Gannett reported a net loss of $142.3 million for the first quarter of 2021, with advertising revenues down 18% from the previous year, indicating continued financial difficulties that could impact the ten newspapers they own in New Jersey.
The newspaper said on Friday that print advertising is down 25%, and print circulation fell 13% during the first three months of 2021.
The drop in circulation could renew calls for the end of an archaic law that requires government entities to run legal advertisements in print newspapers, a former of taxpayer-funded subsidies that some political leaders feel has overstayed its welcome.
But digital subscriptions are up about 37% and digital revenues are now 29.5% of the company’s total revenues.
“The first quarter of 2021 was our best quarter to date for new digital-only subscriptions subsequent to the acquisition of Legacy Gannett, surpassing 1.2 million, and a very encouraging start to the year as a whole,” said Gannett chairman and CEO Michael Reed.
Executives at the nation’s largest newspaper chain blamed their wider-than-expected losses on the impact of the coronavirus pandemic and trends in the newspaper publishing industry.
“We are pleased to have fully refinanced our 11.5% term loan during the quarter as well as achieving our target of $300 million of annualized synergies, well ahead of our year end 2021 goal,” Reed said. “With the refinancing behind us, we are focused on a long-term, subscription-led, digital growth strategy.”
Gannett New Jersey has faced some troubles of their own.
The Asbury Park Press fired Gustavo Martínez Contreras on after he posted a caption to a photo of an Orthodox Jewish nurse preparing to administer a COVID-19 vaccination that referred to her as “a fucking hot nurse, a total JAP” in March.
That led to widespread criticism of the Gannett-owned newspaper by Gov. Phil Murphy and some of the area’s most influential officials. The Monmouth County Board of Commissioners voted to pull their legal ads from the newspaper and give them to the rival Star-Ledger.
Three Gannett newspapers in North Jersey, The (Bergen) Record, the Daily Record and the NJ Herald – are attempting to unionize in a bid to seem protections from unjust terminations “especially as Gannett and other corporate hedge funds in the media continue to slash newsroom staff and put stakeholder profit over the workers they should protect.”
As a result of the announcement, stock prices for Gannet dropped about 9% in the first hour of trading.
Gannett also owns the Home News Tribune, Courier-News, Burlington County Times, Courier-Post, Herald News and Daily Journal newspapers.