QUOTE AND NEWS
Motley Fool  Aug 23  Comment 
Sports Illustrated and USA Today are entering the daily fantasy-sports space. How will they make money? And what does this mean for the industry?
newratings.com  Aug 15  Comment 
WASHINGTON (dpa-AFX) - Billionaire investor Carl Icahn has bought a 6.63% stake in media company Gannett Co. Inc. (GCI), saying the shares were undervalued and that value could be created by splitting Gannett into separate print and broadcast...
Wall Street Journal  Aug 14  Comment 
Less than 10 days after Gannett Co. said it would separate its publishing business from its broadcasting operations, activist investor Carl Icahn disclosed he had accumulated a 6.63% stake in the company and had planned to push for such a split.
Market Intelligence Center  Aug 12  Comment 
After closing Monday at $33.97, Gannett Co Inc. (GCI) presents an attractive opportunity to get a 4.53% return in just 158 days, which is an annualized return of 10.46% (for comparison purposes only). To enter this trade, sell one Jan. '15 $33.00...
Benzinga  Aug 11  Comment 
Gannett’s (NYSE: GCI) announcement last Tuesday that it planned to spin off its print business, including USA Today, into a separate company was only the latest of several recent media spinoffs. Here's a look at how the deal stacks up...
New York Times  Aug 11  Comment 
The website Sports on Earth lost most of its staff last week after Gannett announced a spinoff of its print companies.
Benzinga  Aug 8  Comment 
Below are the publishing-newspapers stocks on the NYSE and the NASDAQ in terms of revenue. The trailing-twelve-month revenue at Gannett Co (NYSE: GCI) is $5.48 billion. Gannett's profit margin for the same period is 7.99%. The...
The Hindu Business Line  Aug 6  Comment 
The game of survival is on for newspapers, as USA Today owner Gannett has become the most recent major media entity to say it will divide its print and broadcast divisions into separate com...
Benzinga  Aug 5  Comment 
Investors are coming to grips with a series of restructuring announcements from media company Gannett (NYSE: GCI), as they try to value the stock. Analyst Commentary Noble Financial is the first sell side research house to comment on the...
Wall Street Journal  Aug 5  Comment 
Gannett will separate its publishing business from its broadcasting and digital operations.




 

Gannett (NYSE:GCI) is a media company that publishes USA Today, the nation's largest newspaper by circulation, along with 85 other daily newspapers in the U.S.[1] Additionally, GCI publishes 17 daily newspapers internationally as well as more than 200 weekly newspapers in the United Kingdom, which together account for 84% of GCI's revenue.[2] Apart from publishing, Gannett also earns revenue through its digital and broadcasting segments.[1]

Gannett's circulation numbers and attendant advertising revenues have been declining - a trend shared by many of the company's competitors, who are losing advertising dollars to the internet and other media. This spells doom for Gannett's publications as 73% of GCI's publishing revenues are earned through advertising sales.[3] In an effort to offset these struggles with the print paper, Gannett is turning its focus to emphasizing other mediums (such as online and mobile) while de-emphasizing the print paper.[4]

In an attempt to capitalize on internet advertising revenue, Gannett has built websites for its publications, and has acquired, built, or partnered with a number of websites like its CareerBuilder.com. The company's online advertising revenues increased by 72% in 2008 as the company continues to expand its online presence.[5] However, the company's declines in traditional print and broadcasting advertising revenue contributed to GCI's 9% decrease in overall revenue during 2008.[2]

Company Overview

Gannett is a media conglomerate that operates three businesses: publishing, digital, and broadcasting.[6] GCI's publishing division, which includes its primary USA Today newspaper, is the company's largest segment in terms of revenue.[2]

Publishing (84.4% of Revenue)

