With Monday’s announcement, media analysts reflected on Gannett’s fall and “how it came to be a takeover target as opposed to buying most every newspaper that came out of the market,” said Rick Edmonds, a media business analyst at the Poynter Institute, a nonprofit journalism training center.
Like print media everywhere, Gannett saw steep declines in print advertising with the rise of Craigslist and other online advertising platforms. Readers cut back on print subscriptions in search of digital and free news.
Over time, those factors built pressure on media companies to cut costs and consolidate.
“There are ways you can consolidate," said Harold L. Vogel, a veteran media analyst. "You don’t need two CFOs; you don’t need two chairmen or heads of marketing.”
Gannett’s financial struggles and waves of recent layoffs follow a long run at the helm of American journalism. Today, Gannett’s vast portfolio includes USA Today, 109 local media organizations in 34 states, and dozens of other news brands online in the United Kingdom. Each month, more than 125 million unique visitors access content from USA Today and Gannett’s local sites, according to the company. Still, in January, Gannett slashed jobs at the Indianapolis Star, the Arizona Republic, the Tennessean, the Citizen Times in Asheville, N.C., and other papers, Poynter reported.
Gannett’s history reaches back to 1906, when Frank Gannett and others bought a half interest in the Elmira Gazette in Upstate New York. From there, Gannett acquired and oversaw other local newspapers throughout the Northeast and, in time, the rest of the country. The Gannett National Service was founded in 1943, providing local papers with national reporting and dispatches from bureaus in Washington and elsewhere. The company went public in 1967.
Gannett was also known for bringing innovations to its newsrooms. In 1929, Frank Gannett invested in the development of the teletypesetter. Newsrooms were later stocked with shortwave radio sets to speed up reporting of far-off events, according to a company history. Printing presses were adapted for color at the Gannett Rochester newspapers as early as 1938. A corporate airplane even helped gather news from disparate places.
Much of Gannett’s greatest success came through the vision of Allen H. Neuharth, who rose from delivering a daily newspaper to becoming Gannett’s chairman in 1979.
Under Neuharth’s leadership, the company enjoyed a steady growth period and eventually created USA Today, which initially drew skepticism for its cost and viability. Critics doubted the concept and dubbed the model the “McPaper,” even as the informative charts and exhaustive national coverage caught on with readers nationwide. (Neuharth died in 2013 at age 89.)
USA Today "was cohesive and brought together stories that would cut across local boundaries,” Vogel said, adding that he remembered picking up copies of USA Today in airports and hotel lounges across the country. “That wasn’t there before [USA Today] started.”
The newspaper was heavily dependent on hotels to distribute USA Today across the country. But as hotels cut back on those programs and readers got their news from digital platforms, circulation suffered.
The pressures on newspapers to deliver comprehensive coverage while also staying financially viable hit Gannett and its competitors alike. In 2014, Gannett announced it would spin off its newspaper division into a separate company. The separation created one company dedicated to a digital and broadcasting business and another focused on the newspaper and publishing arm.
The move came as other media companies, including Time Warner and Tribune Company, realized their entertainment and broadcast divisions could perform better if they weren’t dragged down by print publications. Still, the deal left many wondering how Gannett’s print division would grow if it was suddenly a stand-alone newspaper company.
Gannett shares closed at $11.04 on Monday, up nearly 3 percent from Friday.
In February, Gannett’s board of directors rejected a $1.36 billion buyout bid from the hedge fund that owns Digital First Media, accusing the would-be buyer of trying to conceal its “inability to finance and complete” the deal.
Digital First, at the time being rebranded as MNG Enterprises, was Gannett’s largest active shareholder. MNG executives argued that Gannett’s digital investments had not paid off and that the company should stop making any new digital industries and not fill key leadership posts until it launched a new strategy.