Saturday, October 12, 2013

Newspapers' revenue dive enters 8th straight year; for Gannett, analysts forecast a bleak second half

As digital advertising sales soared 18% to a record high in the first six months of this year, publishing revenues of the publicly traded newspaper companies slipped an average of 5.5% to enter an eighth year of unabated decline, according to industry blogger Alan Mutter.

In the absence of information formerly reported by the industry's trade association, Mutter said yesterday, the 5.5% decline is based on an analysis of the financial statements of the 10 publicly traded companies that own domestic newspapers. Those include Gannett.

In fact, Gannett's revenue decline was much smaller than the average for the 10 companies. During the first half, combined advertising and circulation revenues fell just 1.1% to $1.7 billion. Although advertising fell 5%, circulation jumped 7.3% after Corporate jacked up subscription rates an average 25%.

Gannett doesn't break out digital advertising revenues, lumping them in with overall digital results, so it's impossible to know how GCI's digital ad sales compare to the 18% figure cited by Mutter.

We'll see how the third quarter fared a week from Monday, when Corporate reports financial results. Analysts are already braced for bad news. They forecast overall revenue will dive 2.9% to $1.27 billion. For the current, fourth quarter, they expect the situation to only worsen: Revenue will plunge 7.5% to $1.4 billion, according to consensus estimates in a Thomson Financial survey.

Missing: TV results
Those quarterly declines are because the company doesn't have last year's political and Olympics advertising in the broadcasting division to prop up results. Also, the big newspaper subscription rate hikes have now fully cycled through. And growth in the Digital Segment is threatening to flat line.

Finally, GCI's takeover of TV company Belo isn't expected to close before the New Year -- and that's assuming the federal government reopens in time for regulators to sign off on the deal. Any revenue gains from Belo won't occur into sometime next year.

Bottom line: CEO Gracia Martore and her team have their backs to the wall. Unless they can pull a revenue rabbit out of their hat, the outlook is grim.


  1. Worth noting, as we near the third-quarter financial release on Oct. 21:

    The figures Corporate reports on overall digital revenues are misleading at best. Here's why.

    When Corporate instituted the paywall in early 2012, it simultaneously boosted subscription rates. Existing readers were told the new, more expensive subscriptions included digital access -- a carrot, if you will, to keep them happy.

    But in fact, that digital access was bundled into their subscriptions; it wasn't free. Corporate then reported that portion of their subscriptions as digital in quarterly results, thereby pumping up overall digital results.

    As near as I can tell, this accounting maneuver has not been clearly disclosed to stock analysts or to the U.S. Securities and Exchange Commission.

    However, it should become more evident with the third-quarter results, when overall digital growth is expected to show a significant slow down.

  2. Careerbuilder is also included in their digital revenue numbers, don't forget.

  3. Martore and her senior leadership team have their backs to the wall? Seriously, Jim, if Craig Dubow was allowed to rin this company into the ground (while his head was stuck in it) Gracia and her BFFs have nothing to worry about.

  4. Here's a question i hope someone can answer: the Gannett matching stock in our 401k funds. Do they pay out the dividend that other shareholders get? Dont seem to, but I cant tell from my statements.

    1. Why don't you just look it up on the benefits web site? (Why would you expect to get reliable information from an anonymous stranger who for all you know is a 14 year old in Belarus? Sincerely curious.)

    2. Well, just think about it. I'd probably get the same reliable information by calling a 14-year-old child in Belarus than calling bumfuck Kentucky for circ info, correct?

      And I'm still laughing about the benefits website.

    3. 2:37 and 10:01 are prime examples of how worthless this site is.

      Give me an L! Give me a T! Give me a Z!


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