To the barricades!

The emphasis is always on the "net"

Gannett Co. bought The Des Moines Register in 1985. The Register was a great newspaper; at the time it had won more Pulitzer prizes for national reporting than any other newspaper save The New York Times. I worked for The Register in college and for several years afterward, before my knowledge of soybeans and hogs proved irresistible to The Times and I moved to New York. A couple of years later, when Gannett bought The Register I asked a Gannett executive: How do you pronounce the name of your company? Is it GAN-nett, or gan-NETT?

“It’s gan-NET,” he said. “The emphasis is always on the net.”

He was, of course, referring to the amount of money that is left over after expenses and taxes and accounting tricks … otherwise known as profits. (He was not referring to the Internet, of which Gannett still has barely a clue.)

Why is this man smiling?

So it was with profound sadness that I learned of the resignation of Gannett CEO Craig Dubow last week for health reasons. Mr. Dubow, 56 years old and a 30-year veteran of the company, assumed the helm of Gannett six years ago but has been plagued by back and hip problems. Like Steve Jobs, who was four months younger than he, Dubow took a couple of medical leaves of absence before deciding that he could no longer carry out the duties of CEO.

And that’s where the similarities with Steve Jobs end. I do not know Mr. Dubow personally, and have no reason to doubt that he is a fine fellow. My sadness comes not from his departure from Gannett, but for what it exemplifies.

When Dubow took over as CEO, Gannett employed some 52,000 people in its publishing, broadcast, digital and mobile divisions. When he resigned last week, it employed 32,000 people. Among the 20,000 jobs that were cut were thousands of talented journalists. Mr. Dubow also required many employees to take unpaid leaves of absence, and instituted pay freezes. He referred to this as “increasing workplace efficiencies.”

When Dubow took over as CEO, Gannett’s stock price was $72-something a share. At his departure last week it was $10-something, down 85 percent in his tenure.

Last year, while laying off more journalists, Gannett increased Mr. Dubow’s 2010 pay package to $7.9 million. Including the estimated future value of stock awards and options, his 2010 pay package could increase to $9.4 million. Gannett said the raise was meant to reward Mr. Dubow for boosting the publisher’s earnings — remember, the emphasis is always on the net — for the fourth consecutive year.

Mr. Dubow managed to keep earnings high, according to analysts, by cutting costs (i.e. people) more aggressively than any other company in the media industry. Gannett refers to this as “workplace restructuring.”

Mr. Dubow is now eligible to collect a retirement and disability pay package of $37.1 million, according to Gannett.

Bob Dickey, the head of Gannett’s U.S. newspapers division, also got a hefty pay raise in 2010 to $3.4 million, up from $1.9 million the year before. In a memo this summer announcing that 700 more newspaper jobs would be eliminated, Mr. Dickey wrote: “While we have sought many ways to reduce costs, I regret to tell you that we will not be able to avoid layoffs.”

After $1.5 million raise, layoffs

But back to Mr. Dubow. We mentioned the Steve Jobs comparison, and I hasten to add that I wish Mr. Dubow a speedy recovery from the medical problems that required his leaves of absence and resignation.

  • Annual base pay: Steve Jobs $1. Craig Dubow $1.2 million.
  • Stock price during CEO tenure: Apple, up 4,000+ percent. Gannett, down 85 percent.
  • Job creation during CEO tenure: Apple, plus 28,000. Gannett: minus 20,000.
  • Notable new products as CEO of Apple: Macintosh, iMac, MacBook, iPod, iTunes, Apple Stores, iPhone, iPad, etc., etc.
  • Notable new products as CEO of Gannett: ?

In his resignation statement, Mr. Dubow insisted that his top priority as CEO was to serve the consumer:

“I am extremely proud of where we are today as a company. We have always maintained an unwavering focus on the consumer. As a result, we have evolved into a digitally led media and marketing solutions company committed to delivering trusted news and information anywhere, anytime.”

And the Gannett board insisted that serving the consumer — not, of course, to maximize corporate profits and executive compensation — was the corporate goal.

