Gannett: See You in January
Newspaper people like to think of themselves as good storytellers.
But, lately, newspaper execs find themselves with fewer good storylines
to share. In fact, Gannett — the world's largest newspaper company —
is going to tell its official stories less often. Of course, we'll see
interim announcements, like yesterday's stunning one that another 10%
of its local workforce is getting the axe the first week in December.
(To get the color of what that cut means, check out Jim Hopkins'
independent Gannett Blog
today, with such tidbits as why "dead wood" at USA Today is immune to
the cuts, how the Indy Star could lose 95 positions and a building
necrology of those to be cut.)
Joining a trend among its smaller
brethren, Gannett told analysts last week that it will now be reporting
quarterly rather than monthly. It's not a big surprise, as other news
companies have made that change as well.
What's most
interesting about it is how hard it is to gauge print companies'
progress to digital, which is of course the key metric telling
analysts, journalists and small-d democrats what the chances of their
survival are.
Take Gannett's last reporting. It made a point of
saying it was now breaking out its "Digital Segment," this after
acquiring majority control of CareerBuilder, by paying Sam Zell $135
million for another 10% of the company in September, and acquiring
the rest of ShopLocal from Tribune and McClatchy. According to the
stats on its site, this division took in $77 million in the third
quarter. It's good that Gannett has brought all those numbers together
— some were previously in the impossible-to-decipher "all other"
category. Until we get some quarter-to-quarter and YOY stats with the
new accounting, though, we won't know much.
You get confused, though, if you listen to or read the company's webcast remarks
and answers to analysts' questions. There, the number we hear is $177
million in digital income for the quarter, with the $100 million
difference apparently due to much revenue counted more in the print and
broadcast divisions than directly in the new digital division.
Wow.
I'm assuming Gannett, good operator that it is, real does have a handle
on how much of its business is really digital and how much legacy,
print or broadcast. But I'm not sure. In addition, it's clear that many
newspaper companies as they bundle, unbundle and re-bundle legacy and
digital products have a hard time both internally and externally
sorting out what's what and what's where.
This last quarter,
Media General, for the first time I believe, provided a number for its
Yahoo!-related revenue, focusing on the HotJobs program. It brought
Media General $1.7 million in the third quarter.
Most
importantly going forward, whether monthly or quarterly, is to get a
sense of the Yahoo Bump overall. That'll be a combination of the
HotJobs recruitment revenue and the display ad revenue earned by
papers' deepening participation on Yahoo's APT ad platform. Since
Yahoo-related revenue is likely to be the prime driver of growth for
those companies in the news consortium (40% of US papers), we'll need
to see that number to really see how much of a transition papers are
making.
Overall, the early 2009 numbers will put to the test
one of the surprising points made by Gannett CEO Craig Dubow in last
week's call.
I believe all of this makes it clearer than ever just how much our
industry has been in the throes of a downturn that is more cyclical
than secular. Next, I want to remind you that Gannett has faced
cyclical downturns before and we have a proven ability to manage
through them. That hasn’t changed. Also, I will stress my
confidence that once this downturn cycles through, our core revenues
will rebound and together with that improvement in the core, we will
see continued growth in digital.
More
cyclical than structural? I hope he's right, but I think the reverse is
true. Newspaper fortunes continued to decline and more deeply, in the
recent relatively good times. The financial meltdown is plainly adding
on to all that structural change, and we'll see some bounce if
consumers buy houses and cars and HDTVs some time next year. A bounce
will not be a rebound though to halcyon days, and Gannett shows it
knows that, as we see in what are major job cuts.
Make no
mistake. Gannett matters. While often the whipping boy among
journalists for its often-middling journalistic performance, it is
still the largest newspaper company on the globe, though Rupert
Murdoch's news group may surpass it soon.