Non-Union Workers in Gannett Unit Must Take One-Week Furlough in First Quarter

Gannett Co. told non-union workers of its U.S. Community Publishing Unit today that they will have to take a week off without pay in the first quarter of this year to avoid more layoffs as revenue continues to fall.

The furloughs will affect workers at the 81 community newspapers. They will not apply to Gannett's flagship newspaper, USA Today, or to the Detroit Free Press. There are a total of 17,000 employees working at the community newspapers.

In a memo issued earlier today and posted on Jim Hopkins' Gannett Blog, unit President Robert Dickey said that top line revenues "remain short of where they were a year ago." Dickey continued to say that the current economy made it necessary to implement the furloughs.

"This was, quite frankly, an option I had hoped we could avoid," he said in his memo.

The furloughs must be taken by March 27, and will include Dickey himself, the memo said. Gannett chief executive officer Craig Dubow and chief operating officer Gracia Martore will have their salaries reduced by a percentage equivalent to a week's furlough.

Russell Adams of The Wall Street Journal writes:

Like many other newspaper publishers, Gannett has slashed jobs and made many other cuts, including furloughs, in response to steep declines in advertising revenue over the past couple years. The company had about 35,000 employees at the end of 2009, down from nearly 50,000 three years earlier.

In the third quarter of last year, Gannett posted a 38% increase in profit helped by lower operating expenses. However, its newspaper business continued to drag down results. Publishing ad revenue fell 5.1% from a year earlier, a slight improvement over the 5.7% decline in the second quarter. Publishing ad revenue declined 28% in 2009.

"As we start the new year, we continue to see some improvement in revenue trends and reduced year-over-year revenue declines in U.S. Community Publishing," Mr. Dickey wrote. "This is no small accomplishment and I think you should take great pride in what you have achieved. Our top line revenues, however, while improving, remain short of where they were a year ago. This is compounded by a still challenging and uncertain economy, as well as increasing expenses."

Gannett Blog: Cincinnati Enquirer Publisher Announces Seven Employees Laid Off

A reader of Jim Hopkins' Gannett Blog sent him an email yesterday that Cincinnati Enquirer Publisher Margaret Buchanan appeared in the newsroom about 5 p.m. Wednesday and announced there had been seven people laid off, two of those in the Local Information Center. She blamed a drop-off in retail advertising that she said began in June and has continued unabated. She said she has not heard anything about a first-quarter furlough.

Clarion Ledger in Jackson, Miss., Terminates 15 People

The Clarion Ledger in Jackson, Miss., laid off 15 people yesterday.

WLBT reports that the 15 people include managers, photographers and a sports reporter. The Gannett newspaper laid off 20 people in July.

Advertiser Sold to Star-Bulletin, Making Honolulu a One-Newspaper Town; 300 Laid Off

The sale of The Honolulu Advertiser to Honolulu Star-Bulletin owner David Black was completed by Gannett this morning, leaving at least 300 people out of work and a community less served.

Rick Daysog of the Advertiser writes:

"It's hard to close this chapter and begin a new one," Robert Dickey, president of Gannett U.S. Community Publishing, wrote in an e-mail to Advertiser employees Friday. "But in doing so, I want to sincerely thank you for your dedication to The Honolulu Advertiser and wish you all the best."

Gannett's exodus and the eventual merger of The Advertiser and the Star-Bulletin will leave Honolulu as a one-newspaper town and result in the loss of at least 300 jobs.

For the next estimated 30 to 60 days, The Advertiser will publish as a stand-alone newspaper run by third-party HA Management Inc.

The two dailies will be merged into a single broadsheet newspaper known as The Honolulu Star-Advertiser, which will have a combined daily circulation of 135,000 to 140,000, Dennis Francis, the Star-Bulletin's publisher told Daysog. The Star-Advertiser will employ between 300 and 600 people. The two newspapers currently have 900 employees between them.

