Even newspaper companies don’t want to depend on newspapers any longer.
Gannett Co. once had a reputation for being the nation’s most disciplined manager of print publications that could be as large as USA Today and as small as the Palladium-Item of Richmond, Indiana. Now, in a telling maneuver, the company is jettisoning its newspapers in favor of broadcast and digital – and it isn’t the only one. The fact that it will keep the Gannett name alongside the print publications is at best a semantics discussion.
Gannett joins a long line of storied newspaper publishers who are abandoning the medium that brought them decades of growth as changes in how consumers gain access to news and information turns those broadsheets and tabloids into creaky vehicles that capture significantly less interest from advertisers than in years past. Belo Corp. was once known as the publisher of the Dallas Morning News. But in 2008, it split off its newspaper holdings from a passel of TV stations it owned, and is now part of the new Gannett. Tribune Co., named for the Chicago newspaper that once stood at the center of its assets, this week spun off its newspapers and is now known as Tribune Media Co., an owner of WGN and other broadcast properties. And just last week, E.W. Scripps Co. and Journal Communications announced a merger that would combine broadcast assets while jettisoning the various local papers that once were the foundation of both companies into a separate concern.
“We believe separating these businesses will unlock shareholder value both in the near term and increasingly as they develop independently in the future,” said Gracia Martore, Gannett’s chief executive, in a prepared statement. Martore will take the reins of a new broadcasting and digital company that has yet to be named, while Robert J. Dickey, currently president of Gannett’s community publishing unit, will take the reins of the print-focused concern.
The recovering publishers are only following advertising trends. In 2013, ad spend fell 3.8% for local newspapers and 3.6% at national newspapers, according to Kantar, a tracker of ad spending, as financial-services advertisers, retailers and movie studios sought new places to get the word out about their products. In 2012, ad spending on local newspapers fell 2% while ad outlays for national newspapers declined 12%, according to Kantar data.
The one-time companies are betting that TV stations and digital properties associated with them will be able to achieve the kind of steady growth that newspapers are less able to provide. The moves come as a new generation of consumers starts to spend more time using mobile devices to access news and information, as well as streaming video.
While Gannett’s maneuver marks a break with its history, it doesn’t necessarily come as a surprise to market watchers. After closing on a purchase of the Belo stations in December, Gannett agreed in May to buy six TV stations in Texas from London Broadcasting.