annual report said. It eventually opened in April 2008 at a cost Freedom Forum now puts at $450 million.

The trustees had confronted runaway construction before, in their 1994 battle with New York's attorney general, Oliver Koppell.

In the settlement, Koppell said trustees had "failed to exercise appropriate cost controls" around construction -- in that case, of the foundation's original headquarters in Arlington. In response, they agreed any future construction would be completed "within the budget's limits, and that projected costs are not exceeded without adequate justification."

Overby signed the agreement for the foundation. Its provisions effectively remained in force only three years, however. I obtained a copy of the settlement documents under New York open-records law. (Download your own copy, which I've published here for the first time.)

Debt load skyrockets
None of the IRS reports or other publicly available documents explain the cost increases or delayed delivery. But the IRS reports reveal the impact on Freedom Forum's balance sheet. (Here's a spreadsheet of select figures for 2000, plus 2007-2009.)

The 2000 report says the foundation had no mortgage debt; instead, it lists $89.9 million in "loan agreements." That year, it paid no interest. By 2007, however, mortgage debt -- presumably tied to the Newseum construction -- had soared to $362 million. Expenses that year included $1.1 million in interest.

Then the numbers suddenly started gyrating. In 2008, the year the museum opened, Freedom Forum paid a whopping $20.1 million in interest, only to see that drop to $6.2 million last year.

It was the opposite story at the Newseum. It is a legally separate entity from Freedom Forum, so files its own tax reports. By 2007, the museum also carried a mortgage, valued at $35 million. That year, its expenses included a $785,373 interest payment.

But last year, the report says, Newseum's interest expense suddenly ballooned to $23.5 million, even though its mortgage debt remained virtually unchanged. The IRS reports don't explain why the $20 million-plus interest expenses see-sawed between Freedom Forum and the Newseum. (Here's a spreadsheet of select Newseum financial figures for 2007-2009.)

The 2009 IRS reports for Freedom Forum and the Newseum don't identify the mortgage holders.

The cost overruns could be due to a lack of trained museum experience at the top. The foundation hired consultants to plan and develop the Newseum's expansion. Yet, overseeing the project were Freedom Forum and Newseum executives whose prior experience was in Gannett newsrooms. Long-time CEO Overby edited newspapers in Tennessee, Florida and Mississippi, and was on USA Today's management committee. Prichard was USAT's top editor before becoming museum president. So was Paulson.

Other unannounced departures
Freedom Forum's Aug. 11 management shakeup got little attention from major news media. The foundation's statement described Paulson's exit from the president's job only in passing. And it didn't mention two other executive departures. The Newseum's executive director since its 1997 start, Joe Urschel, has stepped down from his $276,000 post. And a former Neuharth chief of staff, Senior Vice President Chris Wells, has left her $291,000 job. Like Paulson's, those two positions haven't been filled.

Paulson

Paulson was named chief executive of the First Amendment Center, a foundation project in Nashville, Tenn. He had been in line to succeed Overby. It appears Overby is now running both Freedom Forum and the Newseum with other deputy directors who survived the shakeup.

There's been other evidence of money woes. Last year, Overby was among several managers who took pay cuts -- a rare move for him, long among Washington philanthropy's highest-paid executives. Yet, even with that wage reduction, documents show Overby has collected $6.1 million in salary and retirement benefits, plus $819,000 for expenses, in 2000-2009. (Since 2001, he also has been on the board of directors of the controversial for-profit prisons operator, Corrections Corporation of America of Nashville. CCA paid him $164,640 in fees last year alone.)

Also last year, Freedom Forum eliminated virtually all donations to non-profits that have been especially dear to Neuharth, and to Overby and the foundation's other trustees. In recent years, many of those headline-generators went to causes with little or no connection to journalism. They included more than $70,000 to a Cocoa Beach, Fla., adoption agency controlled by Neuharth's third wife. Last year, her Home At Last agency got zilch. Also cut out: gifts to the United States Equestrian Team; Neuharth's daughter, Jan, is an equestrian enthusiast in Middleburg, Va., an hour west of Gannett's corporate headquarters.

Freedom Forum's endowment, meanwhile, has a long way to grow before it can comfortably support itself and the Newseum. Last year, the foundation spent $28 million on operations, plus another $52 million grant to the Newseum. Assuming no change in spending, to produce that $80 million this year, the endowment would need to have grown 20%, to $480 million, just to avoid further erosion of its principal. That seems unlikely. Overall stock markets are up 12% this year, based on the widely watched S&P 500 index. (See the spreadsheet for a breakdown of investment assets.)

The foundation's money managers, led by Goldman Sachs, got paid $2.2 million in fees last year.