"I know there's a lot of angst in the community about losing a newspaper but the community decided long ago that it could not support two newspapers," Francis told Daysog. "That decision was made by readers and advertisers."

Daysog also writes:

Former media executives say the loss of an editorial voice will have a long-lasting impact on the local community.

The layoff of scores of journalists will mean that hundreds of stories will go unwritten each year, they said.

"It's a real tragedy," said Gerry Keir, who worked at The Advertiser for 27 years, rising to editor before leaving in 1995. "I don't think there's any question that the community is the loser."

Honolulu Advertiser Sends Out 600 Layoff Notices

Three days ago the Honolulu Advertiser notified 600 employees that they could lose their jobs when owner Gannett Co. sells the newspaper and related assets to Oahu Publications Inc., owner of the Honolulu Star-Bulletin next month.

The majority owner of the Honolulu Star-Bulletin, David Black, has put his newspaper up for sale. However, he has said if a buyer isn't found, the two newspapers will merge and layoffs will occur. How many Advertiser employees would be rehired with a merger was uncertain.

The sale will be finalized late in April.

To get an ideal at how desperate Gannett is to unload the Advertiser, it is loaning Oahu Publications $40 million to make the deal happen.

Gannett Reports Drop in Third Quarter Earnings

Layoffs, other belt-tightening moves and falling newsprint costs helped Gannett earn $73.8 million, or 31 cents per share, in the third quarter, the publishing giant announced this morning in a press release. That was down from $158.1 million, or 69 cents per share, in 2008's third quarter.


Excluding unusual items, Gannett said it would have earned 44 cents per share. On that basis, analysts expected 41 cents, according to the press release posted on Thomson Reuters. On Sept. 29, Gannett guided analysts to expect 39 cents to 42 cents per share.

"We finished the quarter on a stronger note with better than anticipated results due primarily to better trends in advertising and greater efficiencies across all of our business segments. Our results for the quarter exceeded the high end of previously announced estimate ranges for revenue, operating cash flow, and earnings per share. Although recessions in the U.S. and UK continued to temper ad demand and revenue growth during the quarter, we are encouraged by the revenue trends. Third quarter year-over-year comparisons of publishing advertising revenue were a few percentage points better than year-over-year comparisons for the second quarter and September was our best comparison month of the year. We`ve seen improvements in our Broadcasting segment as well. Excluding Olympic and political ad spending, core revenue comparisons were better in the third quarter than the second quarter. Operating profits in our digital segment, on a pro forma basis, were substantially higher this quarter relative to the third quarter last year," said Craig Dubow, Gannett chairman, president and chief executive officer.

Gannett Lay Off Will Total 1,400

Gannett Co., Inc. will lay off about 1,400 employees next week as the largest U.S. newspaper publisher continues to try to deal with a struggling economy and its impact on the company's advertisers.

In a letter sent to employees Wednesday, Bob Dickey, president of Gannett's U.S. Community Publishing Division, said newspapers across the country are finalizing plans to deal with local economic conditions and the plans would vary by community.

The company currently employs about 41,500 people after laying off about 10 percent of its work force last year.

Gannett owns more than 80 daily newspapers. Most are members of the Community Publishing Division

Is Gannett Considering 4,500 in Layoffs on July 8?

Jim Hopkins on his Gannett Blog is asking Gannett officials if the chain is considering another round of layoffs, this time numbering 4,500 people nationwide.

In a comment, one of Gannett Blog's best sources has told us the following:

1. Principal executive and Chief Financial Officer Gracia Martore has ordered layoffs across the board from U.S. Community Publishing to USA Today, Corporate and the Broadcasting division.
2. On top of layoffs, salary reductions will happen in the broadcast division: a 10% salary reduction.
3. No new furloughs for the rest of the year.
4. Layoffs are scheduled for July 8. Estimated to be 4,500 for U.S. Community Publishing.

