Gannett profits by slashing. The first quarterly results from a major US media company has produced a surprise profit, which grabbed the headlines and chatter from analysts eager to make their mark by being bullish. Investors loved the black ink and pushed Gannett shares up more than 22% in trading, but the horrible reality is that nothing has changed from the first half. Ad revenues are still weak in the US and UK, where the company operates and the profit was driven by cost cuts. As we know you can’t cost cut your way to growth and growth was absent in the quarterly report.
The profit was wrung from cost cuts, including another 1400 jobs being cut. Revenue fell 18% in the quarter, compared with the same quarter of 2008. that was after a 17.6% fall in first quarter revenues. Revenue was lower thanks to continuing weakness in the US and UK newspaper industries; Gannett operates a major regional newspaper business in the UK.
Gannett owns USA Today, the largest selling American paper. It’s the first US newspaper group to report second quarter figures. Next week New York Times Co, Media General Inc and McClatchy Co will release their figures. All are expected to be similar.
Gannett’s second-quarter revenue fell to $US1.4 billion on a 25.% on total revenues (26.9% in the first quarter. Publishing revenues were down 32% in the latest quarter, slightly better than the 34.1% drop in the first quarter. In the US the fall was 27.2% (28.2% in the first quarter) and in the UK, the fall was a still sharp 36.9% from the 38.7% drop in the first quarter of this year.
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The company made a net profit of $US70.5 million, compared with a loss of $US2.29 billion, in the second quarter of 2008 when Gannett took write-downs and other charges. Classified ad revenue, traditionally the lifeblood of newspapers, fell nearly 45% in the second quarter, with job classifieds falling 62%. That’s a bit better than the falls in the first quarter, but not much.
Circulation revenues rose slightly in the US because of a price increase for USA Today , but it is clear from this report that the US newspaper industry is still gripped by enormous structural changes that are not easing real soon, no matter how confident Wall Street is. — Glenn Dyer
Leader: fresh new look, nineties advertising. News Ltd’s Leader newspaper group has put out a new advertisement to celebrate a revamped fresh look. But staff say the spots bought on Channel Seven are “cheap” and they’ve only been seen at five am. That’s a pity because the nineties video hits white back drop style with an aerial view of the cast spelling out “Leader” is an unmissable blast from the past:
Memo: Arthur Sulzberger explains $US1 billion in New York Times debt to staff. Arthur Sulzberger and New York Times CEO Janet Robinson have issued a second statement to the newsroom. This one is about the company’s debt! “The Company carries approximately $1 billion in debt but of that amount only about $45 million matures before 2011, and we expect to repay that in November with cash flow from operations and our revolving credit agreement. The majority of our debt isn’t due until more than five years from now –– in 2015.” — The Awl
Petition to free journalist held in Iran. More than 100 prominent journalists from 47 countries have sent a petition to the Iranian government today calling for the release of Maziar Bahari, the Tehran correspondent for Newsweek, who has been held without charge in an Iranian jail since 21 June. Among the signatories are Christiane Amanpour, Mariane Pearl, Fintan O’Toole, Lydia Cacho, Wilf Mbanga, Ted Koppel and Tom Friedman. The petition urges the justice minister to intervene in Bahari’s case and see that he is released immediately. — Greenslade @ The Guardian
BBC resists a move to give part of its license fee to other broadcasters. The BBC and the Labour government in Britain are disagreeing over a government plan to share some of the broadcaster’s £3.6 billion in public financing with its commercial television rivals. The government proposed last month that 3.5 percent, or about £130 million, be reallocated from the BBC to other broadcasters to help them pay for children’s programming and local news. With advertising revenue shrinking, these companies say, they can no longer afford to broadcast such programming without subsidies. — New York Times
Britain’s newspaper licensing agency to charge PR companies for sharing, reproducing URLs. A plan by Britain’s Newspaper Licensing Agency (NLA) to charge public-relations companies for sharing and reproducing URLs is drawing criticism from the PR industry. The NLA, which was founded in 1996 by eight of Britain’s largest newspaper publishers and represents 1,400 British newspapers, announced in June that beginning in September it would charge PR agencies a fee for sharing links to newspaper Web sites with their clients. The changes would take effect in September. — Editor and Publisher
Up next, Lonely Planet magazine. The launch of Lonely Planet magazine is next on the agenda for BBC Worldwide’s ambitions in Australia. BBC Worldwide and ACP Magazines began their joint venture last year and so far have launched Top Gear Australia and BBC Australian Good Food , which have achieved circulations of 83,530 and 71,250 respectively. Lonely Planet started out in Australia, and is headquartered in Melbourne. Lonely Planet magazine versions have already launched in the UK and Brazil. The BBC has other ambitions for the spreading of the brand and this week launched a Lonely Planet store in Sydney Airport. — B & T
CRC creates campaigning video for The Killers . Sydney agency Colman Rasic Carrasco has created a music video for The Killers’ track “Goodnight, Travel Well” as part of its work with MTV against human trafficking. The project, which involved partnering with UNICEF and USAID, highlights the hidden cost of s-xual exploitation. The four minute video — directed by David Slade — was given a global premiere on MTV this week.
CRC creatives Dejan Rasic and Rebecca Carrasco have been working on the project since the start of the year. Carrasco said: “It is a confronting topic and people can too easily tune-out to awareness messages about the issue.” The video is the second collaboration between CRC and MTV EXIT (End Exploitation and Trafficking). — Mumbrella
Not an upgrade, an upheaval. The hard truth about the future of journalism is that nobody knows for sure what will happen; the current system is so brittle, and the alternatives are so speculative, that there’s no hope for a simple and orderly transition from State A to State B. Chaos is our lot; the best we can do is identify the various forces at work shaping various possible futures. Two of the most important are the changing natures of the public, and of subsidy. — Clay Shirky