Freedom Forum's income from outside donors and other sources also appears tepid. The foundation itself doesn't solicit contributions from the public. But the Newseum does. It got $5.4 million in gifts in 2009 beyond the $52.4 million from Freedom Forum. It took in another $26.4 million from facilities rental, ticket sales and concessions. Combined, that revenue still fell short by about $8 million of its $92 million in operating expenses.

To be certain, the museum may have other resources on which to draw. It listed $53 million in grants receivable at the end of 2009, the tax report for that year says. But it doesn't identify the source of that money, including whether any is due from Freedom Forum itself. The museum has 16 "founding partners" who pledged at least $117 million in gifts toward the new building. The biggest, $25 million, came from the John S. and James L. Knight Foundation. Some of these gifts may be coming via installment payments, so could be part of the $53 million.

Also, the Newseum has its own endowment, comprising $27 million in publicly traded securities at the end of 2009. The value of those securities was much higher at the beginning of the year: $48 million; the tax report doesn't explain the $21 million value change, however.

What's Neuharth thinking?
Even the museum's closest boosters have hardly ponied up. Neuharth has contributed only $60,000 to the Friends of the First Amendment Society, which the museum calls "the premiere giving society for donors who contribute $1,000 or more to the Newseum." Members have donated a little over $1 million since it was established in 2007. Among Freedom Forum and Newseum trustees, only two have given $30,000 -- Bette Bao Lord and Wilbert Norton. Neuharth's daughter, Jan, falls in a category of those giving $10,000 to $19,999.

Overby will soon turn 65. With no clear successor after Paulson's departure, it's now reasonable to assume trustees are looking outside Freedom Forum for a new CEO. I asked the foundation if a formal search had begun; that was among my questions it did not answer. Neuharth would almost certainly be involved in any succession planning.

He keeps a close eye on another part of his legacy: USA Today. Last July, Neuharth sharply criticized Publisher Dave Hunke over a full-page Jeep ad that wrapped the front page, calling it the worst mistake made in the paper's 28-year history. USAT is now undergoing a reorganization to boost revenue after steep advertising and circulation losses.

Neuharth still writes his weekly "Plain Talk" for the paper from his sprawling oceanfront estate in Cocoa Beach, called the Pumpkin Center. He's paid $100,000 a year for the column, under an agreement-for-life with Gannett. At the height of his luxe Corporate rule, Neuharth enjoyed living in the limelight.

Now, amid Freedom Forum's missteps, the light has grown harsh -- and perhaps unwelcome. "Most of us have gotten very nosy about everything and everybody,'' he wrote earlier this month. "But many of us fail to realize how nosy others are about us."

Related: Download free copies of the 2009 tax reports. Here's Freedom Forum's. And here's the Newseum's.

Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

Sponsors | I just got a $50 donation!

That gift came from a reader in Iowa, and puts me within 91% of my quarterly goal -- the closest I've ever come. With just 10 days to go, here's the breakdown:

• Reader donations: $1,323
• Advertising: $2,334

I'm trying to earn $4,000 quarterly, through donations of $5 per reader, plus advertising sales. Please use the "Donate" tool in the green rail, upper right. Or mail cash/checks payable to: Jim Hopkins, 584 Castro St. #823, San Francisco, Calif., 94114-2594.

Week Dec. 20-26 | Your News & Comments: Part 1

Can't find the right spot for your comment? Post it here, in this open forum. Real Time Comments: parked here, 24/7. (Earlier editions.)

Note | Yes: the Gannett stock widget is now gone

[Updated at 1:46 p.m. ET on Dec. 22. It's not your imagination: I've now removed the widget in the green sidebar that showed Gannett's current stock price because it was no longer working. I published it with free third-party software. I've contacted the software maker, and hope to find an alternative.]

Dubow, Martore: 'significant progress during 2010'

The following holiday memo was sent to employees shortly after 1 p.m. ET today; a Gannett Blogger forwarded it to me earlier today.

Craig A. Dubow
Chairman
Chief Executive Officer      

Gracia C. Martore
President
Chief Operating Officer

As we celebrate the holiday season and the coming new year with our families and friends, we want to thank each of you for all of your great work and commitment.

We have made significant progress during 2010 as we continue to build on the value we bring to our consumers, business customers and communities.  They remain at the heart of everything we do.  Our work makes a real difference in people’s lives and your contributions have a lasting impact.  You have helped make our company strong.

On behalf of the entire management team, we want to thank you for everything you do for Gannett and our customers every day.  We hope you enjoy some well-deserved time with your loved ones. We wish you a very safe and happy holiday season and we look forward to seeing you in 2011.

Best regards,

Craig and Gracia

Got a memo? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

Best o' the blog | Your top pageviews of 2010

Gannett's Blog's Real Time Comments forum is far and away the most-read feature of this site, contributing to the nearly 67,000 (!) comments you've posted here over the past three years.

