QUOTE AND NEWS
Forbes  Sep 26  Comment 
There's an old saying on Wall Street about insider buying: there are many possible reasons to sell a stock, but only one reason to buy. Back on July 1, Gannett Co Inc's Director, Lidia Fonseca, invested $31,380.00 into 1,000 shares of GCI, for a...
BusinessWeek  Sep 22  Comment 
Gannett, publisher of USA Today and dozens of regional publications, has released its debut report made specifically for the Oculus VR headset
Market Intelligence Center  Sep 18  Comment 
After closing Wednesday at $32.29, Gannett Co Inc. (GCI) presents an attractive opportunity to get a 5.12% return in just 121 days, which is an annualized return of 15.46% (for comparison purposes only). To enter this trade, sell one Jan. '15...
TheStreet.com  Sep 11  Comment 
NEW YORK (The Deal) -- Advance Publications' M&A march continues with its auction of Parade Publications, whose Sunday news magazine has been a staple in papers around the country since 1941. The auction, which was first reported by the New...
New York Times  Sep 9  Comment 
News headlines briefly flashed that Carl C. Icahn had raised his stake in Gannett, the media company, to nearly 9 percent. But as it turns out, his firm simply made a typo in a regulatory filing.
Market Intelligence Center  Sep 9  Comment 
Gannett Co Inc. (GCI) presents a trading opportunity that offers a 4.86% return in just 130 days. A covered call on Gannett at the $33.00 level expiring on Jan. '15 offers an assigned return rate of 4.86% or 13.65% annualized. This trade offers...
Wall Street Journal  Sep 3  Comment 
Newspaper chain Gannett laid off about 70 employees at its flagship publication USA Today, including about 10% of its newsroom staff, a person familiar with the decision said.
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.




 

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
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