Wednesday, February 18, 2009

Gannett's Slow Death By a Thousand Cuts

Gannett, like all other newspaper companies, is being withered by the tsunami of falling circulation, fewer advertisers and inexorable reader migrations to the web.
However, unlike some other publishers in trouble, Gannett has taken a perverse pride in putting out papers that were mostly a lot less than what they could have been. However, because the company was reaping healthy, double-digit profit margins from many of its properties, investing in the news product was barely an afterthought.
Now that the profits are rapidly draining, suffer the product even more. Nearly 10 percent of Gannett's newspaper workforce was pink-slipped earlier this year. Those left were forced to take a one-week unpaid furlough, a sorry episode that could very well be repeated.
Rather than outright close a paper, Gannett is instead turning some of theirs into zombies. Posters on Gannett Blog told of big cuts at the Elmira Star-Gazette and Ithaca Journal that essentially eliminated their graphics departments and copy desks. Those functions will now be handled by the Gannett paper in Binghamton.
Elmira and Ithaca will now function essentially as bureaus, with a few reporters and maybe a stray editor or two to watch over them. Last one out, please dim the lights.
Of course, this is has become S.O.P. at Gannett. It already prints the Daily Record in Parsippany, N.J. and the Poughkeepsie Journal at The Journal-News, which is 60 miles away from the other papers. It's not exactly the best commute when the weather's bad and customers are left wondering where their papers is. Now they know.
Given that Gannett's stock price has now gone south of $4 and the company's total market cap has slipped under $1 billion, there will be more panicking by publishers. If you thought your local Gannett paper was thin and provided almost nothing of value, just wait.

No comments: