Gannett Chairman and Chief Executive Officer Craig Dubow’s Presentation
Hollywood, FL– Gannett executives today spoke at the Noble Financial Sixth
Annual Equity Conference. Below is Gannett Chairman and Chief Executive Officer
Craig Dubow’s presentation:
It is a pleasure to be here to present to you today.
I am sure most of you are familiar with the Gannett Company. While we are well
known for our brands like USA TODAY, the Des Moines Register or KARE-TV in Minneapolis,
our company is so much more. We engage consumers by delivering relevant content
across multiple platforms and connect business customers to their target audiences.
We have a robust digital segment that includes other great brands and represents
a growing part of our portfolio. We own a controlling interest in CareerBuilder,
the leading employment site in North America. They continue their expansion
globally as well. Our digital marketing solutions companies PointRoll and ShopLocal
are both market leaders in their respective sectors.
We have a deep publishing portfolio which includes
81 U.S. daily newspapers, USA TODAY and Newsquest. These media properties include
local affiliated websites and mobile sites that extend our market reach. Most
of our properties are in smaller to medium sized markets but we also have properties
in larger metro markets like Phoenix and Detroit. We produce over 600 non-daily,
niche oriented publications in many of our markets.
Newsquest is one of the UK’s leading regional news providers. As in the U.S.,
the Newsquest group includes locally integrated digital sites as well as popular
classified advertising sites.
Gannett owns 23 television stations in 19 markets that reach 21 million households
covering about 18 percent of the U.S. population.
At this time last year we were managing through an
extremely tough economic environment. As the economy softened, we made a commitment
that we would come out of the recession leaner and more flexible with a stronger
balance sheet and better positioned for growth.
We delivered on that commitment by permanently restructuring our businesses
and creating efficiencies company-wide. That included centralization and standardization
of wide-spread operations. We focused on the consolidation and outsourcing of
our production and distribution as well. The impact to our expense structure,
bottom line and ability to generate free cash flow has been dramatic. Operating
cash flow was $1.1 billion in 2009 despite a significant decline in revenues
driven by the worst economic environment in 80 years. And the efficiency efforts
In an extremely tough operating environment, we put ourselves in a better position
to grow revenues as the economy firms by continuing to innovate and improve
our products for both advertisers and consumers. So how and why are we better
In our core media operations, we are engaging with more
consumers than ever. And we are delivering the engaging, relevant content they
want on any platform they desire.
In fact, we are reaching more people more often through the combination of print
and online content. To leverage that audience engagement and create more customer
based ad solutions, we are changing our sales approach in our local markets.
We have started regional client solutions groups which will act much like ad
agencies to develop marketing solutions for local and regional clients.
Local market strength is a primary driver of our success
in the Broadcasting segment. The power of the local television franchise is
crucial and was evident with the success we achieved in both revenue and viewer
rankings for the Winter Olympic games.
We are expecting a healthy level of political and issue related
ad demand this year due to the strength of our local news programming combined
with a very strong footprint. There are heated contests in almost all of our
markets. As important, core advertising in Broadcast is strengthening – particularly
the auto and retail categories.
A strong local market presence is one facet of
the many consumer touch points we can deliver to an advertiser. We are not only
connecting with audiences through our local media, we are also connecting to
consumers through digital communities that are not dependent on the presence
of a local property. Communities like moms and prep sports, for example.
These connections have enabled us to create an ad network
unique to the Gannett Company. We can offer an advertiser the entire network
or deliver a customized or targeted solution. Additionally, we are creating
a national sales organization that will target key accounts. Through a single
point of contact, we will bring to consumers campaigns that cross all of our
This will lead to more integrated campaigns like the one we developed for the
National Breast Cancer Foundation to help them raise awareness of early detection.
The campaign encompassed almost all of our platforms including: celebrity messages
on our TV stations, pink local newspaper wraps, advertising in USA TODAY and USA
WEEKEND, conversations on momslikeme, mobile messages and much more.
Our digital business is a significant and profitable enterprise.
With 2009 revenues company-wide of over $925 million, it comprised 17 percent
of total revenue last year. In the first quarter this year, digital was again
about 17 percent of revenues and totaled over $225 million.
The majority of our digital revenues and profitability
are generated by CareerBuilder. The folks at CareerBuilder have done an outstanding
job controlling expenses and, as a result, doubled their profitability in 2009
and were significantly more profitable in the first quarter this year compared
to the first quarter a year ago. They are poised to increase their market leadership
as the employment picture improves.
PointRoll is the industry leader in rich media
advertising. They are powering more than 50 percent of all rich media campaigns
online. PointRoll works with over 1,000 advertisers, thousands of online publishers,
and serves over 110 billion ad impressions each year including this movie trailer
for Alice in Wonderland. Beyond a growing and very profitable business, they
give us insight into the pipeline of campaigns that are being developed by leading
ShopLocal works closely with retailers and is the leader in multichannel shopping
services. It connects over 100 of the nation’s top retailers with shoppers through
innovative, effective and measurable marketing solutions that include online circulars,
display advertising as well as social media and mobile.
Looking forward, we see some great opportunities in
mobile. Apple recognized the demand for our content and our commitment and ability
to deliver on any platform. We developed a USA TODAY app for the iPad launch
based on the success of the USA TODAY iPhone app. At this point, iPad users
have downloaded the app over 400,000 times and it is the most downloaded news
app. The launch of the USA TODAY app has been funded by Courtyard by Marriott
through July 4th.
And we are deeply involved in one of the most exciting innovations in television
– mobile digital TV. This is the next generation of television, linking live television
with the freedom of mobile devices. Two of our stations participated in the nation’s
first trial to provide live digital TV to consumers on their laptops, mobile phones,
smart phones, entertainment systems and more. And we are one of twelve major broadcast
groups which have formed a joint venture to develop a new national mobile content
This is another example of the opportunities we see as consumer behavior changes
and technology evolves.
So, in summary, in these extremely challenging times, we
maintained a profitability level that is still the envy of most businesses and
generated significant operating cash flow.
The Gannett Company today is an efficient, customer-focused enterprise. We have
a robust, profitable and growing digital business tightly interwoven with our
core operations. We continue to make fundamental changes to better align our
core operations to the changing business environment.
Above all, we achieve our objectives by continuing to produce award-winning
content our audiences seek out and delivering it to them where they want to
find it. Our recent earnings have demonstrated our ability to create significant
operating leverage as this economy recovers.