An independent journal about the Gannett Co. and the news industry's digital transition
Worth reposting: What would you do with $300 million at Gannett?Here's the number you have to remember: $300 million. That's how much Gannett is going to spend to buy its own stock back -- stock that, apparently, wasn't appealing at $1.85 a share. So the next time someone tells you that you have to take a pay cut, just think: $300 million. The next time you don't get a raise: $300 million. The next time you hear of some division or newspaper having to reapply for their jobs at lower wages: $300 million. The next time you shell out $50 for a co-pay: $300 million. And you know what? Even if you've stuffed your 401(k) with Gannett stock, and even if it doubles, that won't be a fraction of the money that Gannett brass get from any pop. $300 million.
Another day. Where do I reapply for an attitude adjustment?
Maybe Gracia will send Bat Boy out to give you that adjustment
Any ideas on how many will be accepting their EROP offers? At my site, except for one fellow who is 65 and was planning to retire anyway (he's dancing out the door), no one is saying much. Management seems to be anxious for the experienced folks to get on their way (or perhaps out-of-the way).
I would think that the stampeed of those leaving or wanting to leave would collapse all exit doors.But it seems there are those spineless,self esteem in the gutter,folks who will hang on til they are pushed out the door with the last remaining once of their pride choking them when they swallow.
Actually, a buyback is a financially strategic move. It's the right economic move for the company.
Even when the company does the right thing, there are bloggers who want to turn it into something else.
8:52, Really? There are many reasons why people at Gannett stay. You shouldn't judge others if they chose to stay. Life is complicated and multifaceted. Everyone has their own experiences to contend with and reflect upon.
11:43 PM wrote "Another day. Where do I reapply for an attitude adjustment?"11:43PM, You should enjoy the fact that you are still working... I have been unemployed for a while now. And, my advice to you is to be thankful for the time in which you were employed, and enjoy it. Don't complain that it's another day... I envy your position, I wish it was just another day at Gannett. I miss the place and I miss my friends.
11:43PM,I don't know your particular situation. But in my experience, people tend to feel better, about themselves, if they go for additional training... Maybe there is another area or maybe an entirely new field that may interest you. Also know that, if you should become unemployed your case-worker will ask you if you would like training.
8:55, 9:02Any company that can decide to underinvest in its product and use its free cash flow to buy back stock is both unimaginative and venal. Much of that repurchased stock will go to pay off options and grants to execs. You can't give me three good reasons to buy back stock. But I'll bet readers could give 50 good ideas for using that $300 million.
Get some new material, 8:52.
Former USA Today executive Rudd Davis has updated his LinkedIn profile. He's now with a business consultancy.
Way to stay on that "non story" doctor ZZZZZ! You are way too experienced to actually investigate the story.
With heartfelt gratitude, I say "thank you" to GCI for the crappy stock and the incompetent and arrogant leadership at the top of all divisions. Just made a cool $1000 by shorting GCI for exactly one week. Awesome! Perhaps GCI could call for an even bigger stock buyback? Or could ya' triple the dividend again? Puleeeze? In any case, keep telling Wall Street analysts that GCI is nailing it, that we are digital leaders and that we know what we are doing, 'k?
Buybacks, for the most part,are financial engineering to inflate results. gannett has tried this before before the share price sunk badly. company should invest in its employees.
JimAny word on Bill Bolger, former VP of Production at Indianapolis. The search is on for his re-placement Whats the word in GPS land? Any production guys apply for the job, its posted on Career Builder http://www.careerbuilder.com/JobSeeker/Jobs/JobDetails.aspx?IPath=ILKGV0B&ff=21&APath=126.96.36.199.0&job_did=JHL5F0735D8YRYZPSMM
Gannett Publishing Services is seeking a General Manager for its Indianapolis and Lafayette, Indiana, manufacturing facilities. Under the direction of the Gannett Publishing Services, Midwest Regional Production VP, the General Manager is responsible for overseeing the overall operations and sales efforts of both the Indianapolis and Lafayette production operations. The production facilities are located approximately 50 miles apart. The General Manager will create and foster a challenging and stimulating environment that serves to retain and promote employees. Position reports to Bill Bolger, Midwest Regional Vice President.
Companies are generally not in the business of knowing when their stock is a good value. As has been noted earlier, NOBODY wanted GCI under $2 . . . but now at $15 it's a "good investment".Typically, companies overpay for their stock, meaning we're likely at or near a peak. Think about this . . . $300 = 20 million shares, somewhere about 8 - 9% of the float. Mark down this year's earnings, because next year's and the year after SHOULD BE 8 - 9% higher just by virtue of fewer shares. If GCI does show earnings growth, the narrative will be "earnings were enhanced due to proactive management directives" or some other gobbledygook.Another way to look at the buyback: your management and board have NO IDEA how to spend $300 million in a way that enhances and upgrades the product. But they ARE buying the stock with that nice dividend. THAT's where a lot of the money is going to go. There's other ways to be paid besides salary and bonuses.
Why does this general manager position have job requirements an the Florida Today general manager has none?
Jim said, "Former USA Today executive Rudd Davis has updated his LinkedIn profile. He's now with a business consultancy."I guess that's one way to avoid getting fired: working for yourself.
