Every quarter, Gannett needs to apply a good chunk of incoming cash to interest and paying down principal on that debt, currently $1.34 billion. Gannett, by contrast, is working off the debt added when GateHouse bought the company in the fall of 2019 (retaining the Gannett name).
The Times also has taken on an expensive fixer-upper in buying the money-losing Athletic. The New York Times has none and has maintained a nice cash kitty to buy or develop new products – the Wirecutter product recommendation site, a successful podcast group, homegrown Cooking and Games sites – supplemented by acquiring the wildly popular Wordle puzzle in January. Together with the elimination of Saturday print papers and a challenging economy, Gannett CEO Mike Reed conceded Thursday that an unexpected number of current and potential customers have decided that they can do without.Ī second factor is debt. The company probably has at least double the news staff, but it is no secret that at its smallest papers, the daily reports have become thinner than thin, in extreme cases produced with just one-full-time reporter and a remote editor. Gannett needs to turn out more than 200 reports daily. The New York Times, with its mammoth 1,800-plus newsroom can produce a single news report for all its customers. Its supplementary offerings like Games and Cooking cover in slower periods. But the company also regularly showed six-figure quarterly gains in paid digital before that and continues to do so. In the Trump era, the national news cycle was hot. CEO Meredith Kopit Levien likes to say that the Times “addressable” market of English speakers totals 135 million. Of course the Times has a national and international market, reachable by readers in digital format with no paper or delivery expense. The companies are roughly the same size – Gannett actually somewhat larger with $749 million in revenues for the second quarter compared to the Times’ $556 million. Wall Street responded by taking the value of Gannett’s already battered stock down by roughly a quarter Thursday and Friday. But it posted an operating loss of $54 million. Thursday morning, Gannett, whose holdings include USA Today and more than 200 regional outlets, reported digital gains of its own – 120,000 more paid digital-only subscribers than the previous quarter. reported typical net growth in its various digital subscription offerings of 180,000 and an operating profit for the second quarter of $76 million.
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