Saturday, October 22, 2011

Earnings | Lost in the chatter, a startling number

By now, you probably know Gannett's print advertising revenue fell 8.5% in the third quarter from a year ago; that figured prominently in news accounts about Monday's quarterly financial report.

But did you know it was the biggest quarterly drop in nearly two years? You must go way back to the fourth quarter of 2009, still deep in the Great Recession, to find a greater decline. That's when print ad revenue fell a whopping 18%.

Given the fact the U.S. economy is officially growing again -- albeit at a snail's pace -- the continuing falloff in print ad revenue doesn't bode well for GCI's future.

That's because no matter what people say about the future of digital, the company's fortunes remain lashed to paper: 47% of GCI's $1.3 billion in Q3 revenue came from print advertising. Throw in circulation revenue, and the figure rises to 68%.

Bottom line: As goes print, so goes the rest of the company.

Related: this spreadsheet shows quarterly year-over-year changes in GCI's revenue by category: from print advertising to broadcasting, going back to Q4 of 2009.


  1. I've been examining these revenue trends for a post I'm considering about the likelihood of another round of furloughs during the first quarter of next year.

  2. Print dollars vs digital industry's all a mess.
    Thank goodness we still have TV stations.

  3. At least Dubow got his big payout. That's all he was every gunning for, and that's what's wrong with corporate America. CEOs are rewarded for making moves that benefit them in the short term ... even if they hurt they company in the long run.

  4. Broadcasting has its own issues. If you notice, broadcasting revenue was down 5.9%. They'll pick up in 2012 because it's an election year and an Olympic year. But long-term, traditional broadcasting faces many of the same challenges as print.

    The traditional broadcast audience skews old and is being fragmented by digital media. Tivo, Hulu and other such services give people the ability to avoid or at least minimize ads.

    TV is definitely healthier than newspapers, but that's not really saying much these days, is it?

  5. Remember when looking at these numbers they are false. They give digital money that is not earned. It is simply a share of the print money. When the sale is the print version.

  6. I think you meant "latched", not lashed there, Jim.
    -A proofreader Gannett decided they could do without

    Word verification: "bless", hah!

  7. 1:54 Thank you.

    I'm using the transitive verb, which Merriam Webster defines as "to bind with or as if with a line."

  8. Not sure either word yields a viable metaphor.

  9. nice analysis of the numbers, Jim. No matter what spews from Gracia's mouth, there should be no doubt that the dinosaur is still carrying this company.

  10. Jim, isn't that ads sold on newspaper websites are counted as "publishing revenue" and not included in the "digital" category? I think it's important to note that when they talk about the growth in digital revenue, it's not the websites we have been working so hard to improve, but things like careerbuilder. in other words the growing part of the company that gannett is always touting actually has nothing to do with journalism.

  11. 8:07 is correct. Of the $592 million in quarterly print advertising, about $99 million was digital, according to my analysis of the earnings statement.

    It's important to note that in the statement, Corporate calls this category "publishing" advertising. That's because the category, although dominated by the U.S. newspaper division, also includes other print titles such as healthcare magazines, Army Times and other Government Media, plus other non-newspaper publications.


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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