Excerpts from a new column by New York Times media reporter David Carr about CEO Craig Dubow and his team, scheduled for tomorrow's editions:
The top six executives at the embattled publishing company would receive 2010 compensation packages of more than $28 million if the company does very well, which seems unlikely, but the symbolism remains. The savings from two years of mandatory furloughs for the rest of Gannett employees: $33 million. Well, that didn’t go very far, did it?
In terms of financial engineering, Mr. Dubow and his crew have done a good job with a bad hand. Last year, revenue was down only marginally, and according to the company operating cash flow was $1.3 billion, up 19 percent from 2009, while debt was reduced by $710 million, to $2.35 billion.
That’s a testament to what the Street would call “aggressive cost management.” But out in the rest of the world, we know that generally means dumping bodies overboard, and Gannett is a high achiever when it comes to downsizing. In the five years that Mr. Dubow has run the company, its work force has gone from 52,000 employees to just over 32,000.
Ken Doctor, an analyst at Outsell and the author of “Newsonomics,” suggested that Gannett is mostly in the business of managing entropy. “There has not been a lot of strategy other than cost-cutting to maintain profits and some small bets in digital that have not had any significant impact yet,” he said.
While their approach may be lacking in imagination and long-term strategy, Mr. Dubow and his team can be credited with being prudent in difficult times. Prudent, except when it comes to their own compensation.
On the Gannett Blog, gannettblog.blogspot.com an independent site about the company, employees have expressed a high level of frustration and outrage about the compensation going to the folks at headquarters while people in the field watch newsrooms and their compensation shrink.
“Pure and simple, a laugh in every employee’s face,” said one anonymous poster on the day the packages were announced.
Related: At flagging Tribune Co., tales of a bankrupt culture -- a Carr story in October that helped spur the CEO's ouster.
The top six executives at the embattled publishing company would receive 2010 compensation packages of more than $28 million if the company does very well, which seems unlikely, but the symbolism remains. The savings from two years of mandatory furloughs for the rest of Gannett employees: $33 million. Well, that didn’t go very far, did it?
In terms of financial engineering, Mr. Dubow and his crew have done a good job with a bad hand. Last year, revenue was down only marginally, and according to the company operating cash flow was $1.3 billion, up 19 percent from 2009, while debt was reduced by $710 million, to $2.35 billion.
Ken Doctor, an analyst at Outsell and the author of “Newsonomics,” suggested that Gannett is mostly in the business of managing entropy. “There has not been a lot of strategy other than cost-cutting to maintain profits and some small bets in digital that have not had any significant impact yet,” he said.
While their approach may be lacking in imagination and long-term strategy, Mr. Dubow and his team can be credited with being prudent in difficult times. Prudent, except when it comes to their own compensation.
On the Gannett Blog, gannettblog.blogspot.com an independent site about the company, employees have expressed a high level of frustration and outrage about the compensation going to the folks at headquarters while people in the field watch newsrooms and their compensation shrink.
“Pure and simple, a laugh in every employee’s face,” said one anonymous poster on the day the packages were announced.
Related: At flagging Tribune Co., tales of a bankrupt culture -- a Carr story in October that helped spur the CEO's ouster.
So Jim, you knew all about this when it was brought up in the comments yesterday. Why did you play dumb? "Who's the writer?"
ReplyDelete1. I wondered whether there were two NYT stories in the works.
ReplyDelete2. I don't talk about conversations I have with readers, including other journalists, because that would violate my confidentiality policy.
Let's see...? 33 million saved by furloughs, 28 million paid out in bonuses to Craig & Co.
ReplyDeleteWho says charity doesn't begin at home?
we are great watchdogs, except when it comes to GANNETT. If any other company were doing what GANNETT is we would have plastered it all over our papers.
ReplyDeleteI'll be interested to see what the reaction will be from the Crystal Palace, with the Times story on the heels of the Forbes piece, (pause for dramatic effect) Yeah, I thought so too, nothing.
ReplyDeleteThey should hang their heads in shame.
10:14pm, Good point. Better yet, what will be reaction among members of the board? Yeah, same probably. They should be ashamed for sanctioning this unbridled greed, arrogance and mendacity.
ReplyDeleteCraig D. received a hugh percentage increase this year.
ReplyDeleteStaffs across Gannett received little or no wage increases and many/most also had the opportunity of a week or two off without pay. How in the world, short of pure greed, can the board give the Gannett CEO such an increase? Nearly 49%!!!
It takes little skill or leadership to layoff people, give them little raises or weeks off without pay.
Sad.
So they pocketed nearly all the savings from our furloughs. What suckers we all are.
ReplyDeleteI worked for Gannett in the '70s and survived the takeover of an independent paper by the group. They were laughable then, and they are laughable now.
