Valley PR Blog

Gannett says economy causes earnings crash

By Len Gutman on July 17th, 2008 In Media

What’s black and white and read all over? Apparently not the Arizona Republic.

Industry giant Gannett reported horrific earnings on Wednesday, down 36% in the second quarter versus last year. But what strikes me is the reason for the tumble, according to Gannett’s president and chief executive, Craig Dubow:

The weakening economy had a dramatic impact on our results.

While the economy may have had an impact on advertising revenues, take a look at this five-year chart of Gannett’s stock price:

I’m no financial analyst, but this is a nasty chart by any measure. In five years the stock has gone from around $78 to its current $16.57. The economy is responsible? Some blame the rise of the Internet. Some blame the corporate ownership of media. Some blame the indifference of younger generations. I believe this downward trend has much more to do with the quality of the product itself.

You can’t do the things Gannett has done and be surprised that business is down. They have laid off so many veteran reporters, and others have left for greener pastures, that the quality of journalism left behind is mediocre at best. When I came out of J-school in the 80s a good entry-level job was at the Gilroy Dispatch covering town council meetings. Today the Republic has interns covering major stories. This is not a knock on the young journalists — it’s just that they haven’t cut their teeth or paid their dues. The coverage suffers. Add to that a shrinking paper and increased ads, and all you really get is an ad mailer. Hell, the Republic sometimes feels like Val-Pak with a few stories thrown in.

Because of the skeleton crew the coverage is incomplete. An in-depth story is rare. The Republic is so ad-driven they cover up the actual news with advertising stickers for crying out loud. Even when you do get some news it’s more and more AP and other wire stories, or Wall Street Journal reprints. The front section is two pages of copy and 10 pages of ads. The Living section is six pages on a good day. The Valley section is loaded up with community blurbs and reprints from the community tabloids. Of course people are going elsewhere for their news.

Sure, you can blame the economy and the other factors and there is some relevance there. But truthfully, if Gannett wants to uncover the real problem it should just look in the mirror.

Comments

As a former reporter, lifelong news junkie and habitual subscriber to local papers in the cities where I live, I couldn’t agree more. Reading the Republic has become irritating and unpleasant. I’m also on the Republic’s “reader” panel,run by a company in Sweden of all places, and 99% of what they “survey” has to do with advertising, with little to no focus on editorial content.

I recently cancelled my subscription and now cherry pick what I want to read from azcentral.com. The errors, ignorance and typos don’t bother me as much online - perhaps because I’m not paying cold hard cash for dumbed down information; it’s easier online to find a second source to fact check dubious information; and it’s not as real a reminder of the all the friends and colleagues who’ve lost their jobs.

Thank god I sold all of my stock in that worthless 401(k) when I did — back when it was trading around $55.

The stories are incomplete and leave many holes wide open and questions unanswered.

They don’t treat people well, so it’s no surprise that people are leaving in droves. I feel for those who are still there. I worry for those who are just starting there. There’s no mentorship and attention to the craft. Now, it’s just bleh and people fear for their jobs like crazy.

I agree. It’s always disappointing to read the only well-written article in the paper, and then notice it’s AP.

Whatever happened with that buyout they had offered a bunch of veteran folks a few months ago? I knew it went to quite a few — including some on the photo desk — but I never heard if anybody took the deal. Supposedly, if they didn’t get enough takers on the buy-out they were going to start layoffs.

Man. I can’t belive I’m making more money in Az real estate these days compared to what my Gannett stock would now be doing.

Gannett was sliding down long before these hard economic times hit. Let’s just face the truth here…

Glad you said it Len.
They have laid off so many veteran reporters, and others have left for greener pastures, that the quality of journalism left behind is mediocre at best.

Today the Republic has interns covering major stories.

Because of the skeleton crew the coverage is incomplete. An in-depth story is rare. (check some Walter Cronkite quotes on this)

So why don’t the local TV stations take advantage of this? They’re still reading from the Republic as they did in 1952.

You might want to add the Denver Post had the story about the Phoenix telemarketing firm fined for violating FCC regulations 36 hours before the Republic published it - and it was a Phoenix company!

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