A major leadership shakeup at Gannett, along with drastic cost-cutting and strategy shifts, underscore just how much pressure the country's largest newspaper company is facing as it tries to appease stockholders and remain independent.
Why it matters: The debt accrued from its merger with GateHouse has forced Gannett to dramatically cut costs and bring its employee count nearly back to what it was prior to the 2019 deal.
By the numbers: As of Dec. 31, Gannett had 11,200 employees, according to a regulatory filing. That's down from 21,255 employees following the 2019 merger with GateHouse and just 562 more than the 10,638 employees Gannett had as a standalone company.
- Gannett also has pushed to reduce its number of markets. It dropped its number of local-focused websites by 117, and it decreased its number of weekly newspapers by 127, according to regulatory filings.
- Gannett's total operating revenue in 2022 was $2.9 billion, an 8% decline from the year prior.
Driving the news: Gannett has restructured its leadership team to focus on a more streamlined digital approach.
- On Monday, it announced Kristin Roberts, formerly of McClatchy, would be joining as its chief content officer "to drive Gannett's digital transformation and content strategy."
- The news comes days after two top editors — Jeff Taylor, executive editor for news at USA Today, and Amalie Nash, senior vice president, local news and audience development at the USA Today Network — quietly announced their departures, according to two sources familiar with the changes.
Be smart: Gannett's big digital push of moving away from a reliance on print revenue and toward growing digital ads and subscriptions comes amid difficult market conditions.
- Its digital ad revenue dropped 20.5% in the fourth quarter compared to the year prior, the company reported last month. CFO Douglas Horne attributed the decline to a "softer market" on the company’s earnings call.
- Gannett's total revenue for the fourth quarter decreased 11.6% year over year, the company reported.
Between the lines: Gannett introduced a new paywall strategy for USA Today in July 2021, making some content and a weekly newsletter exclusive to subscribers. Until that point, its flagship news brand was one of the last remaining major national newspapers without a paywall.
- But the shift has been difficult, leading to strategy changes. Beginning late last year, executives began pulling back on the number of articles being placed behind the paywall in order to boost the company's ad revenue, sources told Axios.
- Roughly one-third fewer articles are being placed behind the paywall on USA Today compared to the initial launch strategy, these sources said.
- On last month's earnings call, CEO Mike Reed said Gannett had refined its subscription strategy "to be more balanced" and focus less on subscriber volume growth in favor of revenue and profit.
What to watch: Broadly speaking, Gannett's strategy has been to shed assets and focus on fewer markets. Reed said on last month's earnings call that the company "would entertain bids on any of our markets."
- A year ago, Gannett announced its goal of reaching six million digital-only subscribers by 2025. It's about a third of the way there.
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