Gannett's Fiscal Revs Drop 1.3%, Broadcast Is Culprit

by Wayne Friedman, Friday, Mar 16, 2007 8:32 AM ET

THE NEWSPAPER BUSINESS IS SEEING revenues drop--and Gannett Co. is no exception. Usually, the industry dominates Gannett's financial results, but for the latest February period, the McLean, Va.-based media company's revenues tumbled 4.5%--mostly because of lower broadcasting profits. Gannett says this was expected. It blames the lack of Olympic TV ad revenue versus February 2005's results, which included the Torino Winter Olympics. Gannett benefited from $22 million in Olympics ad sales a year ago. Television revenues were down 21.4% in February. All of this is expected to cause the company to slip in the "high-single-digit" percentage range versus a year ago. Broadcasting revenues for its fiscal year ending March 4 were off 10.3%, from $133.3 million in 2006 to $119.6 million in 2007. Still, its newspaper sector had its own problems in February--off 3.8% to $385 million. The blame there was suffering classified business, due to cold-weather conditions in the East and Midwest, where Gannett's newspapers are located. Overall, company revenue during its fiscal year declined 1.3% to $1.28 billion versus the year before. Newspaper ad revenues for the year slipped 1.7% to 801.7 million. Newspapers contributed almost eight times Gannett's revenues to the revenues of its broadcasting properties. As with most media companies looking to grow their digital platforms, Gannett says business from its Gannett Online unit delivered 21,051,000 unique monthly visitors in February, a 13.4% improvement versus the same period in 2006. Given the upward trajectory, Gannett is moving more efforts to its digital platforms. For example, its broadcast staffers have been training some 500 print news people how to shoot video. There were some 3,700 video streams last year--now at 1 million, as of last month. The broadcast team also intends to train its print ad sales in selling more video ad sales.