Gannett is the largest newspaper publisher in the U.S. by circulation.[1] GCI publishes 85 daily newspapers including its flaghship USA Today and about 850 non-daily publications as well as affiliated websites.[1] GCI also owns publication operations in the United Kingdom, with 17 daily newspapers and more than 200 weekly publications.[1] The company's U.S. publications reach about 14 million readers every weekday and 12.6 million readers every Sunday, with the USA Today reaching about 2.25 million readers daily.[7][8]

The publishing segment depends greatly on advertising revenues to run its businesses.[3] GCI's publications also earn revenue through circuIation fees and commercial printing.[3]

Digital (4.2% of Revenue)

The digital segment, created in 2008, includes its online businesses like CareerBuilder.com and ShopLocal.[9] CareerBuilder.com is primarily based in North America- the website is the largest online recruitment and career advancement source for employees, recruiters, and job seekers.[10]

Broadcasting (11.4% of Revenue)

GCI's broadcasting segment includes 23 television stations and affiliated websites in markets with a total of 20.8 million households reaching 18% of the U.S. population.[10] Like its other segments, GCI's broadcasting business earns revenue primarily through advertising sales.[10]

Trends and Forces

Slumping Advertising Expenditures Leads to Lower Revenues

Gannet generates most of its revenue from advertising, which includes both print and online channels. Like most newspaper companies, Gannett has suffered declines in print advertising revenue due in large part to the increasing popularity of the Internet and online advertising. Gannett has responded to the challenges of the print industry by increasing its own online presence, but is still failing to stem its decreases in advertising sales in its publishing and broadcasting businesses.

Several areas of print advertising have been particularly affected by economic conditions and the shift towards the Internet. GCI's publications rely primarily on automotive, retail, and classified advertising to earn revenue.

Gannett has worked to increase its online competitiveness and created the Gannett Digital group in 2006 to focus on these efforts. Its online initiatives have focused around developing Web sites for its existing newspapers and television networks. In theory, the company will be able to leverage its existing user base while gaining a better understanding of its audience through registration and measuring behavior online.


Declining Circulation Compounds Revenue Woes

Though the age of the Internet has diminished the importance of the circulation of print newspapers, it nevertheless remains an essential factor to newspapers’ profitability. This includes both newspapers sold on newsstands as well as subscriptions. USA Today is the paid newspaper with the largest circulation in the country and Gannett has the highest total circulation numbers of any newspaper company, averaging about 6.6 million in daily paid circulation.[1]

Similar to the decline in advertising, Gannett has suffered from ongoing decreases in circulation as readers transition to the Internet for their news.

Vulnerable to Newsprint Prices

Newsprint prices are a significant cost for any newspaper, and consolidation among suppliers has increased prices for newsprint.[11] Gannett has been more aggressive than its competitors to minimize these costs, however. In the past, the company reduced the width of all but one of it presses and newspapers.[12]

Competition

Gannett's competition is twofold: other newspapers chains, and increasingly, Internet websites. Gannett's national print competitors include New York Times Company (NYT)-publisher of the iconic namesake newspaper--and News Corporation (NWS)-publisher of the Wall Street Journal. It also competes with countless local newspapers such as the The Washington Post, and Hearst-Argyle Television (HTV)'s San Francisco Chronicle.




References

  1. 1.0 1.1 1.2 1.3 1.4 1.5
  2. 2.0 2.1 2.2 GCI 2008 10-K, pg. 67
  3. 3.0 3.1 3.2 GCI 2008 10-K, Item 7, pg. 30
  4. Wikinvest: Gannett Revamps USA Today for Web
  5. GCI 2008 10-K, Item 1, pg. 10
  6. GCI 2008 10-K, Item 1, pg. 4
  7. GCI 2008 10-K, Item 1, pg. 5
  8. GCI 2008 10-K, Item 7, pg. 31
  9. GCI 2008 10-K, Item 7, pg. 32
  10. 10.0 10.1 10.2 GCI 2008 10-K, Item 7, pg. 33
  11. Gannett 2007 10-K page 8
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki