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Mike Reed Sets Goals for New Gannett

Discussion in 'Journalism topics only' started by Readallover, Jan 19, 2021.

  1. ChadFelter

    ChadFelter Active Member

    It counts, sure, but it wouldn't be much of a planning meeting if the plan is just to hope to go viral again. I've found that the best digital editors are the ones who can contextualize the metrics. They spot trends and develop a growth plan by using that data. They don't read too much into one-off successes or failures.

    Most digital editors I've worked for are too lazy or uneducated about metrics to know what they are looking at. They tend to be leftover editors who the company doesn't want to get rid of because they've been around for a while, but they aren't actually qualified to be a digital editor. Institutional knowledge of the area is nice, but if you have no idea how to evaluate the metrics put in front of you, you're a liability as a digital planner/editor.
     
  2. Fredrick

    Fredrick Well-Known Member

    It counts and that editor who said it didn't count is one of the reasons this is one of the worst professions in the history of professions, maybe the worst. "Many," I'd prefer to say "most," corporate editors do not praise, never praise, only criticize and nag. It's very sad. This person felt good about his/her pageviews on a story and the reaction? "Who cares? You're lucky to have a job. Start working. And by the way we don't pay overtime here."
     
    Craig Sagers Tailor likes this.
  3. The Big Ragu

    The Big Ragu Moderator Staff Member

    First of all, it's not a matter of what I agree with. I wasn't giving an opinion. Everything about the way they are ripping the company apart is the way it looks. It's unseemly, but it's reality. I was stating what happened.

    Second of all, Leon Cooperman is such an odd appeal to authority. He can be as big a sleaze as anyone -- even if his act is the frugal guy who drives an old Toyota Camry thing and he would only cash a check for a dollar if he had earned $2. Look, Leon Cooperman made a bad investment, and he got out-manuveured for once in his life. He ended up taking a loss on what is a relatively small investment for him, because he ran into a shark bigger than he is. It shows that he's human -- when he's not trading on inside information.

    Third, the fact that the deal got done with borrowed money (which they borrowed at loan shark rates -- including it mostly refinancing a pile of Gannett debt that was aleady there) doesn't change the fact that Softbank bought the company. Gannett was worth what it was worth and whatever Softbank had on the line (which would have been the value of the New Media stock it put up, and the portion of distressed-entity interest rate and principle that New Media ended up on the hook for by attaching itself to Gannett), their risk was: exactly half the value (or whatever their exact stake was) of what Gannett had sunk to. It's not nothing, the way you characterize it. FWIW, Apollo got seats on the board and has been on board with everything that they have been doing. Everyone is in this to try to pull money off the ship before it sinks.

    Fourth, there is no way to know -- at least as far as I know -- how Digital First would have financed an acquisition. Their offer was rejected before we got that far. What I can say with reasonable certainty -- and this is not a stretch given what Digital First does -- the path that Gannett took wouldn't have been substantially different had they been the buyer. Maybe the specifics about how they gutted the company to extract a return would have differed, but it would still have been a case of exactly what I said: Gannett was a distressed company, with more debt than it was ever going to be able to pay back from operations, and the only buyers left interested in that kind of company are vulture investors. ...IF they see an opportunity to make the parts worth more to them than the whole. If you want to call that immoral, or pretend that there was a savable company there if those immoral people hadn't gotten their hooks into the gem, so be it.
     
    Last edited: Jan 22, 2021
  4. Sports Barf

    Sports Barf Well-Known Member

    Amazing how many day traders there are in this forum
     
  5. The Big Ragu

    The Big Ragu Moderator Staff Member

    Day traders? What am I not understanding?
     
  6. LanceyHoward

    LanceyHoward Well-Known Member

    I don't think layoffs or most other actions vulture investors take to make money on their investment is immoral.

    But don't understand why you call Fortress/Softbank an investor. Fortress/Softbank controlled New Media through a management contract. They only owned 74,000 shares plus some warrants of a company that had approximately fifty-eight million million shares outstanding. The management contract contained incentives to make the company bigger, even if it diluted or otherwise harmed the value of the stock. If you don't believe me read the footnotes of the New Media Investment 10-K's.

    So Fortress merged New Media merged with Gannett to get bigger. New Media was paid $30 million to terminate the contract. New Media will also get a management fee for 2020 that will at least $18 million dollars, and probably more because I think they will a performance bonus for 2020 that could run into eight figures (I would need to look at the 2020 10-K to see the final number).

