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Gannett and Tribune Publishing, two of the last remaining publicly traded newspaper chains, both reported impressive subscription growth alongside plummeting advertising sales during the second quarter of this year, which was dominated by the coronavirus pandemic.
Gannett — the largest newspaper chain in the country, publishing USA Today and more than 250 other dailies — saw a 31 percent increase in new digital subscriptions compared to the same quarter last year, it said Thursday morning. It has a total 927,000 digital subscribers.
But as marketers responded to the coronavirus and the economic slowdown it prompted by pulling back on ad spending, Gannett suffered, with print advertising falling 45 percent and digital advertising dropping 27 percent.
Gannett placed furloughs on most of its roughly 20,000 employees in response to the virus and, along with the related dip in travel expenses, this led to $125 million in savings during the quarter.
Absolute comparisons with a year ago are misleading, as an earlier, smaller version of Gannett merged last fall with the parent company of GateHouse Media to create the present, much larger version of Gannett. At the time of that deal, executive said it would result in $300 million in annual cost savings by the next year. On Thursday, Mike Reed, the chief executive, said in a statement that Gannett was on track to achieving that goal.
Though publicly traded and owned, Gannett is controlled under a deal that lasts through next year by a private equity firm, Fortress Investment Group, which is itself owned by the Japanese conglomerate SoftBank.
Tribune Publishing, owner of The Chicago Tribune, The Baltimore Sun and roughly 20 other newspapers, posted similar results. Digital subscribers rose 40 percent compared with the same quarter last year, to 419,000, while overall ad sales plunged 49 percent.
The growth in subscribers “marks our highest single quarter of digital subscriber acquisition since we launched our digital subscription product line many years ago,” said Terry Jimenez, the chief executive and president. “We are pleased that these new readers recognize the value in our product.”
The company also reported a 24 percent decline in operating expenses, reflecting efforts to reduce costs. Tribune Publishing journalists were offered buyouts at the beginning of the year, and once the pandemic arrived many were subject to furloughs or permanent pay cuts.
The hedge fund Alden Global Capital has a 32 percent stake in Tribune Publishing and three of seven board seats.
Article source: https://www.nytimes.com/live/2020/08/06/business/stock-market-today-coronavirus