Tuesday, June 22, 2010

For USAT, surprise news ushers in a long summer; Hunke's team now hunts for paper's 'future path'

Summer officially started yesterday, and today's forecast high in McLean, Va., home to USA Today, is a steamy 93 degrees.

But that's not the only reason working conditions have grown even more uncomfortable at Gannett's biggest newspaper. Some 1,500 workers have been left anxious about their future employment since Publisher Dave Hunke (left) surprised a staff meeting last week with news the paper would be reorganized in the weeks ahead.

He did not reveal many particulars -- including, most crucially, a timetable. Anonymous@7 a.m., commenting today with the authority and phrasing of a manager, wrote: "Hunke said the details had not yet been worked out; there are teams working through the details and he is listening to them as they help develop the future path."

Indeed, one Gannett Blog reader said Hunke didn't acknowledge layoffs were part of the deal until well into Thursday's meeting.

"He called them 'involuntary layoffs,' and it didn't even come up until the Q&A session and someone asked if USAT would be hiring more multimedia people,'' Anonymous@8:38 a.m. wrote yesterday. "Either Hunke buried the lede or he has so little regard for us that he just plumb forgot to mention the fact that some of us are going to be laid off, and soon."

Their comment continued: "So if you didn't know you were a fixed cost and actually thought you were a valued employee who helped build the so-called legacy product, that should open your eyes."

Hunke's disclosures weren't much of a surprise to Anonymous@2:35 p.m. today, however. They write: "We have all known there will be a reorganization when Hunke was brought in to deal with the circulation and ad declines. What we don't know is the details, and Hunke was not forthcoming on details at that meeting."

Busted business model?
Whatever the "future path,'' it appears USAT's long-standing business model, one unique among Gannett's 100 dailies, may be broken. Overly dependent on the business travel market, where it fed millions of heavily discounted copies to hotel buyers, the 28-year-old paper continues to be roiled by a downturn in business travel, amid heightened competition with its two national rivals: The Wall Street Journal and The New York Times.

Circulation plunged 14% from a year ago as of the most recent reporting period, the six months ended March 31. Advertising revenue fell 11% during the first quarter, far worse than the overall 8% decline among Gannett's papers, public documents show. One Tuesday last month, the paper's main A section carried only two advertisements.

Hopes for even a small bump in subscription revenue from the new iPad app starting July 4 were dashed when a USAT executive recently acknowledged that Gannett had delayed plans to start charging for the software. Meanwhile, nothing yet has come of speculation that USA Today is negotiating a deal with Wall Street Journal owner News Corp., one that could result in a sharing of advertising sales or news distribution.

Hunke as White Knight
He was brought in to turn around USAT in April 2009. At the time, Hunke was riding a wave of success: As CEO of the Detroit newspaper operation, he had led a major reorganization where the two papers there reduced home delivery to just three advertising-rich days each week. The Gannett-owned Detroit Free Press had won a prestigious Pulitzer Prize for reporting that led to the mayor's resignation, conviction and jail time.

But now, more than a year later, a solution for USAT's woes has proved elusive. His revelation that a reorganization is in the works suggests Corporate is losing patience. Gracia Martore, named Gannett president nearly five months ago, still holds the position of chief financial officer. One can easily imagine that she and Hunke are spending lots of time together as his team of managers develops the new business plan.

Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

[Image: today's paper, Newseum]


  1. No question Martore is not happy with Hunke's performance. At every moment, Martore, unprofessionally, takes shots at Hunke and the USA Today management as being "out of touch" and "clueless" when it comes to managing a business.

    It is clear that the Hunke Wunderkind from Detroit is losing his luster.

    As a side note, Craig Dubow has been no where to be seen, except when he has the Gannett paid, personal driver picking him up and dropping him off at his houses and his office.

  2. Readers who found themselves put off by all the trolls who have been running around lately should take note.

    Jim is now confirming the rumors that Hunke mentioned layoffs in the most recent USAT meeting. This is usually how it works.

    The trolls always get busy right before bad news breaks. The concept seems to be that they can cushion the blow by burying the news within a bunch of ridiculous arguments about Jim's qualifications as a journalist, etc., etc.

    The lesson here: When the trolls are out, you should pay even more attention to what's being said by everyone else. It's probably going to be important.