ReplyDeleteHaving joined Gannett’s newspaper executive ranks via an acquisition it didn’t take long to see how its emphasis on NET, its top-down culture and the deplorable behaviors it tolerated from so many of its celebrated ring bearers was harming this company and driving its value down.
ReplyDeleteThe NY Times and Forbes pieces further confirm why I was right in not sticking around long as even this board action’s serve in reinforcing it.
The only power Gannett employees now have is their presence. If NO worker bees show up to create their product for them, these highly-compensated executives would have to do it all themselves (ha! as if). A few days without employees might help focus the attention of the board on the fact that their executives don't actually produce any product in return for their big bonuses -- and without product, they have nothing.
ReplyDeleteIt's only a matter of time before they declare bankruptcy and everyone will be out of a job anyway. Like vampires, they have slowly bled the company until its remaining workers are too weak to leave... extracting every last drop... before dumping the carcass in a ditch on their way to Vegas
Every Gannett employee who didn't receive a $1 million+ package last year should stay home from work on May 2. Spread the word.
ReplyDeleteMay 3 too, for that matter.
ReplyDeleteIs this really a sick-out? Do we have the nerve for it? Makes me nervous. Could they retaliate?
ReplyDeleteThey've run out of leverage. With the media attention of late, I think they'll be running scared in the next two weeks -- especially with threats of a sick-out. May 2 and 3. I say, go for it. Time to grow some, Gannett peeps. Do it.
ReplyDelete8:46 -- I disagree. Many other companies operate like this and we do not plaster it all over our papers. Most other mainstream media don't make a big deal about things like this either. Why? Because the big-time media is corporate run and corporations don't generally try to rile people up about policies they take part in and value.
ReplyDeleteThe banking industry has taken a little heat (but not nearly enough), and what heat it took was because the story became too big to ignore. We aren't running big stories on other media companies that are operating the same way. And there are many other examples of corporate greed stories that we choose not to cover.
Sick Out on May 2/3 sounds like a great idea. Could they fire everyone?
ReplyDeletePosted as a comment to Carr's article by Columbia Journalism School:
ReplyDeleteQuite a lopsided shot across the bow, David. Or is that just how the media cover their own? A quick look at the NYT corp's public filings shows that NYT Chairman and CEO Janet Robinson took home over 2.85 million in cash for 2010. That's more than Dubow, despite the fact that Gannett has an enterprise value of 5.72 billion compared to the NYT's 2 billion. So by that metric, should Dubow be getting more than 3X the cash compensation? Or is it Robinson that's overpaid? Likely, they all are. Unfortunately, that's not your point though. Your reporting fails to establish any relevant benchmarks for corporate compensation in the media and publishing sector. Instead of doing a thoughtful analysis of corporate comp. in one of the worst recessions that our country has seen in quite some time, you churn out the same vapid content that you accuse your competitor of producing.
Sick out on May 2 Monday and May 3 Tuesday or if you are too scared then file for a vacation on both days. Now is the time to STAND UP AND FIGHT BACK.
ReplyDeleteI don't think I'd ever seen the breakdown of furlough savings v. bonuses for the brass before.
ReplyDeleteNow, all I want to do is to grab Craig Dubow by his stupid Beard of Sorrow and shake him until he gives me back the four weeks of my life I spent sucking down Ramen noodles and fantasizing about a nice, undemanding job in PR.
If Gannett had honestly needed my paychecks to offset the rising cost of newsprint, or to avoid layoffs, or even to pay for the ugly new paint job in the newsroom, I could have rolled with that.
But furloughs to offset five-figure corporate bonuses? Gah! So angry...can't move...can't breathe...fingers only capable of vague throttling motions...
You owe me a month's pay, you jackwagons!
* Sorry, should have written: EIGHT-FIGURE corporate bonuses. Too...angry...to do MATH. Graaargh!
ReplyDeleteHere is how journalists always amaze me. Mr Carr writes..."About a week ago, I was at the Marriott in Detroit, and as I stepped over the newspaper at my door as I usually do, I then wondered why. It occurred to me that everything in that artifact that would be useful for me — scores from the teams I follow, a brief on big news and a splash of entertainment coverage — I had already learned on my smartphone and tablet before leaving the room. Gannett is aware of the challenge and has moved aggressively into mobile, with six million downloads of its apps, but those marginal revenues will not fill the hole created by challenges to its core business." He like many of those i work with love to bite the hand that feed shim. THe NYT gets the majority of their revenue from that "artifact" but he still manages to piss on it. Folks I am not challenging his article, I just don't understand how a business minded individual could proudly proclaim to the world, The company I work for is dead and I have total distain for it!!! Dude, really??????
ReplyDeleteCarr, nobody cares about your personal beef with your competitor, Gannett.
