Commentary

Gannett Eyes More Acquisitions, Cost-Efficient Clusters

A few years ago, the fact that the nation’s largest newspaper publisher still believed in the long-term viability of its own industry wouldn’t have been newsworthy. But nowadays, it’s kind of a big deal.


Therefore, it seems significant that Gannett Co. is not only counting on continued demand for print advertising, but actually wants to buy more newspapers.

That’s according to top Gannett executives, who answered questions about possible acquisitions during the company’s second-quarter conference call, indicating the company is definitely in the market for more newspapers, ranging from bigger metro dailies down to small local pubs.

The key consideration, of course, is financial.

Like other big publishers, Gannett is primarily interested in snapping up newspapers that can be added to one of its existing regional “clusters,” allowing it to create cost efficiencies by centralizing print production and distribution.

John Zidich, Gannett’s president of domestic publishing, confirmed that “we’re still very interested in expanding local footprint where it can add to our clusters and is a good fit, proving we can very quickly find the centers to use those brands.”

According to Gannett CEO Robert Dickey, “first and foremost, we're interested in expanding the USA Today Network,” which pools editorial resources from its flagship national newspaper and local newspapers, while offering advertisers access to local markets at national scale.

"Here, the main focus has been on publications serving mid-sized and larger markets, ranging in size from half a million to 3 million inhabitants. However, he added, Gannett is also “very open to markets that might be a little smaller ... but can add some  immediate synergies.”

On the digital side, Zidich said Gannett is interested in expanding its capabilities in digital-marketing services, using ReachLocal as a foundation for expansion in that area. He pointed to recent acquisitions like SweetIQ as an example of complementary businesses that would make attractive acquisition targets.

Significantly, Dickey noted that many of Gannett’s local advertising clients are still print-only, and while digital understandably dominates the company’s planning for the future, print remains a major area of focus.

To that end, Gannett is rolling out a new print pricing program intended to encourage long-term investments by local advertisers, hopefully reducing churn. Gannett is also working to reduce costs by centralizing printing and distribution, with four such facility consolidations in the second-quarter alone.

Elsewhere, Dickey pointed to the success of Gannett’s high-school sports event business, which launched two years ago. In the second season, the series attracted 19,000 participants at 23 events nationally; it also acquired its first national sponsors.

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