“Craig championed our consumers and their ever-changing needs for news and information,” said Marjorie Magner, non-executive chairman of Gannett’s board of directors.

Gracia Martore, who replaces Dubow as CEO, said: “We will continue our relentless quest to provide trusted news and information and will actively support the people and businesses in the communities we serve.”

These people are lying. The corporate goal is not to serve the consumer; it’s to maximize profits and pay packages for top executives. Can anyone argue that Gannett newspapers and journalism are better today, and that news consumers are better served?

How did Mr. Dubow and Gannett serve the consumer? They laid off journalists. They cut the pay of those who remained, while demanding that they work longer hours. They closed news bureaus. They slashed newsroom budgets. As revenue fell, and stock prices tanked, and product quality deteriorated, they rewarded themselves huge pay raises and bonuses.

This is the sort of stuff that causes people to occupy Wall Street and main streets in cities across the country.

To the Barricades!

UPDATE 10/12: This piece has been updated to clarify that I left The Des Moines Register before it was acquired by Gannett. I have never worked for Gannett. (Nor, I suspect, will I ever.)

UPDATE 10/12: Edited to correct reference to Pulitzer Prizes; The Register had won more Pulitzers for national reporting (not total prizes) than any paper other than The New York Times.

42 thoughts on “To the barricades!

  1. They are lying. And thank you for calling them out. So sad to see the destruction that this company has wrought on the practice of journalism. Nothing about their actions is in the interest of the news consumer; it’s all about the almighty dollar.

    1. Gannett is not the only company that has destroyed the ideal of journalism. The almighty dollar newspaper “syndrome” has affected so many peoples lives; journalists, advertising and circulation folks and so many more! Gannett got called out…would sure like to see some others called out like Freedom Communications and others.

    2. What is happening now is criminal. At at time when we need real oversight more than ever, America’s corporations have defunded it. It is highly reminiscent of the stories told by Sinclair Lewis about how he had to fight to cover his beat. The thing is: America can’t afford this any more. Even though there are great independent investigators like the guys at ExileDonline.com or Matt Taibbi, the problem is that there aren’t enough voices out there. Every journalist who gets silenced makes the inevitable crash that much more likely. I am so disgusted with the whole: “We kept profits up while trashing our means of production” baloney that I can hardly contain myself. Maybe if they hired more people and made each of them buy a subscription to the various pubs and services as a condition of employment, Gannett might have a future. What are they going to do when there is nobody to produce and nobody that can afford to read their stuff?

      Giving these clowns big raises makes the board highly suspect in my eyes.

  2. Great assessment. More of this type analysis is needed when covering corporations, payouts, compensation. You nailed it on so many levels.
    PaidContent says the comparison between Jobs and Dubow is like comparing apples to oranges. I disagree with that assessment.
    Your point is about leadership and results. Making profits by reducing the workforce is not brain surgery or even close to inventive, especially when the true results are an erosion of quality, reach and future growth.
    Companies create jobs because they must in order to achieve certain goals; if they could get fantastic profits with hiring few people, they would. So to dub them job-creators is misleading just as saying customers are the first priority of companies.

  3. I found your blog post through Dave Hughes’ DCRTV website. Thank you for bringing this to our attention. I hope you don’t mind that I shared the link with my friends on Facebook.

    Thanks, again!

  4. “The Register was a great newspaper; at the time it had won more Pulitzer prizes than any other newspaper save The New York Times.”
    Actually, it was more Pulitzers in national reporting than any paper but the NY Times, not total Pulitzers. Details, details.
    But the Register was a great paper

  5. I found a link to this page via David Carr’s Twitter feed today, and though none of this is news to me it still made my blood pressure soar to be reminded of it.

    My five years as a reporter working for USA Today almost exactly paralleled Mr. Dubow’s run as CEO. (I left for another job in January, thankfully.) I never met him (he wasn’t big on employee outreach), but like many of my colleagues I felt the sting of his poor stewardship of our company. There was little innovation or imagination at the executive levels under his so-called “leadership,” a word that sticks in the throat when mentioned in reference to Dubow. Instead, he laid off as many people as possible, repeatedly furloughed the rest and collected millions upon millions in bonuses for himself and his fellow executives (sometimes, perversely, for “cost cutting”.) I don’t call that running a company — I call it picking your employees’ pockets.

