The third quarter of 2022 is over (financial results to be reported in another month or so), but I don’t see any bounceback for Gannett since its bleak second-quarter report in early August.
Wall Street agrees. Gannett shares dipped below $2 in mid-September and have been trading in the $1.55 range this week. You might ask, hasn’t this been a rough period for the market in general? Yes, but Gannett was down 29% over the last month while the S&P and Dow Jones indices were off just 3%.
Gas prices have fallen some. But the cost of newsprint and getting paper editions delivered in a tight labor market remains elevated. Digital traffic, as measured by uniques and pageviews, is off throughout the news industry — a hit to Gannett’s substantial base of programmatic advertising, which is priced by total impressions.
The prospect of a possible recession leaves other advertisers holding back and some readers less willing to continue to pay for print subscriptions, much pricier than they were a few years ago.
I asked whether Gannett has seen any developments in the last quarter, and spokesperson Lark-Marie Anton replied, “Nothing noteworthy other than we are working through the challenging macroeconomic environment just like everyone else.” In Gannett’s case, that means many cost reductions, including 400 layoffs and leaving another 400 job vacancies open.
The company did report in a Securities and Exchange Commission filing Wednesday that it has paid down $50 million of its $1.5 billion debt since June 30 and expects to sell $65 to $75 million in real estate and other assets during the full year of 2022.
Another core problem: While paid digital subscriptions to USA Today and its 200-plus regional dailies are growing at a healthy rate, those new revenues don’t come close to covering what’s being lost in print subscriptions and advertising.
As a result, CEO Mike Reed said in the second-quarter report that the company expects a return to profitability but not as quickly as hoped. For mature companies, Wall Street is not patient about waiting another year or two for an upturn.
A modest plus is that a low stock price is not catastrophic unless it prompts a vulture financial investor to jump in with a takeover bid. And it is hard to see who would be keen to acquire Gannett under present circumstances.
This piece originally appeared in The Poynter Report, our daily newsletter for everyone who cares about the media. Subscribe to The Poynter Report here.