Gannett announced that, for the second consecutive quarter, it would be raising its forecasts for full-year profit, cash flow, and adjusted EBITDA.
The company, the largest newspaper group in the United States, expects to have a profit or loss of $10 million by 2023. Gannett’s total revenue decreased during the quarter ending on June 30. However, digital revenue increased. It ended its second quarter with a $12.7 million loss — an improvement after last year, when it posted a disastrous $54 million loss that led to several rounds of layoffs and cuts.
“We concluded the first half of 2023 with significant momentum, and as we enter the second half of the year, our optimism continues to grow,” CEO Mike Reed said during an earnings call with investors.
In response to the announcement that digital subscription revenue had grown, journalists at several of Gannett’s unionized newsrooms called on the company to share the wealth with its workers. They made their statement just a few short days after Gannett executives were bombarded with emails from journalists who complained about the insufficiency of their salaries.
“We bring information to our communities that no one else can, we fight corruption, we save businesses, we contribute to the changing of laws and lives as staples in our community that even our readers say they can’t live without,” Asbury Park Press food and dining reporter Gabriela L. Laracca said in a press release. “We deserve to be able to start families, we deserve to be able to pay bills, we deserve to be able to buy homes let alone afford our rent, and we deserve to not suffer.”
During their earnings call, Gannett executives stated that they are investing in their journalism to increase their readership. Reed highlighted several recent executive hires including chief content officer Kristin Roberds and chief customer officer Imtiaz Patel. Roberts was previously chief content officer at McClatchy. Patel is the former CEO of Baltimore Banner. Both came on this year after a mass exodus among Gannett’s top leadership.
“We’ve created a notable increase in new audience views in June alone,” Roberts said on the earnings call. “We’ve repurposed funds to make significant investments in content by hiring more journalists, with more to come.”
Gannett tweeted On Thursday, the company announced that it has hired 160 journalists and plans to hire 150 more. Gannett cut 600 employees last year and has continued this trend into 2023. This month, more than 50 production employees at The Pueblo (Colorado) Chieftain will be laid off after the paper’s printing facility closes.
Lee Enterprises, third largest newspaper chain of the U.S. also reported its most recent quarter earnings Thursday. Lee’s total operating revenue decreased compared to last years, while digital revenue increased. Lee attributed its declining revenue to the slowdown of advertising in general and its decision, to reduce print products.
“While we are focused on managing the decline of our print businesses and those revenue streams mature, our main priority is to drive long-term, sustainable digital revenue growth,” said chief financial officer and vice president Timothy Millage.
Those trends mean that during the quarter ending on June 25, Lee’s $70 million in digital revenue represented 41% of its total operating revenue. The company made a $2-million profit.
Gannett still has a significant debt, despite its growth in digital revenue. Gannett announced on Thursday that they had paid down $15 million during the past quarter but still owe roughly $1.2billion from their 2019 merger. In July, the company repaid another $8.2 millions through proceeds from the sale of real estate. The company has a pipeline between $50 and $60 million of additional real estate that will help it repay debts for the remainder of the year.
Lee, meanwhile, has sold $7 million of assets this fiscal year and has identified an additional $30 million of “non-core assets” it can monetize for debt repayment. The company is still indebted to the tune of $460 millions.
By noon Thursday, Gannett stock was trading at $3.18 a share, up 15.6% since Wednesday’s close. Lee shares, meanwhile, were trading at $14.60, a drop of nearly 2%.