    His $37.1 million parachute is the final insult. If I were still a Gannett stockholder, I would be raging over what this man has done.

    Imagine reaching the height of your profession — CEO of a major media company — and all you do is damage: he hurt journalism across the country and in many small communities, he hurt Gannett by decimating (twice over) and demoralizing its workforce, and managed debt and made acquisitions in a way that, as Peter noted, led to the stock price plummeting from $72 a share to $10.

    What does he have to look back on with pride? Golf applause from Wall Street for cutting costs — a temporary fix at best for a company that needed more strength, not less? He was like a primitive doctor trying to fix a curable illness through bleeding instead of actual medicine.

    Steve Jobs will be remembered for spurring creativity, for giving tens of thousands high-paying, stimulating new jobs, for offering the world countless products that improve our lives (and may even save journalism from the likes of Dubow and his ilk.)

    Gannett’s former CEO will be remembered only for the opposite — if he is remembered at all.

    Craig Du-who?

  6. I found a link to this post on mediabistro.com. I posted this comment at the end of their blog post:

    Gannett? How about Tribune executives??!! This is from LAST WEEK:

    http://www.businessweek.com/ne

    After years and years of laying off journalists at the LA Times, Chicago Tribune, and other news outlets, they got approval from a judge to reward themselves with millions in bonuses that are apparently “critically important to maintain proper incentives for the management team.”

    I mean, obviously I’m just a little peon who doesn’t understand the big picture here, but from my perspective (laid off from the Tribune company a few years back while making a miniscule salary) it sure feels more than a little unfair…

  7. WEIRD, BIZARRE & ODD

    I could give a rip about Gannett and Gannettoids. I do care about intellectual rigor.

    Comparing Steve Jobs (RIP) and a Gannettoid is like comparing Einstein and lab manager. Weird, bizarre and odd.

    Opinions are like butt-holes — everyone has one. Clear thinking is another.

  8. None of this is weird or odd. This is the corporate common practice. Boards are filled with cronies of the CEOs, particularly on the compensation committees. They are thieves of value for their companies and are rewarded for it right to the moment (i.e. Tribune) the company collapses. Couldn’t the judge on Tribune ask the lawyers demanding the executive bonuses a simple question: “Where are these people going to go? They drove this company into bankruptcy? They didn’t challenge a unethical, corrupt top management. They profited from the misery of their fellows. Who would hire such people? The answer: Nobody.”

  9. Outstanding.

    It is much more difficult to manage a company in a declining sector than in an expanding one, and usually not as well compensated when you do a good job.

    Dubow did a lousy job, but that does not mean it wasn’t a tough job to have.

    It is instructive to list which kinds of new communications technologies newspaper companies managed to enter and make money from:

    Radio, local and broadcast television;

    and which they did not:

    Telegraph, telephone, cable television (with the notable exception of Landmark Communications), and everything digital.

    The inability of newspapers to stop theft of their product by digitizers was, and is, the barrier, I think. Also, it was pretty easy for newspaper people to understand what radio was, much more difficult for us to understand what cyberspace was.

    I recall being puzzled when you first used the term.

  10. HBarca is absolutely correct: Where are these “job decimators” going to go? There are precious few viable news corporations, particularly in print, and no news organization with half a brain cell would want these vultures on board.
    Gannett is hidebound, and has been for years. Martore — whose background ominously is in finance, not news — is 60, Magner, who also has no news experience, is 62. All the top people have been good little yes men and women throughout their careers, and they love to flash their Presidents Rings. If any company is in need of fresh blood, it is Gannett.
    And it’s too bad Frank doesn’t give a rip about Gannett. This country needs news gatherers, strong and independent. I can’t say Gannett still fits that bill (maybe it never did) but as more and more newspapers and magazines go under, the more power goes to those who control us for their own ends.