    My only hope is that corporate didn't actually hire these idiots to try to disrupt the conversations. That would seem so silly, yet the trend of extra troll comments during big news cycles is undeniable.

  3. Actually, Dubow held a fairly well received staff meeting with reporters and editors at USA Today last week, and has also been involved in iPad planning.

    He is hardly 'nowhere to be seen."

  4. The real lesson here: If you circulate enough bullshit and throw enough crap at the wall, some of it might be right.

    No one is fooled, drones. Your information is wrong and worthless. You know nothing about the company. And Jim is pathetic.

  5. 2:16 pm: This post is based largely on regulatory documents, published reports, my ongoing review of USAT's page and advertising counts, and comments by my own critics.

  6. I don't normally quibble with Jim's summaries, but I would not characterize Hunke's disclosures as much of a surprise. We have all known there will be a reorganization when Hunke was brought in to deal with the circulation and ad declines. What we don't know is the details, and Hunke was not forthcoming on details at that meeting.

  7. Let's see, we have Gracia who has not been able to hire a new chief digital officer, and now we have Gracia who hasn't been able to develop a plan to save USA Today. Hmmm. Is someone hanging Gracia out to dry by assigning her GCI's most difficult decisions? Wonder who that might be...

  8. Just goes to show you that if you can't actually write content people want to read, you sell fewer newspapers and lose your job.

    Go figure.

  9. It is amazing to me that Jim can write over 30 inches of copy on this situation and every single inch of it has a negative tone. He provides no context as to how media corporations, along with so many other industries, are still facing horrible economic conditions, brought on by the financial apocolpyse triggered by banks and mortgage companies. It will continues to wreck the economy for many years to come, but Jim chooses to conventiently overlook THAT REALITY and torpedo Gannett and its leaders because he is a bitter man still reeling from the financial beating he took when he first walked away from this sorry sorry blog,.

  10. This post is about USA Today, not about Gannett.

    With that in mind, do you want me to compare USAT's performance against that of other media companies, or against broader economic indicators? As USAT is lagging Gannett's newspaper division generally, I'm not sure other comparisons will be any more flattering.

  11. Measured against its two national rivals, USAT's advertising results in the first quarter were worse, according to regulatory filings.

    Advertising revenue at the New York Times Media Group -- comprising mostly the NYT -- fell 7.2% from the year-ago period vs. USAT's steeper 11% decline.

    Meanwhile, ad revenue at The Wall Street Journal soared 25% during the first three months of this year (owner News Corp.'s fiscal third quarter).

  12. 6:58 Blame the banks and the real estate market if you wish, but I blame the media corporations:
    -- It wasn't the banks and mortgage companies that refused to innovate and ignored challenges from the Internet like Craiglist that took over their classified sections. Don't look now, but Yahoo and Google are doing the same with display ads.
    -- It wasn't the banks and real estate market that forced newspaper executives to siphon off the profits from their monopolies, with a good percentage diverted into their own pockets.
    --It wasn't the banks and real estate markets that forced newspaper companies to load down their firms with debts they could never possibly pay.
    -- It wasn't the banks and mortgage companies that persuaded newspaper companies that this was just an ordinary recession, and that advertisements and circulation would return to pre-recession levels once it ended.
    -- It wasn't the banks and mortgage companies that persuaded Gannett to gut its community newspaper division and get rid of a cadre of loyal and productive employees.

  13. I speculate that Dubow will leave at the end of the year and cash in on all his stock options.

  14. The drum beat is on. Say good bye to Craig. No way he makes it through the 4th quarter.

    At some point, the board will tire of these stall tactics, the cutting, the gutting, the mess that has become of the newspapers in the Gannett chain.

    What a tremendous mess. It's time to move on, Craig.

  15. I think the surprise -- other than the fact that the announcement had the whiff of afterthought -- was that 1) we were told in advance, which we weren't last time, now that severance is tied to collecting unemployment and voluntary layoffs are a thing of the past; and 2) these layoffs are coming earlier, at the end of the third quarter instead of the fourth.

  16. I really and truly resented my furlough this time, knowing that the paycheck I depend on went straight into Craig Dubow's pocket and NOT to keep the presses running and people employed as we were led to believe.

  17. Hunke's plans in Detroit flopped. Big drop in print readership without corresponding bump up in web readership. Now Freep restoring 7-day home delivery. Hunke and Debow need to go now. Matore deserves a chance to fix things.

