Gannett (GCI) is the largest newspaper chain in the US and its prized property, USA Today, is the largest paper by total circulation. It is a bad sign then that such a large company has asked 9% of the editorial staff at its national paper to leave. According to The New York Post, the move is being made "because of declining revenue at Gannett Co.’s flagship publication".
Gannett has a large online audience for its paper’s so the move is an indication that revenue from the internet is not keeping up with falling print sales.
The move probably signals that more cuts are coming across the industry. Gannett trades below $40, near its 52-week low and down from the high of $63.50. The New York Times (NYT) shares are below $19, also near their low for the last year. The stocks of Journal Register (JRC) and McClatchy (MNI) two other chains, are down over 60% over the last year.
There is little left for the newspaper industry other than to cut people. Paper and delivery costs have already been taken down. The costs of printing and production cannot be brought lower. That leaves headcount. And, large newspapers can’t operate with just a few dozen people.
Douglas A. McIntyre
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