But that wasn't all you liked in 2010. Other than Real Time Comments, the category drawing the most pageviews: anything tagged USA Today. That partly explains why these were the year's three most-viewed individual posts:

1. Gannett confirms five design and page production hubs
2. USAT has five reporters on Congress, 27 on entertainment
3. For USAT, surprise news ushers in a long summer

Why Dubow is a member of Broadcast Music's board

I've never reported this before: Craig Dubow is on the board of directors of music licenser BMI because Gannett owns more than 10% of the private concern, according to a recently filed lawsuit BMI brought against Internet portal AOL.

The exact size of GCI's stake isn't disclosed in the so-called Rule 7.1 statement, filed a week ago in the complaint in U.S. District Court in Manhattan. It says: "Gannett Co. Inc., which is publicly held, owns directly or indirectly through a subsidiary more than 10% of BMI's stock."

On its website, BMI doesn't disclose any fees it pays to board members. GCI's former broadcasting division president, Cecil Walker, is presiding director on BMI's board.

Oddly, that BMI stake isn't disclosed in the company's most recent annual 10-K report or the shareholders proxy statement filings to the U.S. Securities and Exchange Commission.

In addition to his BMI seat, Dubow also is on the board of directors of the Associated Press.

Week Dec. 13-19 | Your News & Comments: Part 3

Can't find the right spot for your comment? Post it here, in this open forum. Real Time Comments: parked here, 24/7. (Earlier editions.)

Big Al | He made offers you couldn't refuse

"You just didn't say, 'I cannot do that.' "

-- Former USA Today Publisher Cathie Black, describing her former "tyrannical boss,'' Founder Al Neuharth, in an interview today with The New York Times. New York Mayor Michael Bloomberg recently named Black head of the city's one-million student school system.

Layoffs | This looks like a movie for our times

The Company Men, opening Jan. 21. Bobby Walker (Ben Affleck) is living the proverbial American dream: great job, beautiful family, shiny Porsche in the garage. When corporate downsizing leaves him and co-workers Phil Woodward (Chris Cooper) and Gene McClary (Tommy Lee Jones) jobless, the three men are forced to re-define their lives as men, husbands and fathers.

Furloughs | Here's the latest from 'rumor control'

You'll recall that I heard considerable chatter in October about another round of mandatory one-week furloughs coming during the first quarter -- now, just two weeks away. That speculation died down amid the recent newspaper layoffs, leaving me to conclude any furloughs are on hold.

Not so fast, says an in-the-know reader, in an e-mail with the subject heading, "rumor control." My reader offers the following scenario, which starts with the arrival of this month's P12 financial summaries: "Once they get in the P12 reports," the reader says, "they'll know what the status is and announce the furloughs, meaning the sites will have to scramble to cram all the furloughs into 10 weeks instead of 12. That's what happened the first year."

Another plugged-in reader tells me: "I still hear they are planned. Guess it's possible to move to Q2, but my sources still tell me Q1."

I remain a bit skeptical. It's true Gannett's first-ever round of furloughs, in 2009, was disclosed a full two weeks after that year's quarter started.

But this year's first-quarter furlough was announced a full month before it took effect, in this Dec. 1 memo from Bob Dickey, so everyone would have more time to plan. Corporate already knows overhead's shooting higher in the months ahead, given expected newsprint price increases, so it seems likely the decision has already been made.

Furlough history
In 2009, GCI imposed a one-week, unpaid furlough across all U.S. divisions during the first quarter. Another furlough followed in the second quarter; that one, also for most U.S. divisions, called for one unpaid week for most employees, and a second week for other, highly paid workers.

This year, the U.S. newspaper division, Corporate and some other divisions were furloughed for one week, during the first quarter.

Hubs | Nashville names first Design Studio director

Nashville Tennessean Executive Editor Mark Silverman sent the following memo to staff on Wednesday. It's about the appointment of the first chief of the five newspaper Design Studio hubs, rolling out over the next two years.

The other four hubs are in Asbury Park, N.J.; Des Moines; Louisville, Ky., and Phoenix. Nashville is the first of the Design Studios scheduled to get up and running, perhaps in March or April. Here's Silverman's memo:

Folks,

I'm pleased to announce that Jeff Glick has been named director of the Nashville design studio. He begins his new role in January.

As you all know, Jeff is a nationally known visual journalist. He has worked for national magazines and major newspapers, led newspaper redesign projects and served as creative director for one of Tribune Co.'s major properties. Jeff also has strong management skills, especially in the area of managing newshole in ways that work for both news and advertising departments He developed the design approach that allowed Murfreesboro, Clarksville and Jackson, Tenn., to launch their consolidated editing center, and he has worked on redesign projects for Gannett newspapers in the south and the west newspaper groups.

