Saturday, February 05, 2011

Earnings | Amid decline, print is still the engine

Table shows revenue by segment, 2007 vs. 2010, in 1,000s; bigger spreadsheet shows revenue by segment for all four years, 2007-2010

Across the industry, publishers including Gannett are pouring resources into digital efforts as readers abandon print products.

But newspapers and other print businesses remain GCI's No. 1 source of revenue, albeit a smaller share. In 2007, for example, the company's approximately 100 newspapers, weeklies and magazines comprised 83% of the total $7.4 billion in revenue. Of that, 66% was print advertising, and 17% was subscriptions and other circulation.

Fast forward to last year, and print was still tops: 70% of GCI's total $5.4 billion in revenue came from the publishing side, last week's full-year 2010 financial report shows. The purely digital businesses, including CareerBuilder and ad-services firm PointRoll, accounted for just 11%. Even when you throw in digital revenues from the publishing and broadcasting segments, digital is still just 18% of the total.

Bottom line: For all the disparaging remarks made about print, it's still driving GCI's prosperity.

Earlier: GCI's revenue devil is in the details


  1. Could you do a graph that has all of these elements overlay: GCI total employment numbers; total revenue; total profit; total number of corporate staff and execs; share price; number of newspapers and TV stations; revenue of TV; revenue for print; digital revenue; and CEO compensation.
    All the charts would need to be scaled to sim ratios before you extracted the XY numbers to overlay the lines YOY since 2000.
    If you could get someone to send you the national retail rev numbers for newspapers, try that too.

  2. 3:04 Indeed, I could do that. But I don't have access to one important piece of data: the number of "corporate staff and execs" over time.

    It's also a tricky number. There are the Corporate employees in McLean. But I believe publishers, general managers and local site VPs such as advertising directors, are also considered Corporate staff. I once heard that even managing editors are considered Corporate.

  3. Print is down nearly 50%.

    Employee count probably down the same.

  4. That spreadsheet demonstrates why Gannett is screwed long term. Print is on its deathbed. Just once I'd like to see Gannett buy and already profitable news website and do something with it.

  5. They weeded editors and execs at local properties off corporate over the years, but always charged the local properties for that payroll. The execs enjoyed some of the privileges but local props still footed the CC bills and cars. Pubs are probably the last holdouts, and probably not all pubs anymore.
    The bigger issue is McLean staffs that are not USATODAY. The structure for the newspapers is built to control properties rather than enable their local ideas and local vendor relationships. But that is another issue.

  6. Compare current day revenues to 2006 and much sharper declines result, notably with…

    Print Advertising $5,275,650 vs. $2,710,524 in 2010.
    Broadcasting $854,821 vs. $769,580 in 2010.

    Total Revenue in 2006 was $7,847,613 vs. $5,438,678 last year. Losses like this are exactly why profits and earnings per share are now half what they were back then.

    Gannett can attempt to talk a good game about its “improvement” to entice investors, but one look at insider transactions in the last twelve months speaks something very different:

    - 0 Buys
    - 11 Sales of more than 209,000 shares.

  7. This is where the meat of the story is... Businesses that are leaning into the future don't get "surprised" by market flux. They actually get a pass to make needed changes and fast forward in their strategy. Gannett may or may not pull a Kodak here.
    Kodak was too wonky and controly on their digital strategy, and really moved too slow while others just zoomed on by. There are some other parallels here..

  8. Digital showed great gains in a few years, what part of those gains were from acquisitions?

  9. ...and what part of those gains were from "shifting" print dollars internally?

  10. 12:24 This is what I keep wondering. For example, if Sue's Furniture Store buys a $1,000 print/broadcast advertising contract that includes $200 in "free" online ads, how does that get counted?

    Is it $1,000 in print only? Or is it treated as $800 for print and $200 for online. Seems to me that a publisher/TV general manager would be awfully tempted to choose the latter, since it suggests that digital is doing well.

  11. Jim – It all depends on what Gannett wants to “grow,” though you should know newspapers have been playing the revenue assignment game well before the internet arrived.

    Typically, when a daily and non-daily print buy was bundled, the daily kept the bulk of the money to “maintain” its average rate and revenues. The same goes on now with the digital, though that area has to show growth. The lessor known story is how centralizing functions have further blurred those lines as advertising sales, editorial costs, etc. have been manipulated as well and not all good.

    For ex: a merger of one operation’s daily and weekly sales teams resulted in a near doubling of its weekly's sales expenses for virtually the same revenues for the weekly group. Sadly, suits from a far won’t know those games have been played, they’ll just see declining profits at the weeklies all of which they’ll erroneously use to justify more cuts be made within that group.


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