  18. Hey Hunke lets layoff more people so you can have a 6 million dollar bonus bonus next year and not a 4.5 million dollar one. Screw the hard working persons that make this place what it is today.Take the pay lay them off furlogh them but make sure to put gas in the corp jet, nice new corp buildings and vacation places you get my point you fat asshole.

  19. To Anonymous: 6/23/2010 10:06 AM

    Hang in there and be thankful it was just a furlough. After 163 resumes and a year of looking for a new opportunity in journalism…the reality is not much better. Few have the answers to what the future holds in our profession all we have is the opportunity to refocus our dedication, passion and skills to building new readership both on the web and print.

  20. Will the Board of Directors really tire of Dubow? I don't know. The history of the board is to go along with whatever management says. Some of the board - Hastie, whatever her name is - only seem interested in fattening their own wallets without having a vested interest in the company.

    This board has not only had a let the employees be damned attitude, it's had a let the shareholders be damned attitude. If the board cared about the shareholders - beyond the corporate tower - it would have withheld bonuses and percs. More importantly, it would have responded long ago to Craigslist, etc., instead of sitting on its hands and waiting for a white knight to gallop out of Gannettland.

  21. Martore is just as much to blame as Dubow for these shambles. Is she working from home in Cape Cod these days?

  22. Journalism or not, as Jim notes, the business model at USA Today is "busted". Complaining doesn't resolve that fact that the outside forces demanding change aren't controlled within the walls of anyone's office or the towers that house a company. USA Today is forced to make dramatic changes in structure independently of the leadership or personalities involved. It's simply time to accept the changes every other media company has struggled with and be thankful (or not) that it took so long. I get it that people want to place blame, but that's just taking the easy way out.

  23. Martore uses the corporate jet every weekend to take her to Cape Cod. She and Roxanne Horning use all the corporate tickets for their own personal use. This place is a joke.

  24. I do not know whether Martore uses the jet for personal use that extensively -- if at all.

    In any case, however, executives using the jet must reimburse the company, although at a rate deeply discounted from prevailing costs. I don't know the exact formula.

    These figures are reported annually in the shareholder's proxy report with the SEC. The jet's destinations are not disclosed, however.

  25. God knows what they are cooking up. It scares me because, let's face it, these are not smart people. Dubow, Martore, Hunke -- they are clearly incapable of thinking strategically. Look at the bonuses they stuffed into their pockets after mass layoffs and forced furloughs. Even an immoral person with a modicum of intelligence would have been savvy enough to recognize that as a tactical error and tamped down their greediness.

    Nobody, but nobody, trusts them now. The sad thing is, these are supposed to be our leaders.

  26. 8:39 p.m. got it right. Corporate simply feels above the fray, above the pay freezes, hiring freezes, and increased insurance costs that it imposes on others.

    I hope that Dubow and Martore read this blog or at least have their trolls prepare morning briefings.

    Not that it would mean much. These people simply lack tact and common sense.

    Last year, just as everyone was on the verge of learning whether they would be chopped, Dubow had the bad taste to send out an email telling how well he was recovering from surgery, and how much he was looking forward to returning to work.

    I've got news for you, Dubow. No one cares.

  27. So are you saying that Hunke was hired on the strength of the reorg in Detroit, yet some of the ideas he implemented turned out to be unworkable in the long run? Terrific.

    I'm wondering if he's getting input from actual staffers. There are some very astute people working in the trenches at USAT. Why doesn't he call a townhall-type meeting and get our thoughts on whatever it is they're planning instead of springing it on us when it's already too late to point out the obvious flaws?

  28. In regards to 1:04 p.m.....Ask the workers for input? You've gotta be kidding! In Westchester, the honchos sit around and wait for corporate to lead the way. They say they don't what they're going to do just a week or so before the big layoffs. The peons are called in, told what's what and dismissed.

    This is the Gannett way, and a key reason I sold all my Gannett stock in the mid-1990s. The corporate culture is a broken model, and the company's leaders are so out of touch it's pathetic.

  29. Ask the workers for input? Seriously? They would suggest everyone get a raise AND a bonus, just like the leadership. It would be no different. What a joke.

    Has anyone ever read Animal Farm?


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.