In the troubled U.S. newspaper landscape, Gannett became the latest to announce a drastic plan in an effort to cut cost. The nation's largest newspaper chain and parent of USA Today, Detroit Free Press and Arizona Republic announced that employees will be forced to take unpaid one-week furloughs in the first quarter of 2009.

Gannett CEO Craig Dubow said in his memo, distributed to all Gannett newspaper employees by email, that he and all executives will be taking the unpaid leaves as well:

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.

After much consideration, we decided a furlough program would be the fairest and least intrusive way to meet these fiscal challenges in the first quarter, which is traditionally the lightest time of the year. We sincerely hope this minimizes the need for any layoffs going forward.

Gannett isn't immune to the economic woes that are besieging all newspapers in the U.S. It has seen its stocks sank from $37.50 in January 2008 to about $7.50.

One Gannett paper that is exempt from the furlough plan is the Detroit Free Press, which announced in December that it's ceasing deliveries four days a week in a new program designed to cut printing and delivery costs. The Watchdog has obtained the memo that was just sent to Free Press employees:

Most of you have probably seen or are aware of the announcement today from Craig Dubow that Gannett is implementing a furlough program whereby employees will be required to take unpaid leave for one week during the first quarter.

Because of the intense attention and focus required to implement our strategic plan and meet our March 30 deadline, Detroit will not be included in the furlough program at this time. We very much appreciate Gannett's support as we move forward with our transformation model.

David L. Hunke
Publisher, Detroit Free Press
CEO, Detroit Media Partnership

Posted by Samuel Chi at 01:33 PM | Permalink

Without question, 2008 was a terrible year for stocks. The Dow was down by 35% and the S&P 500 was off by about 40%. Yet, when it comes to getting hammered in the stock market, there's no business like the newspaper business.

A number of newspaper publishers have seen their stock value decline by 90% or more in 2008, having been or are on the verge of being delisted by the NYSE. Gatehouse Media, Journal Register and Sun-Times Media Group all have become penny stocks and been kicked off the big board.

The stocks for Gatehouse, which publishes nearly 100 mostly small-town dailies, are down 99.5%. Journal Register, parent company of 22 mostly suburban dailies, had a similar meltdown. Sun-Times, owner of the eponymous Chicago paper, is trading at about 5 cents a share.

Bigger chains are not faring much better. Lee Enterprises, with St. Louis Post-Dispatch its flagship, is trading at 40 cents a share. Media General, publisher of the Tampa Tribune, is at around $2.50. Gannett, the nation's largest newspaper publisher and parent of USA Today and Detroit Free Press, is at $8.50, down from around $37 in January 2008.

The New York Times Co., despite all the bad news and bad press, actually has held up better than most. The NYT is trading at about $7.60, down from the 2008 high of $21. The NYT plans to mortgage its Manhattan building and is actively trying to sell its 17.5% stake in the New England Sports Ventures.

According to a source, the NYT is asking around $350 million for its share in the Boston Red Sox, Fenway Park and NESN television network - though the actual worth of the stake is probably closer to $150-200 million. The company turned down an opportunity to unload the Boston Globe two years ago when it was valued at around $550-600 million. Today, the Globe is worth about $20 million.

The NYT has to sell something - anything - quickly. It is reportedly $1 billion in debt, with a $400 million credit line due to expire in May 2009. It might also want to think about selling about.com, which has been valued at around $600 million.

Posted by Samuel Chi at 08:00 PM | Permalink