During the past six months, Jeff has been a part of a small team of Gannett design leaders who helped corporate select fonts and develop several overall design and management approaches for the studios. He also has worked with Jim Baumgarten, CCI folks, and others on the CCI system's set-up here.

Directors for the remaining four studios will be announced shortly.

We will be interviewing candidates for the number-two position at the studio -- creative director -- during the next several days. As we have discussed, the application process for the designer and wire copy editor positions at all five studios will open in January. At the same time, we will begin taking applications for Tennessean producer positions.

In early January, we will discuss some organizational adjustments on the Tennessean side that will help us move forward, and those discussions will make it easier to see the differences between design studio positions and Tennessean positions. Please let Meg or me know if you have suggestions, thoughts, or questions about any of the jobs -- especially as you consider which of the positions most interest you.

Please join me in congratulating Jeff.

-- Mark

Earlier: Amid hubs, Charles Apple urges copy editing stay local

Got a memo? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

[Image: today's front page]

Sponsors | Wow: I've just received $140

That's two $20 donations from readers in Mississippi and Ohio; two $25 donations from readers in Michigan and Minnesota, and $50 from a fifth reader in Alabama. Together, they bring me to within 86% of my quarterly goal. With just two weeks remaining, here's the breakdown so far:

• Reader donations: $1,204
• Advertising: $2,223

I'm trying to earn $4,000 quarterly, through donations of $5 per reader, plus advertising sales. Please use the "Donate" tool in the green rail, upper right. Or mail cash/checks payable to: Jim Hopkins, 584 Castro St. #823, San Francisco, Calif., 94114-2594.

Hubs | Charles Apple: Keep copy editing local

Widely read blogger and former Des Moines Register graphics director Charles Apple has said Gannett's planned five page design and production hubs can be done well, under the right conditions.

Apple

In a new post, however, he says consolidation of copy editing at any newspaper would be a mistake. "Copy editors are best kept on-site," he wrote this week. "And that’s for the record."

I've been told about at least one cluster of GCI newspapers where copy editing will be consolidated at one location, as part of the hub rollout over the next two years. Although that's apparently not part of the official plan for locally produced content, there's nothing I know of to prevent local publishers and executive editors from doing so on their own. After all, local control is local control.

Copy editing is a crucial part of newspaper production. It includes a final review of facts, grammar, spelling, syntax and other text, plus photographs and graphics. Copy editors also write headlines. (And they answer late-night phone calls from sometimes-crazy readers; do additional reporting for stories that need work, and generally keep the world from falling into total chaos. That's why we cherish them.)

A bagpiping farewell
GCI's five hubs will build pages for all 81 U.S. community dailies. They'll be at newspapers in Asbury Park, N.J.; Des Moines; Louisville, Ky.; Nashville, and Phoenix.

Apple wrote about copy editing's future on the occasion of the 61,906-circulation Winston-Salem Journal's farewell to its copy desk last week. The Media General daily in North Carolina -- one of 18 it owns -- is consolidating its production at centers in Richmond, Va., and Tampa, Fla. On Friday, the paper gave its editors a poignant sendoff that included bagpipers marching through the newsroom:

Sponsors | A reader has just volunteered $50!

That $50 came from a Tennessee resident. (In return for the next donation I receive, I promise I won't write a pun-y headline on the acknowledgement post.) This latest gift brings me to within 82% of my quarterly goal. With just 15 days left, here's the breakdown so far:

• Reader donations: $1,078
• Advertising: $2,185

I'm trying to earn $4,000 quarterly, through donations of $5 per reader, plus advertising sales. Please use the "Donate" tool in the green rail, upper right. Or mail cash/checks payable to: Jim Hopkins, 584 Castro St. #823, San Francisco, Calif., 94114-2594.

Tech 101 | Brevard wins first place 'BUD' award

A Gannett Blogger forwarded a memo that ContentOne Vice President Tara Connell apparently sent yesterday to U.S. newspapers and other sites, about an award for use of the "Dashboard" software for newsrooms. Florida Today won the $500 first place prize.

As I understand the concept, Dashboard is a tool that lets newsrooms to see what other newspapers are producing in real time, in order to coordinate coverage across multiple worksites. In other words, it would create a unified news "budget." That's in keeping with Corporate's overall push to create a more seamless and less costly network of content production. Question: Do advertising departments have access to Dashboards?

Following is the memo's top; here's the full text.

Subject: BUD Awards (Best Use of the Dashboard)

From: Connell, Tara
Sent: Wednesday, December 15, 2010 4:57 PM

All: I am pleased to announce the winners of the Best Use of the Dashboard (BUD) Award. Thank you all for your submissions. More importantly, thank you for the creative, collaborative and enthusiastic work you’ve done to adopt the Dashboard.

Got a memo? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.