Gannett, M&As, media models
Gannett, M&As, media models
The media giant, Gannett, continues its acquisition spree backed by deep pockets and solid moves into the revenue-generating media streams. Despite plunging revenues as more advertisers go digital where the readership is, the newspaper industry saw more money into acquisitions last year than any year since 2008.
Gannett's flagship paper USA Today has morphed into "USA Today Network" with local to national newspapers. USA Today can continue to dominate in readership and in revenue from digital advertising and lucrative acquisitions of Cars.com and CareerBuilders.com.
Gannett pioneered "paywalls" restricting access after a few articles without a minimal subscription, which generates more revenue. The New York Times, for instance, who has the second most readership to Gannett's USA Today paper, has over a million subscribers at rates from $3.75 to $8.75 for digital access. But NY Times does not have the reach into local markets through local papers. So far, USA Today does not have a paywall, though all their other newspapers with digital access do. People have more trust in their local newspapers than national papers. So Gannett's local presence reaching over one third of U.S. households through local papers and network affiliate ownership has advantages others do not, but which challenge FCC regulations with each new acquisition.
Acquiring the Tribune Company's Chicago Tribune, LA Times and San Diego Union-Tribune among others would further increase their readership, digital advertising revenues and media reach. Newspapers continue to lose money, but Gannett is debt-free after the spinoff of Tegna, their broadcast/digital arm/new company, who assumed their debt and Gannett's prior CEO, Gracia Martore. Martore makes the presentations to Goldman-Sachs. One of Gannett's large investors is Carl Icahn, who spent tens of millions backing Jeb Bush.
Gannett and Tegna expect to see a huge boost in revenue related to the U.S. Presidential race and the Olympics. Martore told Goldman-Sachs that one of their two main costs are pension commitments to employees of newspapers/media they have acquired. Along the way, Gannett has cut their newspapers staffs from 50,000 to 30,000 with a combination of buyouts and combining staffs and services. Marore's salary has gone up from less than one million in 2013 to over $14 million this year with a $46 million golden parachute.
No debt, deep pockets, a scale and a platform to deliver increasing revenue and a media model that none can match gives Gannett advantages no one else can match. Tegna owns the largest number of local NBC and CBS affiliates, and, soon, the most ABC affiliates.
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