Friday, February 28, 2020

Gannett Posts Lower Revenue After New Media Merger

Gannett, the owner of USA TODAY, on Thursday reported lower revenue and a net loss in the fourth quarter following its merger with New Media Investment Group in November, a deal that created the largest media company by print circulation and one of the largest by digital audience.

USAToday reports the results came as the newly combined company logged a more than 25% increase in digital subscriptions.

The company, which took on the name Gannett, generated total revenue of $1.05 billion in the quarter, down 9.7% from a year earlier, due largely to print revenue declines.

New Media acquired the larger Gannett, renamed itself and began combining operations of the two companies.

The new company posted a net loss of $115.7 million for the quarter, which included a $101 million write-down due to "revaluation of intangibles" and $146 million in charges related to restructuring and transaction costs.

Adjusted earnings before interest, taxes, depreciation and amortization totaled $141.2 million for the quarter, which was down 19% from the same period a year earlier.

The company – whose more than 260 media properties include the Arizona Republic, Columbus Dispatch, Detroit Free Press and Austin American-Statesman – also reported a 25.3% increase in digital subscriptions to 812,000 when their figures are combined. Paid online subscriptions are viewed as critical to the success of media companies in the digital age, due to declining newspaper dollars.

Gannett executives have said the merger is designed to pave the way for a digital transformation of the company.

Print advertising revenue totaled $334 million in the fourth quarter. When factoring out one-time effects, Gannett's print ad revenue fell 18.4%. Those figures reflect the industry's challenges as readers and advertisers shift online.

The company is reducing its reliance on print and diversifying its revenue with investments in marketing services and other digital products. Digital advertising and marketing services revenue totaled $150 million for the period.

The company said advertising was weaker than expected due primarily to disruption from the merger.

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