About Indiana Newspapers LLC
Gannett operates the national newspaper USA TODAY, which claims the highest circulation of any US daily paper, along with nearly 110 local media organizations in about 35 states and Guam. The publishing company also operates more than 150 local media brands and magazines in the UK. Its US digital properties attract more than 130 million unique monthly visitors, while its UK newspapers claim a weekday audience of about 8 million readers. ReachLocal is Gannett's digital marketing business, offering digital advertising and services such as search engine optimization and live chat. New Media Investment Group, the parent of GateHouse Media, is buying Gannett in a deal worth roughly $1.4 billion.
Gannett has two operating segments: Publishing and ReachLocal. Publishing is the company's largest segment, accounting for around 85% of Gannett's revenue. The segment comprises the USA Today Network and Newsquest and generates revenue from print, digital advertising, and circulation. Gannett achieves cost efficiencies by sharing back-office operations, such as financial services and accounting, content design and layout, and print and digital creative development, across USA Today and local operations.
Gannett's ReachLocal segment accounts for about 15% of the company's revenue. ReachLocal's focus is on local businesses looking for a single, unified solution to their marketing needs. It provides products and solutions in two guises: digital advertising (search engine marketing, social media, and display) and subscription solutions (lead conversion software, SEO, and live chat).
Gannett's newspapers cover world news but are distributed mainly in the US and UK. Newsquest operates from more than 90 locations across the UK. ReachLocal operates in more than 25 locations in more than 15 states including Arizona, California, Colorado, Florida, Georgia, Illinois, Louisiana, Massachusetts, Maryland, Minnesota, North Carolina, New York, Pennsylvania, Texas, Washington, and Virginia. ReachLocal also has about 20 international offices locations in Australia, Brazil, Canada, India, and New Zealand.
Gannett generates roughly 15% of sales outside the US.
Sales and Marketing
USA TODAY is especially popular with business travelers and other Americans staying in hotels. Its marketing and advertising are geared towards business people. Gannett uses print media, online, mobile, tablet, and niche publications to promote its products and services.
Gannett's revenue has followed general, albeit slow, upward trend since its spin-off in 2015. Profits have varied wildly, however, due to difficult market conditions.
In 2018 Gannett's sales fell 7% to $2.9 billion, the first interruption to growth in a long while. Gannett experienced softness in publishing segment advertising and marketing services revenue, a reflection of lower demand for print advertising. Circulation revenue declined. On the upside, pricing increases provided a boost to sales, while ReachLocal performed well in 2018 thanks to the contribution of WordStream, acquired mid-year, and the migration of customers to the ReachLocal platform from the publishing segment. A 53rd trading week in 2017 also weakened 2018's sales by comparison.
Net income jumped 118% to a still-weak $15.0 million. Gannett's bottom line was improved by a reduction in operating loss in ReachLocal from $-18.9 million to $-1.1 million and an $18.7 million decrease in income tax.
Gannett's cash on hand grew $27.2 million during 2018, ending the year at $116.9 million. The company's operations generated $157.5 million, while its investing activities used $128.5 million and its financing used $57.9 million. Gannett's main cash uses in 2018 were capital expenditures, acquisitions, net borrowing payments, and dividends. Besides operating cash, proceeds from convertible debt and sale and leaseback transactions supported Gannett's liquidity.
GateHouse, the largest owner of US newspapers by titles with 400 papers and a total circulation of 4.29 million, is combining with Gannett, the largest newspaper group by circulation. GateHouse holdings include the Austin American-Statesman in Texas and the Columbus Dispatch in Ohio. The merger is in part a strategic response to Google and Facebook siphoning away advertising dollars from other media sources. By joining forces, old media giants may be better equipped to deal with the increased competition and rapid decline in print advertising.
The deal is expected to close by the end of 2019. Gannett shareholders will own roughly 49.5% of the combined company, with New Media shareholders owning the rest. Once the transaction closes, the new private equity-backed company will retain the Gannett name and its McLean, Virginia headquarters.
Mergers and Acquisitions
In 2018 Gannett acquired Wordstream Inc, a provider of cloud-based digital marketing optimization services for local and regional businesses, delivered via a software-as-a-service model. The $130 million acquisition strengthens Gannett's digital marketing business.
Gannett traces its roots to 1906 when Frank Gannett bought a half-share in New York's Elmira Gazette. Frank made further acquisitions of local newspapers across the Northeastern US. USA Today was launched in 1982. Gannett took its current form in 2015 when it was spun off from its parent company -- then called Gannett, now called Tegna -- which retained the broadcast media business.
130 S MERIDIAN ST
Indianapolis, IN 46225-1046
Phone: 1 (317) 444-4000
Employer Type: Privately Owned
Downtown Indy Reporter: Amy Bartner
Automotive Director: Steve Hartley
Asst Contrl: David Washburn
Employees (This Location): 900
Employees (All Locations): 1,300