From a new Barron's magazine profile (paid subscription required) of CEO Gracia Martore, where she describes her 1985 decision to leave the very dull and risk-averse banking industry to work for Gannett:
USA Today, whose color-coded sections, brief stories, and infographics were then a new concept in the newspaper industry, had been launched three years before, and Martore found Gannett's emphasis on innovation appealing.
"I had lots of opportunities to go with companies where I could be responsible for two foreign currencies, and if I did a really, really good job, I could be responsible for four foreign currencies," she says. "That didn't appeal to me. I like to have a lot going on—lots of challenges."
"I had lots of opportunities to go with companies where I could be responsible for two foreign currencies, and if I did a really, really good job, I could be responsible for four foreign currencies," she says. "That didn't appeal to me. I like to have a lot going on—lots of challenges."
In a December 2003 Barron's story, when Gannett's stock was trading around $85, the magazine also gushed about the company's prospects, saying that CEO Doug McCorkindale was "on the prowl" to buy more media properties.
ReplyDelete"If the Pearson group wanted to sell the Financial Times, I'd look at it very closely," McCorkindale told the magazine. "Dow Jones [which publishes The Wall Street Journal and Barron's] is a great franchise, and if it ever came into play, I'd be very interested."
At the time, GCI's market capitalization -- its value on Wall Street -- was a whopping $23 billion. Today, with shares at $17.60, it's worth $4 billion.
Sounds a bit revisionist. She was McCorkindale's protégé, after all, and he was the epitome of risk-averse lawyer/beancounter. Hated big bets generally and USA TODAY specifically. And maybe he liked to see his name in print trash-talking about M&A, but everything was always overvalued (except more GCI stock—oops!).
ReplyDeleteAnyhow... it's hard to believe that anybody motivated by bets like USA TODAY would have hung around during the long cold retrenchment post-Neuharth.
Now Gracia is in charge of one currency that is completely foreign to her -- news. She, the directors and their minions run Gannett as if it were a widget factory, not a journalistic enterprise. And the sad results are evident.
ReplyDeleteWith all due respect, typical "journalistic" malarkey. Gannett management is hardly to blame for the decline and fall of the "news" business. To the contrary — and unlike any number of their peers — they accomplished something pretty remarkable: They managed to keep the widget factory solvent and operational — against all odds and the forces of creative destruction.
DeleteGannett’s management IS absolutely culpable in the “decline and fall of the ‘news’ business”, that is unless you don’t think giving away the majority, if not all, of it’s content online for free was smart.
DeleteIt wasn’t. That move alone greatly exacerbated its subscriber base decline, all to chase digital dimes that in too many instances were created by accounting "slight of hand" that took monies from print and moved it to online.
And, you can save how smart Gannett was as it’s hardly a leader, just a stodgy old company that is only now making moves it should have made more than a decade ago.
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DeleteThe simple economic fact of life is that there NEVER WERE and never will be enough chumps willing to pay enough for your precious content to support anything close to the resources required to produce it. You can fault Gannett, if you wish, for not pulling a rabbit out of a hat, but you can't blame it for the fundamental conundrum. Nor can you blame management for the fact that print subscribers have turned out to be all too mortal.
ReplyDeleteI concede that being the best looking horse in the glue factory is nothing to write home about. But when most of a company's peers have either disappeared or been declared insolvent, survival is an achievement.
P.S. It's "sleight", not slight. (And for that matter the phrase "of hand" is superfluous.)
Exhibit A: The Wall Street Journal. Its print subscribers gained access to walled online content over a decade ago and it built up added fees and features for it from there. They weren’t alone.
DeleteGannett could have easily done the same, yet ITS Borg-like management did not dare, nor value that type of simple innovation, going so far as to even demand its papers cease in those efforts. Only now does it act and even then, it is likely too little, too late, to escape what many view as a death spiral, one in which what Gannett really needs is to develop and or unleash a truly material, disruptive act to exit – a capability it’s never really demonstrated.
Applauding Gannett’s survival is a bit deceptive as it ignores many factors; notably how many of its peers acquired and or borrowed their way into weakened financial positions that an economic downturn helped finish off for many.
Look, if you seriously think you have a better idea, but all means go out, convince some investors, and do it. Then you can have the last laugh (and only then).
DeleteMeanwhile, I would defy you to name a single for-profit daily community newspaper in any sizable city anywhere in the English-speaking world that has followed your prescription and is not in the same boat as everybody else.
The fact is that the industry as a whole is a sweating ice cube about to hit a hot skillet. And neither the recession nor any one company's management (or capitalization) has a darn thing to do with it.
I completely agree with 8:06pm. This industry is more than likely finished in less than 5 years. It's merely on life-support at this point and there's absolutely nothing Gannett, McClatchy, Media General, or anyone else can do about it. Consumer behavior is changing. Consumers who are reading newspapers are dying - literally and the generations that follow have not grown up with a newspaper reading habit and will never develop one. And that means reading "print" online or anywhere else.
DeleteThe television business is next. When was the last time you sat down to watch a local television newscast? Ask anyone between 18-30 and you'll see where the future of that business is going.
If you don't believe me, read these:
http://www.businessinsider.com/tv-business-collapse-2012-6
http://www.businessinsider.com/for-whom-the-bell-tolls-it-tolls-for-tv-2012-10
Possibly, but then everyone said television would kill radio. It still exists, just not in the same way. Newspapers and television will probably do the same. Remember, not everyone can afford all those fancy gadgets.
DeleteSo she came here as a beancounter and has remained a beancounter. God help us all.
ReplyDeleteTake the money and ruin and run, right Gracia?
ReplyDeleteLooking back, remember how some people fell for and believed she'd do a better job running the company than Dubow? She's no better, if not worse: very power and money hungry and cares only about those at the top.
ReplyDelete