The end of print, or a distaste for “biased reporting?”
Nov. 23, 2022 By Breeauna Sagdal
Gannett, the nation's largest newspaper chain, recently announced mandatory furloughs which will require employees to take one week of unpaid leave this December. The company, which owns The Argus Leader, The Watertown Public Opinion, and The Aberdeen American News, is also seeking volunteers for buyouts according to a staff-wide email sent by CEO Mike Reed
In addition, the company also has paused overall hiring and will temporarily suspend matching contributions to employee 401(k) accounts starting Oct. 24. The email came two months after Gannett laid off 400 employees and eliminated 400 open positions in response to year-over-year losses, and a troubling second quarter. Gannett reported a loss of $54 million dollars during the second quarter, and its shares have plummeted down by 77% over the last year.
In the company-wide email sent to the over 200 publications owned by Gannett, Reed said “these are truly challenging times. The company continues to face headwinds and uncertainty from the deteriorating macroeconomic environment which has led the executive team to take further immediate action.”
The company-wide furlough is now impacting the "young and out of the area" journalists at The Argus Leader. A GoFundMe page has been created to help Argus Leader staff ahead of the holidays.
The Argus Leader has had significant losses this year within their own newsroom. Top investigative journalist Jonathan Ellis, and capitol correspondent Joe Sneve, have both left The Argus this year to launch their own publication, The Dakota Scout
. The Argus also lost top news Director Cory Myers in early October of this year, along with Mackenzie Huber. Huber has joined colleague Seth Tupper to launch the SD chapter of Searchlight, which functions as an independent state newsroom.
In addition to losing some of their top local staff, Gannett will say goodbye to President Maribel Perez Wadsworth at the end of this year. Wadsworth was the first woman of color to serve as the publisher of USA Today, prior to being named the President of Gannett. Her announcement came on the heels of the Gannett Co. Board of Directors eliminating the role of former CEO, Paul Bascobert, to streamline its operating structure.
Since then, Michael Reed, chairman and chief executive officer of the overall public entity, Gannett Co., has assumed the responsibilities of both Wadsworth and Bascobert. According to a timeline of events, these decisions came rapidly after a negative second quarter, and revelations related to subscription losses.
A D V E R T I S E M E N T
A D V E R T I S E M E N T
According to a transcript obtained by the Washington Post
, Gannett's editorial staff met in April to scale-back opinion and election coverage. “Readers don’t want us to tell them what to think,” the editors, who come from Gannett newsrooms across the country, declared during the internal presentation. “They don’t believe we have the expertise to tell anyone what to think on most issues. They perceive us as having a biased agenda.”
"Not only are editorials and opinion columns 'among our least read content,' the committee said, but they are 'frequently cited' by readers as a reason for canceling their subscriptions.'"
Going into the third quarter amid steep losses, one of the biggest questions has been; How much improvement could the company achieve in a short time-frame? The answer came early this month with an identical third quarter loss of $54 million and a 10% year-to-year revenue decline. CEO Mike Reed told analysts, as he had in August, that he does not expect revenue to head back up until sometime in 2024.
It's not all bad news for Gannet however. The company hit a milestone in paid digital subscriptions which could signal where things are headed for the media giant and its over 200 print dailies. By the end of the third quarter Gannett hit 1.98 million digital subscribers, and passed the 2 million mark since then. On Sept. 30, Gannett had an increase of 28.5% in digital subscribers compared to the same period a year ago.
According to Reed, cost controls have taken root as the U.S headcount fell by 6.5% during the quarter with 468 employees leaving the company and another 400 open positions left unfilled. In addition, with the imposed mandatory unpaid leaves and suspended 401(k) contributions Reed said "the full impact on costs will be greater this quarter and through 2023." The company is also on track to sell $60 to $70 million in real estate and other assets this year to help pay down the debt they took on when the company acquired GateHouse in 2019.
Due to the cost-cutting measures, the on-going transition to digital and a focus on digital marketing services, the company is slowly seeing a turn around. At this point the question appears to be; How quickly can Gannett fully transition digitally? With print subscription revenues off by $51 million and print advertising in a $31 million year-to-year decline, the $9 million in digital gains may not be enough to keep print alive.
|Post Date: 2022-11-23 11:09:21||Last Update: 2022-11-23 16:33:10|