About the only good news in Gannett’s October results was that the decline in advertising revenue at the company’s newspapers didn’t accelerate much (for the past several months, it has been stable at about -5% year over year). The company’s broadcast revenue, on the other hand, plummeted 24%–in part due to the loss of political spending vs. last year–and it will be down in the high teens in Q4. The decline in broadcast compounded the company’s woes, and overall revenue dropped 7% in the month.
Gannett has stopped reporting newspaper online revenue, which almost certainly means that it’s lousy, and now plays up only the tiny “online broadcasting” revenues, which were up 30%. Circulation is down again–2% daily and 5% on Sundays (which, as Alan Mutter has pointed out, account for up to half of the advertising revenue at most newspapers).
Unlike the Washington Post’s newspaper business, which is running on fumes ($9 million of operating income in Q3), Gannett’s newspaper business is still throwing off sizable operating income of about $350 million a quarter. As the recent announcement of job cuts at the mighty USA Today illustrates, however, Gannett’s cost cutting has reached the people layer. At some point, we expect a wholesale restructuring.