My questions:

1. Is any of the above information incorrect?
2. If any of the above is incorrect, please provide, point-by-point, the accurate information.

So far, no reply; nor would I expect that he gets one before July 8.

Gannett Reports U.S. Ad Revenue Drop of 28.2 Percent in First Quarter of 2009

Gannett Co. announced yesterday during a conference call that advertising revenue at its U.S. Community Newspaper division plunged 28.2 percent, including a nearly 40 percent decrease in classified advertising revenue.

Gannett reported that 2009 first quarter earnings per diluted share were $0.34 compared with $0.84 per share in the first quarter of 2008.

The results for the first quarter of 2009 include a $39.8 million pre-tax settlement gain related to one of the company’s union pension plans ($24.7 million after-tax or $0.11 per share) and $6.6 million in pre-tax severance and facility-related consolidation costs ($4.3 million after-tax or $0.02 per share). Results for the first quarter of 2008 included a $25.5 million pre-tax gain on the sale of land ($15.8 million after-tax or $0.07 per share). Excluding these one-time items, the company earned $0.25 per diluted share in 2009’s first quarter compared to $0.77 per diluted share in the first quarter a year ago.

“While revenue in the quarter benefited from growth in our digital segment and significantly higher retransmission fees for our television stations, our results reflect the pressure on advertising demand across all of our business segments due to continuing recessions in the U.S. and the UK. Our results, however, highlight the positive impact of the company’s efforts to operate its businesses as cost efficiently as possible in light of the revenue realities we are facing in this extraordinary time,” said chairman, president and chief executive officer Craig Dubow. “Although business conditions remain very challenging, we continue to transform all facets of the company as we position it for a more favorable economic environment and the opportunities we see in the changing media landscape.”

Total reported operating revenues for the company were $1.4 billion in the first quarter compared to $1.7 billion in the first quarter of 2008. The revenue decline reflects primarily the impact on advertising demand of the ongoing weakness in the economies of both the United States and the United Kingdom. Digital segment revenues increased significantly because of the consolidation of CareerBuilder and ShopLocal for the full quarter in 2009.

Reported operating expenses were $1.2 billion, a 10.2 percent decline from $1.3 billion in the first quarter of 2008, reflecting cost-containment efforts including the impact of personnel reductions in previous periods, furloughs in the current quarter and the pension settlement gain. The effect of these cost-savings initiatives was offset partially by restructuring expense. As well, the full consolidation of CareerBuilder and ShopLocal impacted reported expenses. Excluding one-time items in both years, pro forma operating expenses were 17.7 percent lower for the quarter. Corporate expenses declined 11.4 percent during the quarter compared to the first quarter in 2008.

Reported operating cash flow (defined as operating income plus depreciation and amortization) was $230.1 million for the quarter and net income was $77.4 million.

Average diluted shares outstanding in the first quarter totaled 230,951,000 compared with 229,661,000 in 2008’s first quarter.

Publishing segment operating revenues were $1.1 billion for the quarter, a 26.9 percent decline from the same quarter a year ago. Advertising revenues were $722.8 million or 34.1 percent lower than the first quarter of 2008. Advertising revenues in the U.S. were 28.2 percent lower while at Newsquest, our operations in the UK, ad revenues declined 38.7 percent, in pounds. The retail, national and classified categories for the publishing segment were 23.4 percent, 30.8 percent and 46.5 percent lower, respectively. The exchange rate of the British pound declined over 27 percent year-over-year. Excluding the impact of the exchange rate, total advertising revenues would have been 29.8 percent lower including declines of 20.9 percent in retail, 29.2 percent in national and 40.7 percent in classified. Circulation revenue was 3.1 percent lower in the quarter. Domestic circulation revenue increased 1.0 percent reflecting recent single copy and home delivery price increases in several markets and at USA TODAY.

