The late Gannett chairman Al Neuharth, who created USA Today, was no stranger to cost-cutting. But he’d be rolling over in his grave at what’s taking place now. Photo (cc) 2013 by George Kelly.
Gannett, the country’s largest local news chain, is in a tailspin. The publisher of some 200 daily papers reported a significant loss in the second quarter — $54 million on revenues of $749 million.
According to Rick Edmonds, who analyzes the media business for Poynter, the company is either down or missing its targets in digital and print advertising as well as print circulation. The sole bright spot: a steady rise in paid digital circulation. Extensive layoffs are on the way. Edmonds quoted a memo from Maribel Perez Wadsworth, head of the media division, in which she said: “In the coming days, we will … be making necessary but painful reductions to staffing, eliminating some open positions and roles that will impact valued colleagues.” It’s hard to see how shrinking an already diminished product is going to help.
Those of us who live in Eastern Massachusetts and environs might wonder where they are going to find any staff members to lay off. Over the past year, the chain has closed many of its community weeklies. Its dailies are still publishing, but with skeleton newsrooms.
The question with Gannett is how many of its problems are simply part of the overall local news crisis and how many are of its own making. Tim Franklin, senior associate dean and the John M. Mutz Chair in Local News at Northwestern’s Medill School, tweeted:
The existential question from this very sobering Gannett earnings report: Is this a bellwether for the entire local news industry, or is it a company issue? The next earnings report from Lee may answer that question. https://t.co/vs4fLRXBHw
— Tim Franklin (@TimAFranklin) August 4, 2022
As it turned out, Lee did reasonably well, which Chris Krewson, executive director of Local Independent Online News (LION) Publishers noted in a response to Franklin.
I would argue that though the challenges facing community journalism are very real, there are some unique factors at work with the current iteration of Gannett, which lost its way in the cradle back when GateHouse Media was born. GateHouse and Gannett merged a few years ago, but it was essentially a takeover by GateHouse, which has been pillaging its local titles for the past 15 or so years. Gannett’s schemes to overcome the mess in which it finds itself strike me as harebrained. Its plan to pursue sports betting isn’t going well, as Edmonds reports. Then there is its dream of getting into nonfungible tokens (NFTs). Seriously?
Gannett’s flagship is USA Today, which is still a solid paper. If I had to guess, I’d say they’ll leave it pretty much alone so that they can use it as a wire service to fill up their regional and local papers. I mean, even more than they’re already doing.
Sadly, Gannett’s journalists have been on a roll, with reporters at the Indianapolis Star and The Columbus Dispatch breaking the story about a pregnant 10-year-old rape victim — and then confirming it when it was questioned by right-wing propagandists and by Washington Post fact-checker Glenn Kessler. The Austin American-Statesman obtained and published video of the police (non)response to the school shootings in Uvalde, Texas, after editing out the children’s screams. This is outstanding journalism, and soon Gannett will have fewer journalists.
Gannett’s greed and incompetence are going to mean fewer jobs for reporters and less coverage for local communities. It’s an ongoing tragedy, but it does open up possibilities for entrepreneurs who are looking to start new projects.
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Mark Laurence
One of the most frustrating things about reading Gannett papers is the early deadline. If something happens after 5 PM, it’s too late for that expensive morning paper you’re still holding onto. Sox scores, election results, City Council meetings, fires and crimes, you might see them on the Tuesday news at 11 but you won’t read it in your paper until Thursday, or even later. Most unforgivably, Gannett usually won’t update the newspaper website for an evening event. Yes, they add a supplement to their electronic editions with later news, but it’s all AP wire copy and none of it is local. I’m sure this is why many subscribers have asked themselves, “why am I paying for this?”
theutts
The local Gannett paper here on the Cape has become pointless to read for actual news. We cancelled our subscription after nearly 40 years. In the meantime, the Provincetown Independent has stepped in, and does an excellent job of covering local news. So there does seem to be hope for local, independent journalism.
Dan Kennedy
The Provincetown Independent is a great local news startup. You may enjoy listening to our podcast with Ed Miller, the co-founder and editor.
Joyce McMahon
They can’t make money because their advertising payment and collections systems are a mess. After trying for weeks to pay (yes I wrote pay) an advertising invoice for a client that Gannett’s staff had mistakenly assigned to another similarly named company, I wrote to the CEO and CFO asking for help. The CFO wrote back and gave me the name of a person who resolved the issue. They outsource their collections overseas to maybe a staff of one who has no access or idea for how to resolve problems and there were no other options on their website for resolving the issue so I went to the top. It was a ridiculous waste of time trying to put this to rest both for me and the other business who was in collections for a bill they didn’t owe! And from what I understand from others is that this an ongoing problem. It’s a shame if this is part of what is affecting their inability to staff their newsrooms.
John Smith
I work for a Gannett subsidiary. We’re relatively insulated, since we’re one of the rare solidly in-the-black segments of their business. Even so, it’s really…fun…to watch the CEO collect over 7mil in compensation, and the company to announce 100mil in stock buybacks, while telling all of us that we have to tighten our belts.
Jym Wilson
Your last paragraph is your lead.
Stephen R Nelson
Dan, one way to lay people off is to close the newspaper(s) completely. Of course that is terrible for the staff but it may be coming. I’ve been laid off myself (not from media).