Digital Overshadows TV’s Big Year At Gannett

Does Gannett Co. still own newspapers? You could hardly tell it from today’s presentation at the UBS Global Media and Communications conference. The pitch from President-CEO Gracia Martore was overwhelmingly about digital media moves, with some mention of record financial results for the broadcast TV business.

“We are transforming Gannett into a digital powerhouse and finding new ways to strengthen our ties to people, businesses and the communities that rely on us. We’re operating with a sense of urgency and, most important, executing successfully and delivering on our promise to return increasing levels of capital to our shareholders,” Martore told the investor conference.

The rollout of Gannett’s “All-Access” subscription pay-wall model is on-target and has exceeded financial goals. Thus, digital subscriber growth this year is going to make 2012 the first year in six that Gannett has posted circulation revenue growth. Amazingly, Martore managed to convey that metric without using the word “newspaper.”

It was only much later in the presentation that CFO Victoria Harker provided guidance that circulation revenues will be up nearly 10% in 4Q, with newspaper advertising down 6%. Combined, those figures are projected to narrow the total print revenue decline for the quarter to 1%.

Gannett currently counts in excess of 40,000 digital-only subscribers for its newspaper division and Bob Dickey, president-U.S. Community Publishing, has a huge target for 2013. He told the UBS gathering he expects to multiply that figure by five to seven times.

“We’ve invested to expand the digital portfolio to ensure all subscribers would have access to our content on the platforms that they most enjoy. Our first-generation tablet sites are attracting new readers and advertisers and we have many enhancements planned for the coming year — including an evening edition of the Arizona Republic for tablet readers which debuts this week,” Dickey said.

With digital subscriptions running ahead of projections, Martore told the conference that the new revenue stream is expected to contribute more than $20 million to profits in 2012 and over $80 million in 2013.

The CEO also hailed CareerBuilder as a “key component of our digital segment” and bragged that the online job-listing service had outsold rival Monster by $146 million in North America through the first three quarters of 2012. Gannett owns a majority stake in CareerBuilder, with most of the rest owned by Tribune Co. and The McClatchy Co.

With the TV division about to close out a record year for revenues and profits, fueled by political advertising and the Summer Olympics, 2013 is expected to be more challenging. Still, Dave Lougee, president of Gannett Broadcasting, had good news to deliver on post-election sales trends.

“As a result of that historical demand, core will be down this quarter due to political displacement in October and November. But, notably, December core, absent those dynamics, on an apples-to-apples basis, is in positive territory and will finish up in the mid-single-digits,” Lougee said.

In addition to a big boost from political advertising in 4Q, retransmission consent revenues are expected to be up in the mid-30s (percentage). Total revenues for the broadcast division are expected to be up in the high-30s for the quarter.

When 2012 goes into the books, Lougee says Gannett Broadcasting will have an all-time record year, with revenues up by a mid-20s percentage. “Political will finish at $150 million, digital will be up in the low double-digits and retrans for the year will be up in the low-20s above last year for the full year,” he said.