The Arizona Republic was one of the company's biggest revenue and profit gainers, as the state's especially frothy housing boom drove millions of dollars in new advertising to the Phoenix paper -- until the bubble collapsed last year.The Republic's total ad sales rose to $498.1 million in 2006, up 7% from $467.1 million in 2005, internal Gannett documents show. As a result, the paper's share of all company newspaper ad sales grew to 9.3%. And its profit margin stood at 29.76% at the end of 2006.
But through the first three quarters of last year, Republic ad sales fell 13%, to $319.2 million vs. $367.6 million during the same period the year before, the documents show. Meanwhile, the paper's profit margin dived to 25.43%.
I don't have current data for 2008. We know, however, that the Republic was hit even harder this year as the real estate bust intensified -- joining papers in Florida, California and Nevada, now pulling down Gannett's overall revenue and earnings.
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[Image: yesterday's front page, Newseum]
Blame Phoenix? Sure, why not. However, historically, the southwest has always suffered booms and busts in business. Remember the S&L crisis of the eighties? A privately owned Arizona Republic always maintained it's footing through good times and bad. A concept Gannett could not grasp if its life depended on it. And it does!
ReplyDeleteI have always maintained that Gannett's purchase price of Central Newpapers, Inc. (including The Arizona Republic) for $2.6 billion back in 2000 was waaaay too much. But this is what comes when someone (or some thing) is fixated on the prize. Gannett had salivated for years over the Republic and Indie Star. A boss once told me, "Be careful what you wish for." Now, Gannett is hardly worth what they paid for these papers and is in the process of killing them to save themselves. Disgusting.
ReplyDeleteIn Phoenix there are alot more reasons than the economy that is dragging down the paper; the press manager in charge of USAT cannot if asked do a press layout yet is in a constant mode of belittling of employees; seems I have read several post on this sight all over the country with similar management gripes. When moral is high many more good ideas seem to surface.
ReplyDeleteWhat's amazing to me is that even with profit margin hovering around 20% (assuming it's come down even more since you got the documents) the company has chosen to go through this blood letting. People want to know why we're (employees) demoralized? Executives at any other industry in this country would be doing handstands with + 20% profit margins.
ReplyDeleteBut not freakin' Gannett. Management could be using some of that huge profit margin for R&D to figure out what we need going forward or even to put out a better product that people actually want to read.
But they're fixated on getting rid of experienced people who know the community and hiring 20 somethings who can't find their asses with a map and compass and incapable of writing a coherent brief.
We are so screwed.
The Republic has been degraded so much that long-time readers are rebelling and turning their backs. Corporate needs to hold the line and broadcast stability, not adopt policies that show the company is unstable and incapable of managing this property.
ReplyDeleteThe interesting thing is its profit margin is ten times that of the USAToday. That's the amazing stat.
ReplyDelete"The Republic has been degraded so much that long-time readers are rebelling and turning their backs."
ReplyDeleteFunny since there are signs in the building saying Sunday home delivery has gone up higher than 2007.
I'm not an employee, ex-employee or anything like that, just an interested observer who has lived in Phoenix for many, many years. If Sunday home delivery has indeed gone up (which I find doubtful), I would attribute it to population growth, not more people clamoring to get the paper. It is barely a shrunken shadow of what it was pre-Gannett. As a literate, informed person, it is embarrassing that it is the paper "of record" for the state.
ReplyDeleteAlso, perhaps home delivery has gone up on Sunday, but what about the total paid circulation number? Is that up, too?
ReplyDeleteI agree; the Republic is a shadow of its former self. The past three years in particular have seen a spectacular decline in quality. As a subscriber, it is very disappointing.
I especially remember when they "shrunk" the Monday edition and made a big hoo-hah fanfare about how they were doing it to "help you, dear reader, because we know you're so busy on Mondays that we want to condense the news for you." That's a paraphrase, but brutally insulting to any reader with more than an ounce of IQ. Then they downsized the Valley/State section and invited "guest reporters" to submit articles, which of course, many PR folks do. So one whole page is often a PR piece NOT EVEN WRITTEN BY A REPUBLIC STAFFER. Now the size of the newsprint has shrunk, again "for your benefit, dear reader". Mistakes and typos are way more frequent and we only still get driveway drop subscription because I'm getting older and scan the obits every day just like my dear old mom used to do :) It's also an ingrained habit to read the paper at breakfast, but "read" is more like "scan" for something meaty to read. It has become a joke. Sad, but true.
ReplyDelete