Monday, June 25, 2012

Stock | That wasn't Craig Dubow's CEO last week

This one, Gracia Martore, came off as polished, confident -- even humorous. She not only made jokes, she appeared to ad lib new ones when others fell flat.

Introducing Gannett executives at a Wall Street media analysts conference on Thursday, she noted that Bob Dickey is president of the U.S. community newspaper division -- “when he’s not pitching for the New York Mets.”

You could practically hear the crickets chirping.

"Come on,” she urged her audience. “There's got to be some baseball people. R. Dickey? Never mind."

OK, maybe it was entirely scripted. The point is, Dubow -- who stepped down in October -- wasn’t exactly famous for light-hearted presentations to the men and women of Wall Street who can drive GCI’s stock price.

But now, as the second quarter winds down, the larger question remains: Will a newly rebranded CEO win over a Wall Street accustomed to a history of promises that often weren't kept?

Dealing the Chicken
Martore, appearing before the Media and Entertainment Analysts of New York, talked up the company’s initiatives, from DealChicken to the new paywalls to the growing USA Today Sports Media Group.

Wall Street, in turn, seemed in a buying mood. Shares closed up 3.2% on a day when the broader market tanked. That jump followed a month that’s been good overall: Since closing at their most recent low, $12.13 on June 1, GCI shares have clawed their way back -- closing at $13.50 on Friday. That’s an 11% gain -- far better than the S&P 500 index, which rose a smaller 4.5%.

Martore, despite being Dubow’s closest hand, is still enjoying her own honeymoon on Wall Street. The newspaper paywalls are being rolled out. USA Today Publisher Larry Kramer is just a month into his hoped-for turnaround of GCI’s most visible brand. The Sports Media Group continues to forecast $300 million in new revenue by 2015.

Still, newspaper publishers don’t have the best credibility on Wall Street. And GCI, the nation’s biggest, is among many that have made big promises that later fizzled out.

Don't forget Moms
In his annual letter to shareholders in early 2010, Dubow touted the Moms Like Me social network for female consumers as a great example of a home-grown digital enterprise. He quoted an Advertising Age article that said any family-focused marketer “should have a commanding presence here.”

Less than two years later, this past October, Corporate pulled the plug on Moms, saying it was no longer worth the effort.

And remember the dividend increase and stock buyback in July?

“We believe Gannett’s stock is a terrific value and a very attractive investment,” Dubow said in a statement at the time. “Together with this dividend increase, these actions by our board reflect our sound financial status and our ongoing desire to return value to shareholders.”

Of course, that was in July 2006 -- when GCI’s stock was at $41.60.

The more recent July dividend boost, last summer, included a similar pledge from Dubow: “We are committed to creating value for our shareholders and believe our stock is an outstanding investment at current price levels.”

GCI then closed at $12.45 a share, and that’s after adjusting for the July 18 dividend increase, plus a second one this past February. So, now, nearly a year later, shares are at $13.50 -- once more, a better performance than the S&P 500, but hardly gangbusters, considering the dividend has soared to 20 cents a quarter from 4 cents.

No kidding
Wall Street often doesn’t sweat the small stuff. Moms Like Me? Metromix? Anyone even remember Cozi? Big investors ultimately focus on the big numbers, like revenue. Last week, one of the analysts asked whether print advertising sales would ever start growing again.

On this one, Martore hemmed and hawed, before finally saying that total newspaper and other publishing revenue might rise 2% by 2015 -- or perhaps not at all.

And that’s nothing to joke about.


  1. We still run house ads for Cozi, whatever the heck it is.

  2. That publishing estimate is straight from the investor day presentation, so it's not quite fair to imply they "hemmed and hawed".

  3. 10:04 My reference was to her remarks before she finally provided those percentages.

  4. Let's stay in the baseball theme. Saying Martore is better than Dubow is like congratulating the Yankees for beating the Mets. It's not exactly a very high bar.

  5. The post falsely insinuates that the speaker extemporized just long enough to make up a number, when in fact it was old news.

  6. If we're talking about the bar being low, this blog is a great place to start.

  7. It doesnt matter how dynamic you are. it is about financial results. on that front, she has yet to deliver. neither has she won over the furlough and layoff stressed content providers.

    1. I always marvel at this "stressed" co tent provider comment. Have you walked through USA TODAY? Stressed? Really?

    2. There are a wide swath of people who actually write/report/edit most days. The actual doers who will probably be jettisoned first.

      But you are right. plenty of useless, incompetent dead weight.

  8. 11:15 On the replay recording of the presentation, the exchange starts at about 1:16:20.

    Here was the analyst's question: Is there any point at which print advertising turns up?

    Martore's response: "We sort of don't bifurcate it as to print vs. digital in our publishing or in our broadcasting. We look at it as finding solutions for customers. And whether those solutions include a video component, a digital component, a mobile component, and a print component or a TV component -- that's all providing a solution to our clients. So what we have said is that we believe overall in publishing that by 2015 we will see growth of anywhere from 0 to 2% in the publishing segment. So we're looking at it much more holistically."

    That is what I call hemming and hawing. Indeed, she never directly answers the question posed: Will print advertising ever grow again?

    For now, you can listen to the replay yourself by following the instructions on this page.

    1. Jim do you think print advertising will ever go up for any newspaper company in the USA?

  9. It's R.A. Dickey, Gracia, not R. Dickey. Stop acting like the Chicago Cubs of CEOs.

  10. 1:39 Probably not -- although there's always the possibility of a print ad version of a dead-cat bounce.

  11. It's also worth noting that any of Corporate's financial forecasts are subject to risks that are outlined in various regulatory filings, including the annual 10-K report to the U.S. Securities and Exchange Commission.

    All companies publish warnings to investors under the heading of "risk factors," and the text is considered boilerplate -- until, of course, a company gets sued, and then lawyers treat it as all too real.

    Here's one item under the risks section in Gannett's most recent 10-K:

    "Competition from alternative forms of media may impair our ability to grow or maintain revenue levels in core and new businesses. Advertising produces the predominant share of our publishing, broadcasting and affiliated web site revenues as well as digital segment revenues. With the continued development of alternative forms of media, particularly electronic media including those based on the Internet, our businesses may face increased competition. Alternative media sources may also affect our ability to generate circulation/content revenues and television audience. This competition may make it difficult for us to grow or maintain our broadcasting, print advertising and circulation/content revenues, which we believe will challenge us to expand the contributions of our online and other digital businesses."

  12. Can anybody recall any effort to save print advertising or the printed product. The public has spoken and so has Wall St. We have tried to as a industry to be successful in the digital arena and have floundered for years.

  13. Martore's number will be up when she cannot even come close to delivering the $1OOM as the overall business continues to slide into the ocean.

    Gannett is gone, and the figureheads with their cutesy comments are the ones who are nosediving the company. The buck stops here? I think the buck stops in Martore's purse, and she should be ashamed of her presumptive and sophomoric behavior.

    The jig is up, and everyone affiliated with Gannett's MC and BOD should shudder with shame.

  14. Lets face it, it doesnt matter who in charge when you are producing second rate products and raising prices on them this only serves to drive revenue in the short run. But it alienates consumers ovee the long haul.

    Martore doesnt seem to care. Her window is retirement in five years. Meanwhile, the grasping at straws and hocus pocus act on the revenue side will eventually fail. I dont know how they dont get it in their heads that if yiu improve the product, people will want to use it. Hell, they might even get used to paying for it if the price value equation makes sense.

  15. "improve the product, people will want to use it"

    LOL. If only they had made superior buggies and buggy whips, all those blacksmiths would still be employed.

    Wake up!


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