Tuesday, March 3, 2009
A silver lining in a declining economy: Dramatic fall of Gannett stock provides opportunity for its papers like Tennessean to be sold to communities
I have a dream.
It would be for a group of local investors to make a bid for The Tennessean. I'd be one of them. And I'd represent the investors in the building and would like the power to go in and fire the publisher, editor and other top editors who do not know our area and its people -- nor do they care to.
They do not like the military. They do not like people of faith. They do not like conservatives.
There are more collectives to add to the list. But consider in these desperate times the difference that a better Tennessean could contribute to the Nashville area. And I know the professionals in this industry who could turn around the paper's fortunes. They felt forced to leave The Tennessean because of its bad management. They would return if local investors took over. They loved this area. Who doesn't?
The Tennessean now has been reduced to such a wafer-thin size because the newspaper's profit margin of 21 percent is unsustainable.
I used to think such a turn of good fortune for the Nashville area was impossible. But Gannett's financial fortunes and debt load have finally caught up to it, along with incredibly bad management -- with a few exceptions at a few newspapers. USA Today is sustainable by itself thanks to former Tennessean publisher Craig Moon. He is a good man and businessman.
The price per share fell to an unbelievable $2.22 per share today, losing a quarter of its value today. The company last month cut its dividend by 90 percent, which was the only value to investors.
Consider that just in 2001, I flooded Gannett stock into my 401k to avoid losses in the stock market downturn. It was trading at more than $81 a share. I sold out of it after the downturn. So the thought of it at $2.22 is unbelievable.
And that is why I have hope that the company will need to sell some of its newspapers for cash. And that can provide communities such as Nashville the chance to take back newspapers such as The Tennessean for the interests of the people. And when you give the people what they want, profits can be maintained and an adequate staff.
Yes, there is the Internet. But The Tennessean and Gannett never really invested in its website. And it became so slow to access, that readers deserted it.
The San Francisco Chronicle may close. The Rocky Mountain News did. Philadelphia's newspapers are in bankruptcy. More big newspapers will fall. Nashville needs a good big newspaper. It doesn't have one now.
But perhaps local investors could change that.
And I'd be willing to help with my dollars and time and knowledge of the good people here who deserve better and the good journalists and managers who could turn things around with their humanity and vision.