Gannett names Gracia Martore as new chief executive
By Paul Farhi,
Gracia Martore has one of those bios that reads like a Great American Success Story:
Granddaughter of Italian immigrants. Father died when she was a kid. Held down three jobs to get through Wellesley College. Learned a skill and worked like the dickens.
As with most such success stories, this one has a somewhat improbable payoff. After decades of hard work, she gets to run a major corporation.
On Thursday, Gannett Co., the McLean-based media giant, named Martore as its chief executive, making her one of the relatively few women ever to reach the top of the corporate ladder.
The appointment was both a remarkable advance for a female executive and something of a snooze. Martore, who’s been at Gannett since 1985, has been near the CEO’s office in Gannett’s modern Oz office tower near the Capital Beltway for six years, and more or less in it for two of them. As president and second in command since 2005, she has twice been interim chief executive since 2010, while her predecessor, Craig Dubow, took extended medical leaves.
Even so, Martore, 60, sounded energized as she moved in permanently Friday. “I’m not just an optimist, I’m a realist,” she said with gale-force enthusiasm. “I think we have a great company and a great strategy. We have the right brands and the talents in this organization to be winners and to succeed.”
No question, Gannett has some well-known assets. The nation’s largest newspaper publisher owns some 82 dailies across the country, including the Des Moines Register and USA Today. It also runs 23 TV stations, including Washington’s WUSA/Channel 9.
But Martore, a native of the Boston suburb of Belmont, will be seriously tested. The newspaper industry’s long slide has been especially brutal for Gannett. During Dubow’s tenure — a period in which a recession and the shift to digital news devoured newspaper earnings — the company’s annual revenue sank by 29 percent (to $5.43 billion last year), and profit fell 53 percent (to $588 million last year).
To keep Gannett out of bankruptcy — Martore insists it was never a possibility, but rumors to that effect brought Gannett’s stock to historic lows — the company slashed its workforce and asked workers to take furloughs. Between 2005 and last year, according to one count, Gannett cut its global workforce by 20,000, down to 32,600. In June, Gannett announced it was laying off an additional 700 employees.
And to the sometimes-vocal frustration of Gannett’s employees, Dubow and Martore were handsomely rewarded for their cost-cutting efforts. Dubow received a pay package totalling $9.4 million last year — a $5 million boost. Martore’s compensation was $8.1 million — double her 2009 pay. (According to proxy documents released this year, Dubow stands to receive an additional $37 million in disability compensation for leaving the company).
Gracia (pronounced “Gray-sha,” an Americanized version of Grazia, her paternal grandmother’s name) Martore says she can’t promise that more pain isn’t in store. “None of us likes furloughs or layoffs, but across America and, frankly, globally, companies have had to respond to an incredibly difficult economic environment over the last few years,” she says. “It’s my desire as we execute our strategy that we come to a point where those are issues of the past. But I don’t control the economy or business conditions.”
In fact, she says, “these are exciting times for anyone in the media business. I say to my family and to the people of this company that out of great challenges come great opportunities.”
The biggest sign of progress, she says, is that the company’s share of revenue from digital sources is growing and now accounts for about 21 percent of its sales.
Analysts say that Gannett faces significant hurdles.
“The newspaper business is awful, the economy is not helping, USA Today is not having a good year, the local newspapers are not doing well,” said Douglas Arthur, managing director at investment banking advisory firm Evercore, ticking off the things going wrong for Gannett. “They’ve done what they could, but they’ve been really swimming upstream.”
In that kind of environment, Martore was a vote on continuity, said Jim Hopkins, the editor and publisher of Gannettt Blog and a former Gannett journalist.
“If the board wanted big change, they would have looked for someone outside the company,” he said. “But I think what they wanted was more of the same.”
Analysts point to two positive aspects of Gannett: One is solid results in the company’s TV business, which is expected to see growth in 2012 with the Olympics and the presidential campaign. The other is the company’s relatively light debt load, an achievement credited to Matore. But no one is very bullish on newspapers.
Gannett’s board also named its chairman: Marjorie Magner, a board member who is a partner in a private-equity firm. That gives Gannett the distinction of being perhaps the world’s only multibillion-dollar company whose chief executive and chairman are women.
Staff writer Marjorie Censer contributed to this report.