    So Fortress/Softbank, pulled $50 million dollars plus out of the company when the other equity holders who owned 99.9% saw the stock drop to around four. You believe Leon Cooperman is not a sufficient authority because he lost money in Gannett. So I will speak for myself, who shorted New Media Investments at 10 and covered at two. It may be legal but it is immoral.
     
    Woody Long likes this.
  7. The Big Ragu

    The Big Ragu Moderator Staff Member

    You are are making this distinction that has absolutely no practical difference and you are ignoring all context by either not knowing where New Media came from or just ignoring the history of Fortress.

    Softbank / Fortress / New Media are the same thing for all intents and purposes. New Media was formed out of the ashes of the Gatehouse bankruptcy, which all hinged on Fortress. ... it had to agree to restructure a boatload of secured debt. They agreed, with their reward (if you can call it that) being the founding of New Media (which took over after the bankruptcy) in return for Fortress collecting fees in exchange for managing New Media. Then, Softbank subsequently bought Fortress.

    When New Media took a majority stake in Gannett, Gannett got Fortress too, which is attached at the hip to New Media as a result of Gatehouse. It's not as if Gannett didn't get anything. New Media gave Gannett shareholders cash and stock in New Media (which already had hundreds of small dailies and weeklies that are the legacy of Gatehouse) as part of a merger that put all of those publications under the Gannett name.

    If I am understanding your posts, you seem to think that someone waltzed in and somehow wrote themselves a management contract for millions of dollars in an immoral (and what sounds incomprehensible to me) way. Immoral is subjective, I guess, but Fortress (and subsequently Softbank, which purchased Fortress) didn't pop up out of nowhere. It was Fortress that purchased Liberty Group years ago, renamed it Gatehouse, expanded trying to be newspaper moguls .. and watched their investment fall apart, for which Fortress has had to have lost a lot of its original investment and ultimately had to take a haircut on a lot of debt it had taken on. Fortress has been there all along.

    It's impossible to consider the relationship between Fortress and New Media without that context. The only thing Fortress may have taken out of the Gatehouse bankruptcy were the fees it gets from New Media, with New Media remaining an affiliate of Fortress (and therefore Softbank).

    As for the ownership? OK, it's New Media, not Fortress (or Softbank), although I honestly don't see the difference. Softbank comes with New Media. It's not like this was / is / should have been a surprise to anyone. But to put it technically, New Media paid Gannett shareholders more than $12 per Gannett share for the stake (in cash and stock in New Media), or about an 18 percent premium to where Gannett was trading at the time. That is not nothing. It made New Media, the owner, and Fortress / Softabank a beneficiary because New Media is just an affiliate of Fortress and Softbank (it was set up for that purpose).
     
    Last edited: Jan 22, 2021
  8. ChadFelter

    ChadFelter Active Member

  9. sgreenwell

    sgreenwell Well-Known Member

    I mean, the subhead for that story is one of those dagger-subs that kind of puts it plainly what kind of lunacy that is: "To reach this goal, the US’s largest newspaper chain would have to add 1.8 million new subscribers a year and grow its current base by nearly tenfold."
     
    Fdufta likes this.
  10. Readallover

    Readallover Active Member

    Reed believes he can generate new digital subscribers with low introductory rates and then convert most into full-pay subscribers. It's doubt that he can generate a high retention rate when consumers complain of being nickel and dimed to death.
     
  11. wicked

    wicked Well-Known Member

    Forgive me if I told this story and I’m repeating myself.

    What used to pass for a mid-sized suburban daily nearby offered a 99-cent-a-month deal for however long. I finally figured, what the hell. I went through to sign up and couldn’t figure it out. I think the transaction stopped twice.

    Same paper is now sold in the dollar store for $1, even though the cover price is I think $2. They have a sign in there asking customers to only take one copy. Ha.
     
  12. LanceyHoward

    LanceyHoward Well-Known Member

    Fortress was able to generate $10 to $30 million dollars a year in management fees from New Media, a relatively relatively small company, after it emerged from bankruptcy that continued through fiscal year 2020. Gannett just bought out the remainder of management contract. This contract is described in Item 13 of the 2013 New Media 10-K and subsequent reports. If you disagree with those statements, which I believe to factual, then please tell me what part of the 10-K's I have misread.

    Morality is subjective. I do not believe that whatever events transpired before the bankruptcy filing gave Fortress absolution for their behavior post bankruptcy. I believe what they did post-bankruptcy was immoral because the management contract ignored the best interests of the other shareholders in the company. The item I found most objectionable is that the management contract rewarded Fortress based upon the total equity and cash flow of the company, not the equity and cash flow per share (the management agreement is generally in a footnote and or in the appendix of the 10-k's).
     
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