Wall Street does not appear to agree that drastic layoffs and budget cuts at Gannett, the nation’s largest newspaper chain, will heal the company’s financial distress.
Gannett stock price closed at $1.49 per share on Friday, plummeting from $6.10 per share one year ago, a 76% decrease in just one year.
Poynter noted that while the value of Gannett shares has dropped 29% in the last month while Down Jones and S&P indices were down just 3%.
Gannett lost $54 million during the second quarter of 2022. The third quarter is over, and the next earning report should come in November.
Inflation has hit Gannett hard: the cost of gasoline, newsprint, and unstaffed delivery routes — CEO Mike Reed says that has increased 274% over the last two years – has created a significant newspaper distribution problem.
“The prospect of a possible recession leaves other advertisers holding back and some readers less willing to continue to pay for print subscriptions, much pricier than they were a few years ago, said Rick Edmonds, a Poynter media business analyst, in his morning newsletter. “While paid digital subscriptions to USA Today and its 200-plus regional dailies are growing at a healthy rate, those new revenues don’t come close to covering what’s being lost in print subscriptions and advertising.”
Gannett owns nine New Jersey daily newspapers: the Asbury Park Press, Bergen Record, Burlington County Ties, Courier News, Courier-Post, Daily Journal, Daily Record, Home News Tribune, and New Jersey Herald.
Gannett layoffs reached the 400 mark over the last few months, including some in New Jersey, and multiple New Jersey-based vacancies have not been filled.