ReplyDeleteSadly, this is hardly news. Get inline behind NYT, WashPo, TimeWarner, AOL (the worst in layoffs and exec comp), and every other American company out there. But you focus on your biggest competitor only...who is eating your lunch in revenue and financial performance?
Carr's credibility would have been better had he talked about the NYT in this analysis as well. Typical.
I've worked for several of the large newspaper chains and thought that Carr's piece was timely and well done. Of course he works for a competitor. Would anyone really expect Gannett to sanction a no-holds-barred critical examination by one of its own reporters, as the Washington Post did Sunday? Not enough can be written about the brutal and selfish conduct of Gannett management. If anything, Carr should have touched on how Gannett is a relic of the "rollup" era that ended in the late 1990s. The amalgamation of disparate papers in disparate markets, all run by puppetmasters whose chief purpose is to keep the thing glued together should be unraveled in the form of asset sales to the highest bidder. That should have happened in 2004-05 when those assets were at their peak value.
ReplyDeleteReference to this story was also on WTOP this morning http://www.bizjournals.com/washington/morning_call/2011/04/huge-bonuses-for-gannett-execs.html#
ReplyDeleteThe Arizona Republic has run stories on excessive compensation of public sector employees/managers, retirement double-dipping, that sort of thing here in Phoenix. And their current articles about the Fiesta Bowl's problems (tries to) delicately skirt the fact that their own CEO/publisher sits on the Fiesta Bowl's board. As the head of ASU's Walter Cronkite School of Journalism said recently (and I paraphrase) The Republic has a problem... Duh?
ReplyDeleteMy words: Gannett is the problem with newspapers today. They are the cancer that has been eating away at journalism for the past forty years.
Carr is as guilty as any other journalist out there who writes a one sided story and does not give the readers balanced and fair information. No wonder readership is down. Newspaper readership in the rest of the world is growing and in the U.S. it's shrinking. Maybe we have just lost our focus on how to write fair stories. Except for the few brave souls who truly still believe in recording all sides to a story.
ReplyDeleteIf you read the comments on Carr's NYTimes story, his bias was not lost on his educated readership.
At the same time the Republic has been running stories about the Fiesta Bowl, and minimizing Zidich's role in that clusterf^@k they excoriated the state legislator for its lack of transparency in passing the state budget and a series or bills backed by the White Right. The criticism was valid but extremely hypocritical given the paper's efforts to avoid transparency on Zidich's role in reporting the Fiesta Bowl mess.
ReplyDeleteDuring the Christmas holidays in 2008 and 2009, while the Republic was laying people off, the company's VP of Community Relations was writing columns about employers role in the community and charitable giving. Yet no serious effort was made to assist the displaced workers.
Hypocrisy is deep in Gannett's DNA.
11:05 -- The concept of balanced journalism has always been more talk than anything. The mere act of writing and editing a story (in affect filtering the "important" facts from the "unimportant") ensures bias. After all, what one reporter and editor sees as important another may not.
ReplyDeleteFrankly, I don't see anything wrong with that. Since it is impossible to write an unbiased story, let's not stay awake at night worrying about it. Instead, we should write stories that point out important facts and issues to society. As long as we report the facts correctly, readers can sort through whatever bias might appear. The trouble is too many so-called journalists (particularly the broadcast pundits) report outright lies to support their biased positions.
Carr's piece is biased, but it presents relevant and interesting facts to the public. It demonstrates that Gannett's top management staff is taking obscene salaries and giving itself raises at a time when it's also cutting the pay of people making $30,000 a year. The piece would have been considerably better if he had noted that Times management and the management at many other companies is doing the exact same thing, but the fact that he didn't doesn't negate the worth of this story.
Journalism professors decrying the fact that he wasn't fair in his treatment of top brass should ask themselves a few questions. Do these people making millions per year need someone to come to their defense or is it the people whose wages they are cutting that need a champion? Does the fact that Carr's article focuses on one company, rather than many negate the argument that he's making?
If you ask me, we have become far too concerned about being fair and balanced and far too unconcerned about making a difference in society. Yes, people can argue about what needs to be done, but that's why we should have multiple news sources and not the relative monopolies that we've developed today.
"Hey, Gracia, we just made The New York Times!"
ReplyDelete11:49, I couldn't have stated it better if I tried. This is all just wrong on so many levels. Maybe Dubow and company will come to their senses and stop the next furlough that's scheduled for the second quarter and take the money from their paychecks instead. God knows they can afford to do it and it would be a noble gesture on their part to show the world that they're willing to make a sacrafice for the good of the company and out of respect for their employees who have shouldered this burden for too long.
ReplyDeleteQuit bitching and unionize. In all honesty, no one wants the hassle of being in a union, but you see what the alternative is, right? You'll be left to the tender mercies of Dubow & Co.
ReplyDelete