That bad news comes from Gannett CEO Craig Dubow, who told Wall Street analysts that it appears the already soft US economy slowed even more in the back half of March. Gannett’s TV pacings are down in the mid to high single digits for Q2 after a 7% decline in Q1. Dubow noted that local is pacing better than national, but is still down. For all of Gannett, Q1 earnings were 84 cents per share, including a onetime gain of seven cents from a land sale. That was down from 88 cents a year ago, but in line with Wall Street expectations.
Total operating revenues from continuing operations were down 8.4% to $1.7 billion. Publishing ad revenues took the biggest hit, down 10.2% to $1.1 billion. Retail print ad revenues fell 7.8% while national held steady, but classified plunged 16%. Dubow said the “difficult real estate market” has continued to have a big impact on classified advertising.
Broadcasting was less bad by comparison, with revenues down 7% to $170.2 million. Gannett picked up an additional $4.2 million in political revenues from a year earlier, but that only partially offset not having the Super Bowl on its CBS stations this year. (Gannett does not own any Fox stations.)
Gannett has been cutting costs. The company reported that expenses in Q1 were down over $100 million from a year ago. Broadcasting expenses were reduced by 5.5% and newspaper by 6.6%.
RBR/TVBR observation: At least Gannett Broadcasting has the fall election to look forward to. What can print hope for? The traditional newspaper model is really suffering. Sure, some lost classified revenue is being recouped on the online side, but double-digit gains in online are, in actual dollars, just a fraction of the double digit declines on the classified print side. Real estate is being cited as the category with the biggest drop, but we doubt that when the real estate market recovers we will find advertising as heavily tilted to newspapers as in the past.