Lower classified revenues reflect declines of 50.6 percent in real estate, 62.0 percent in employment and 39.2 percent in automotive. On a constant currency basis, real estate, employment, and automotive would have been down 44.3 percent, 57.2 percent and 34.8 percent, respectively. For U.S. Community Publishing, classified revenues were 39.0 percent lower reflecting declines of 36.6 percent in real estate, 60.2 percent in employment and 32.8 percent in automotive. In the United Kingdom, classified revenues were down 45.1 percent, in pounds, comprised of declines of 60.0 percent in real estate, 51.4 percent in employment and 43.2 percent in automotive.

At USA TODAY, advertising revenues were 33.5 percent lower in the first quarter compared to the first quarter in 2008. Paid advertising pages totaled 527 compared with 826 in the same quarter of 2008. The telecommunications, pharmaceutical, and advocacy categories grew but the gains were more than offset by losses in the entertainment, travel and financial categories.

Total publishing operating expenses declined 20.9 percent in the quarter to $954.7 million from $1.21 billion in the first quarter of 2008. The decline was driven by continued cost containment efforts including the impact of personnel reductions in previous periods, furloughs in the current quarter and the pension-settlement gain. These savings were offset, in part, by higher severance and facility-related consolidation costs. Publishing expenses, excluding severance expenses and facility-consolidation costs as well as the pension-settlement gain, were 18.1 percent lower. Newsprint expenses were down 15.6 percent for the quarter reflecting an increase in usage prices of 20.4 percent which was more than offset by a 29.9 percent decline in consumption. Operating cash flow in the first quarter for the publishing segment, which includes USA TODAY and Newsquest, was $179.3 million.

Circulation is reported down across the chain about 10 percent daily and 5 percent Sundays, with USA Today down about 7 percent. Even digital ads took a 20 percent hit.

Gannett Move Eliminates 44 Jobs at Michigan Newspapers

The Observer & Eccentric Newspapers announced today it will cease publication of five Eccentric print and Web editions in suburban Detroit as of Sunday, May 31: The Birmingham, West Bloomfield, Troy and Rochester editions of the Eccentric will end publication in print and on the Web with the Sunday, May 31 edition.

In addition, the Southfield edition and O&E's Mirror Newspaper will become part of a new, multi-community Sunday newspaper, the South Oakland Eccentric, which will serve Royal Oak, Berkley, Clawson, Huntington Woods, Southfield and Pleasant Ridge.

The closure will result in workforce reductions of approximately 44 people in all departments - advertising, editorial, circulation and production.

"These expense reductions are a direct effect of our challenging economy and changing media landscape," said Susan Rosiek, executive editor of the Observer & Eccentric/Mirror/Hometown Newspapers. "These decisions, as difficult as they are to execute and to accept, position the newspaper for the future - a future that includes multiple platforms of news and advertising."

The newspaper company will continue to publish the Observer Newspapers in western Wayne County and Farmington/Farmington Hills and the Hometown Weekly Newspapers in Northville, Novi, Milford and South Lyon. The company also provides news and information on the Web at www.hometownlife.com.

Rosiek met Monday with employees and representatives of employee unions - Graphic Communications Conference/International Brotherhood of Teamsters Local 13N District Council 3 and the Newspaper Guild of Detroit, Local 34022 to inform them of these decisions.

The Birmingham Eccentric has been published since 1878. The Eccentric was founded and named after a local men's club - The Eccentric Club. The first edition of the Birmingham Eccentric in 1878 sold for two cents a copy. The award-winning Birmingham Eccentric has had six owners in its 131 year history. The newspaper has been known for its local news and prep sports coverage. Local names and faces in award-winning photo pages were a staple of the newspaper.

The Eccentric "brand" expanded in the late 1960s when a Troy Eccentric was launched in 1968 followed by the West Bloomfield Eccentric and Southfield Eccentric in 1970. A Rochester Eccentric was started in 1972. The Eccentric Newspapers merged with the Observer Newspapers and the two companies began combined publishing operations in March 1974.

