G. Crescoli, Unsplash
Gannett Co. shared its Q3 earnings Thursday and the report contains some good news for The Commercial Appeal‘s parent company. Digital revenue is up by $3.3 million over last year. Unfortunately, digital gains couldn’t keep pace with the $5.5 million in revenue lost from declining circulation. Publishing revenue is down $43.9 million with advertising and marketing taking a $26.5 million hit.
MarketWatch had a more detailed look at the numbers.
Revenue was $711.7 million, missing the FactSet consensus of $724 million and down from $744.3 million a year ago. Publishing revenue fell to $616.4 million, down from $660.3 million in the year-earlier quarter. Advertising and marketing revenue fell to $403.4 million, down from $429.9 a year ago. Print advertising revenue fell 16.7% to $204 million from $244.8 million a year ago, but digital advertising and marketing revenue rose 3.2% to $105.8 million from $102.5 million a year ago. Revenue from circulation fell to $258.9 million, also down from $264.4 million a year ago.
The disappointing economic news arrives shortly after Gannett’s latest letdown to loyal print subscribers. Deadlines weren’t extended to allow even allow for even rudimentary coverage of the midterm elections. The news shouldn’t have been surprising given the way out-of-state editing impedes timely sports coverage. It’s also what you’d expect from a company now self-identifying as “an online news organization that continues to publish a daily, morning newspaper.”
Industry analyst Ken Doctor’s response to the election news practically anticipates Gannett’s Q3 report. Writing for NiemanLabs, Doctor wrote, “that road to a mostly/fully digital future gets narrower month by month.”
“Digital subscriptions — which sell at much lower prices than print ones, though with lower marginal costs — are gaining ground much too slowly. Given the combination of higher prices, a lesser product, and even increasingly erratic home delivery, print subscribers may provide less of a lifeline to the digital future than Gannett and other publishers now assume in their whiteboard calculations.”
There’s some evidence Gannett may be looking to cut employee costs again. A recent memo offered early retirement to employees 55 or older who’d been with Gannett for at least 15-years.
“The Commercial Appeal is offering an Early Retirement Opportunity Program (“EROP”) to eligible Guild-represented employees in the newsroom,” the memo said. “Time is of the essence. We, therefore, ask that that you sign and return this document to me within 48 hours. The severance deal is based on 30-35 weeks’ pay with a transition bonus of up to $5,520 determined by years of service.”
But how about that digital? Up 3.2 percent!