Big Trouble for Projo’s Parent Company Gannett as Revenue Plummets, Print Ad Dollars Down 30% in Q3
Tuesday, November 03, 2020
You knew newspaper giant Gannett was facing bad news when they scheduled to release their 3rd quarter financials on Election Day — the busiest news day of the year.
Gannett, the parent company of the Providence Journal, Newport Daily News and hundreds of other newspapers across the country reported massive losses in year-over-year revenue in nearly every category when compared to those “same stores” last year.
PRINT REVENUE: Same store pro forma print advertising revenues decreased 30.9% compared to the prior year.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTCIRCULATION: Same store pro forma circulation revenues decreased 13.2% in the third quarter, partially stemming from a reduction in volume of single copy and home delivery sales
DIGITAL REVENUE: Same store pro forma digital advertising and marketing services revenues decreased 13.5% versus the prior year period
“Same store pro forma revenues decreased 19.6%, due to unfavorable impacts resulting from the COVID-19 pandemic and general trends adversely impacting the publishing industry,” said the company.
The only bright spot was digital subscribers which was up 31% -- no same store data was provided.
Michael Reed, Gannett Chairman and Chief Executive Officer said “Our same store revenue trend, though down 19.6% year over year, improved meaningfully over our second quarter trend of down 28.% year over year. Third quarter Adjusted EBITDA was $88 million, up from $78 million in the second quarter. These results are particularly encouraging given the seasonal drag that we usually experience in the third quarter."
“We also reached a major milestone in our digital subscription growth, surpassing 1 million digital subscriptions during the quarter, thanks to continued strong growth of more than 31% year over year. As we continue to focus on transitioning to a subscription-led business model, we expect to leverage this important milestone to accelerate growth in 2021 and beyond,” said Reed.
Cuts and More Cuts
The company announced major cuts across the country — the euphemism is “synergies.
“Over $218 million in annualized synergy measures were implemented by the end of the third quarter, with approximately $54.5 million in savings recognized in the quarter. On a pro forma basis, operating expenses included in Adjusted EBITDA decreased 19.3% to the prior year quarter due to the implementations of synergies, normal course cost reductions, and temporary expense actions in response to the COVID-19 pandemic,” said the company.
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