The O&E purchased the Mirror from Oak Communications Inc. in 1998. The Mirror will become part of the new South Oakland Eccentric published on Sunday. The new product will offer local and national advertisers a greater reach with consumers in highly desirable south Oakland County communities.

The O&E and Hometown Weeklies are owned by Gannett Co. Inc.

Tucson Citizen on Life Support Until Friday

Tucson Newspapers Inc. has informed employees at the Tucson (Ariz.) Citizen that the sale or closure of the Arizona newspaper won't occur before next Friday.

The Associated Press reports that staffers received a letter Friday notifying them that an announced closure was postponed to allow time for discussions regarding a potential sale.

Gannett had confirmed on Tuesday that it was delaying its original March 21 closure date because of ongoing negotiations with two potential buyers. Gannett and Lee Enterprises Inc., which owns the morning Arizona Daily Star, co-own Tucson Newspapers Inc. under a joint operating agreement. Tucson Newspapers Inc. handles all non-editorial operations for both papers. The papers share costs and profits.

On the right of this web page, the 60 employees of the Citizen are still on the newspaper layoffs list and will remain their until a definitive announcement is made about the paper's future.

Gannett's Tucson Citizen to Close Unless Bought by March 21

Another newspaper is on the chopping block. Gannett's Tucson Citizen needs a buyer by March 21 or it will close.

Robert J. Dickey, president of Gannett U.S. Community Publishing, told employees on Friday:

"The Tucson Citizen has been part of Gannett since 1976, and we deeply regret having to take this step," Dickey said. "But dramatic changes in our industry combined with the difficult economy - particularly in this region - mean it is no longer viable for our partnership with Lee Enterprises Incorporated to produce two daily newspapers in Tucson."

The Citizen is one of America's last afternoon newspapers and has a circulation of about 17,000. There are 65 full-time and three part-time employees at the paper.

Gannett Furlough Has Employees Worried

Gannett employees and management are scratching their heads as they try to figure out how they are going to manage an order to put its non-unionized employees in the United States on a week of unpaid leave sometime this quarter and still their publications out.

"We are doing this to preserve our operations and continue to deliver for our customers while confronting the issues raised by some of the most difficult economic conditions we have ever experienced," chief executive and Chairman Craig Dubow said in an email to employees, according to Kelly Nolan of The Wall Street Journal.

Nolan reported that the number of employees affected by the furlough was unknown, but Dubow said in the email that most U.S. employees, including him, would take five days unpaid leave sometime in the first quarter. Overall, Gannett has more than 31,000 employees, the report said. Workers in unions also will be asked to participate in the furlough, Gannett said.

Joe Strupp of Editor & Publisher wrote today about how people inside the company, which owns USA TODAY, is going to make this work:

Coming off a recent salary freeze and a 10% workforce cut in late 2008, finding out each employee will lose a week of pay this year -- and be unavailable for work -- is another hit to take.

"People are concerned, but it is certainly better than layoffs," said John Kridelbaugh, vice president of market development and digital at The Indianapolis Star. "We are working through the details and all of the business needs so we can continue to still put out a newspaper and a 24-hour Web site."

Susan Patterson Plank, vice president of marketing for the Des Moines Register, said between her paper, the nearby sister Iowa City Press-Citizen and local Gannett television outlets, some 800 employees are impacted. "Our managers are working through it," she said, offering few details. "It will certainly be a challenge. But it gives us the chance not to have layoffs. For most people that is a good thing."

Laura Rehrmann, Gannett Washington bureau chief, said logistics will be difficult for her staff of four editors and 19 reporters. She has already informed them of a sign-up sheet, but also a tongue-in-cheek directive that no one can take next week off.

"I am resigned that this is what the company needs to do in this economic climate," she said. "We will do it in an orderly fashion so that it will not affect journalism."

She added that "the week of Feb. 15, congress is on a break, so that might be a good time for some of our staff to be out."