Saturday, February 26, 2011

Stock | How GCI underperforms its own industry

In a match-up selected by the company itself, Gannett's stock has fared worse than shares of the overall newspaper industry for the third consecutive year, according to the just-released annual 10-K report to federal regulators.

Corporate compares the performance of the company's stock to a peer group index it created, one comprising GCI, plus A.H. Belo, E.W. Scripps, Journal Communications, Lee Enterprises, McClatchy Co., Media General, and the New York Times Co. Corporate also compares GCI's performance to the broader S&P 500 index.

Had you invested $100 on Dec. 25, 2005, in GCI; the peer group, and the S&P, here's what you would have had this past Dec. 26:
  • GCI: $30.47
  • Peer group: $37.50
  • S&P: $111.99
Beyond the obvious, GCI's underperformance over this period is noteworthy because it covers the five years since Craig Dubow was made CEO, in July 2005.

Moreover, it shows GCI's tumble hasn't simply been a matter of the stock suffering along with the rest of the industry. Under this management team, in fact, GCI has done even worse. Despite that, however, the board of directors continues to reward the team, as the latest round of bonuses shows.

According to Corporate, this table reflects the value of that $100 investment at the end of each year since 2005 (see the bigger spreadsheet):

Related: Read the full discussion of GCI's stock performance on Page 28 of the 10-K.


  1. Disgusting. Greedy "leaders" feeding at the trough and destroying a company, all with the enabler board of directors' blessing. Why are stockholders not outraged? (No, I'm not one anymore.)

  2. This is what happens when you blow smoke about what you are going to do, about how customer centric you are, about overpromising and under delivering on a consistent basis. This is what happens when a lame board fails to hold management accountable and rewards incompetence with bonuses.

    How about being shareholder-centric for a while?

  3. Gracia and Craig will just keep blaming the economy and the weather for misfortunes. Time for Jimbo to make another appearance at the shareholders meeting.

  4. those are some very impressive "metrics", pop the champagne corporate!

  5. A real shakeup at the top is needed. Clearly, it's time for a new team. The shakeup may cost us some money, but someone with a plan for print, online and new media needs to be brought in to create confidence.
    It might be time for you to write an opinion piece about what should happen, calling for change.

  6. The problem is this... and it's ALWAYS the problem... the people that fu@k up the company (in this case, Dumbo and Matorie, and the Board of Directors) will eventually be replaced or leave on their own, but they are never held financially accountable. In fact, they made their millions and will be fine for the rest of their lives. The employees and ex-employees on the otherhand, don't fair so well financially. It's not just Gannett... it's all of Corporate America, and quite frankly, in politics too. Sad and unfortunate... but get use to it because it's only going to get worse.

  7. The corporate executive suite is clearly overmatched by market conditions and demands. It's letting digital slip slide away, regardless of the BS in its report. It's apparently incapable of generating product innovation from within the company.

    Dubow, Martore and Dickey have made inroads in consolidation, which for a company as large as Gannett makes a lot of sense.

    But they appear to have focused so heavily on savings (with which to feather their nests) that they've lost sight of a key business rule: The customer always comes first.

  8. Shame on the management awarding itself obscene bonuses. Shame on the board of directors for not demanding excellence and forward-thinking.
    Gannett is a very large company. It has enjoyed much success over the years.
    However, I think it needs to take note of what happened to Borders Bookstores last week. An inability to respond to the competition from the Internet, along with the eBook revolution, made Borders a distant contender very quickly in the marketplace.
    Gannett is going down the same path in its inability to respond effectively to new challenges. All it's doing is cutting. It needs to be innovative.
    Too bad. When I roll over my 401K (and believe me I will be rolling it over), I will not leave any of it invested in Gannett stock.

  9. Martore, Dubow & crew need to go - and take all top management along. Clean house now.

  10. 8:08 and replace them with whom? Would you give is the names of the folks at the top of your list?

  11. It's really pretty simple....get rid of most of the highly paid people that micromanage everyone to death. Get out of the way of local publishers and give them the command....."Generate Revenue with the resources you have and keep costs down"

    Then....get the hell out of their way.

    No one in Gannett makes a decision without checking it out with someone above.....makes for indecision and mediocre performance all along the way.

  12. Thanks for this, Jim, because I always believed that the reason for the layoffs, consolidations and furloughs was to increase the value of the company to shareholders. In fact, we see the result is to lower its value, compared to the other companies. I should note these other companies have taken some pretty radical steps. In the case of Scripps, they closed papers in Albuqerque, Denver and Cincy.

  13. Bring Saridakis back!

  14. Bring back Frank Vega now.

  15. Curley back -- whatever it takes.

    Why anyone on earth in an airport would buy USAT over the WSJ would be a question of sanity. And which product has been invested INTO and which product has been cannibalized? Same for all other GCI products ... who on earth would buy them now?

  16. If you have not noticed, Gannett does not admit mistakes such as letting Saridakis depart. Too much pride or I should say stupidity.

  17. Read “The No Asshole Rule” by Professor Bob Sutton. It goes a long way in explaining why companies like Gannett struggle, and why good people who can, get the hell out.

    Take Sutton’s quick “How Good is Your Boss? poll now at

  18. @8:26AM, Holy sheit! That would that be a wake up call for the idiots running this company into the ground. Frank didn't take crap from anyone. Didn't care much for him, but you knew where you stood with him. No BS type of a guy.

  19. 9:59: I took the How Good is Your Boss" poll, and it came up with 7/20 bad character traits, and the admonition "You have the worst of the worst, a CERTIFIED BRASSHOLE. If you can't get him or her fired, get out as fast as you can." Very accurate poll.

  20. 9:19pm, very plain and simple - just look at Jim's chart listing the executives who received stock options (below). Those Crystal Palace drones should be kicked out.

  21. 9:19, replacing them is as easy as ABC:


  22. I will be voting "No" for the re-election of every incumbent to the board and "No" for every resolution offered by management. My shares are a drop in the bucket, but I have the power to vote, and vote I will.

  23. 10:04, despite voting "no," during the past several years, it just hasn't worked - unfortunately, they'll all be re-elected. Would be great though if there were more "retirement" announcements coming from the top, some of which are at that age.

  24. Your one vote “no” may not be heard but imagine the message that would be sent if 20,000 former employees, shareholders and tens of thousands of current and former Gannett readers and advertisers used iPetitions (or another like tool) to say it.

    Now, that would take “crowd-sourcing” to an entirely new level.


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."

Note: Only a member of this blog may post a comment.