Erm, getting fired AGAIN.
The Indy job is going to be announced within the next few days, many will be happy with the new PDHappy Pressman
Business consultant. sounds familiar. oh, thats what virtually all the high power gannett executives were before they were rescued from the management scrap heap. proven talent.
So just what will HR tell companies when they call about hiring the Ruddster?
SWARM is the newest portfolio company under management by Verus. It is currently operating in stealth.Verus is run by Rudd and Ryan Denehy, former BNQT director out of NYC.
Actually, 1:58 p.m. is off the mark and 2:18 p.m. is closer to the mark. Stock buybacks increase the value of shares because: 1. you buy stock because it makes you an owner (hence the other name for stocks -- "equities") 2. as owner you are entitled to the earnings 3. each share of stock is a separate "claim" on earnings and 4. when the number of shares of stock decrease the worth of remaining shares increase because each now has a greater claim on earnings of a given size.Example: Acme Widgets has 100 shares of stock outstanding. It earns $100. Each share is a claim on $1 of earnings. Acme buys back 50 shares and retires them. It still makes $100. Now each share is a claim on $2 of earnings.GCI's recent dividend increase will and is intended to help put a floor on the stock price. Because the stock price and the dividend yield work in inverse. The more the stock price falls, the greater the dividend yield, and the greater the yield becomes the more attractive the stock becomes to investors, whose buying will bring the price back up.GCI management is absolutely doing the correct thing for a company in its circumstances. That is to say, a company with a prodigious cash flow and profits (which rightly belong to shareholders, the true owners of the company) that is in a no-growth industry. If managers can't use the cash to build more business, then their duty is to return it to the owners -- the shareholders.This ends today's lesson in Life In A Capitalist Society 101. I will yield the floor now to a Guild member who will tell the world that I'm a Romney-loving capitalist so-and-so. Or worse
Jim, please check out the situation in Lafayette/Opelousas, LA. The Daily Advertiser/Daily World operation in the last couple of weeks has lost a new publisher before working his first day, executive editor, ad director, and production director/general manager. Plus the 56-and-over buyouts. Major reorganization? Under performance? Dissatisfaction? Situation there getting dire.
6:51 -- Nice way to be both wrong and condescending. ("Condescending," incidentally, means "talking down to."A company whose stated aim is growth -- meaning a company whose earnings grow -- should be putting its money into the company itself. You know. Like Apple. Or other companies that grow earnings.Buying back 8-9% of the stock, even the company does it, is a prodigious waste of money from a company that chronically underfunds its staff and equipment. It's particularly wasteful in a company that aims to transform it, yet does not have the staff or equipment to do so. Incidentally, Gannett bought great gobs of stock before the bear market. How did that trade work out?
Things are so bad at Gannett right now I don't even have the energy to read the posts here. I can't keep up at this pace of working four peoples jobs and no one giving a rat's ass. It seems to just be business as usual and no sign of relief in sight. Corporate does not have a freaking clue what the hell is going on in the trenches. And they don't care. Gracia, if you really cared about your employees you would add more people and actually try to make things work. At the staff we are now these plans will never work, We can't keep up. No overtime, furloughs, we are burned out. We are done and ready to walk the hell out of this horrific place you call Gannett.
Speaking of condescending, here's a column by someone long gone from a newsroom now carrying water for the Knight Foundation. Blame the tradition-bound curmudgeons. I don't know anyone in my shop who pines for what were never good old days. We embrace technology. The point of the Pew study was that the news economic model is dead and that few will be paid a living wage (except the people at the top who get rewarded for giving the readers garbage and screwing over employees. http://www.knightdigitalmediacenter.org/leadership_blog/comments/20120305_importantly_but_not_surprisingly_pew_study_says_culture_is_a_key_o/
Just for the record, condescending man: In 2007, Gannett bought 1,793,689 shares at an average cost of $37.32. In 2006, Gannett purchased 467,000 shares at an average cost of $54.95.GCI closed at $14.41 today. Good use of shareholder capital? You decide.
11:26 I've researched this as well, using annual 10-K reports, and I get much higher totals -- with results that are even worse. (The figures you're using are only for the fourth quarter in each of those years.)These are the complete figures:In 2005-2008, Corporate bought back 28.4 million shares for a total $1.8 billion. The average per-share cost: $64. (And much of that money was borrowed.)Based on today's closing price, $14.41, those shares are now worth just $409 million.This table shows all share repurchases in 2005-2008, and last year.
1:58 had it right. To argue that the dividend yield creates a floor in the stock is pure bs. A stock's value is measured largely on its growth or earnings potential, aka the PE.Gannett's P/E is a paltry 7. The S&P 500's is 14. 6:51 is definitely off base, but on target in her "lesson" in capitalism 101. You can be a complete disaster as an executive, mismanage core assets and destroy shareholder value. Yet you still have a job and continue lining your pockets without a shred of remorse.20,000 jobs lost in five years. A new golden boy making 90 people "reapply" for their jobs. Morale and enthusiasm at new lows. Not a peep out of leadership.
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.
Subscribe in a reader