  11. Shame on Dubow, shame on Martore, shame on the Gannett Board. If we are all in this together, act like it! Lead from the front, share the risk and rewards. Leaders don’t get rich from the suffering of others.

  12. I’m not a journalist and my take on Gannett differs, as far as I can see, to that of the journalists commenting on your piece. I’ve seen Gannett from the perspective of both a puzzled and outraged consumer. It’s the most read daily in my area. (There are in fact six Gannett dailies in NJ, plus a few weeklies, all of which carry the various viruses which they inject into whatever issue they wish to distort.) But ten years ago I reached the conclusion that Gannett’s editors were liars because of their distortions, censorings and outright lies about the problems in N.J. public schools. Gannett’s editorial tack was to blame teachers, when the problems were caused by forces outside the schools.
    Because of Gannett’s distortions state elections went mainly to those who are now busy replacing the public school system (rooted in the liberal arts and humanist traditions) with business friendly charters whose educational content can be controlled, now that tenure safeguards, intended to insulate teachers from the vagaries of partisan politics have been eliminated . I won’t bother to go into details. Suffice it to say that the least of Gannett’s sins is overpaying CEOs.
    My reason for adding my comment is that I am surprised that you made no mention of a Book titled “The Chain Gang – One newspaper versus the Gannett Empire,” by Richard Mccord.” Which basically shows Gannett to be far worse than many believe it is. Although this isn’t mentioned outright in the book , with the help of connecting not a few suggestive dots what becomes obvious is that Gannett is in fact a key part of the conservative propaganda machine that has made possible the ascendency of a far right ideology that is now strangling American democracy.
    Gannett has provided the important service of poisoning political discourse in general and compromising to an extraordinary degree the nation’s free press, and in no small way, given that it still owns a huge number of influential dailies and non dailies.

  13. Still more about the real Gannett:
    Why is the Tea Party doing so well, you ask? There are good reasons, not entirely attributable to black magic. Some concern the inability of Democrats to organize or to act in any way with a sense of urgency, preferring it seems to hold on to their naïve belief that the “system” works. Clearly it does not. And though Democrats do bring their own liabilities to the table-when acting stupidly-Conservatives have a methodology that Democrats would do well to at least act like they understand.

    Conservatives do well because they work assiduously to gain or to hold on to power. To this end they make promises they cannot keep-Dick Cheney on the Iraq invasion- or they create “hot button” issues to sway single-issue voters: Health care, Abortion, Gun Control, the Death Penalty, Drugs, are issues that prevent us from focusing on real issues. What is most strange is that Democrats don’t seem to understand that Conservatives are vulnerable to simply pointing out that these phony issues invariably cost a great deal: It doesn’t seem to matter, for example, that the freedom to own guns in today’s dysfunctional America results in gun violence that costs about $100 billion a year; or that blocking sixty years of universal health care proposals equates to trillions of lost dollars, not to mention the huge unquantifiable cost in human suffering.

    The latest hot button issue is school reform, needed, conservatives say, because there are too many bad teachers. While some reform is necessary, it cannot come from professional educators because conservatives have intentionally politicized the problem, making it impossible for educators to even suggest solutions. But more to the point, these problems are not caused by bad teachers. They are caused by factors outside schools: poverty, racism, reverse racism, drug addiction, the breakdown of the traditional family and community, all caused or worsened considerably by the ill-conceived social and economic policies conservatives have pushed for the last thirty years. Over the last ten years they have added hyper- consumerism to the mix which has meant valuing the almighty dollar above all else and making greed and acquisitiveness virtues, and humility and integrity weaknesses. It is because of their influence that today many American children believe that “you must get rich or die tryin’.

    Some think this issue unimportant. Not so. Conservative and Liberal views on education are worlds apart: Conservatives believe that the purpose of school is to teach people how to make money and become small cogs in a big machine. Liberals believe in bringing out personal abilities and helping people become independent, thinking beings.

    Another reason why conservatives are doing well can best be understood by buying a newspaper or turning on your TV: To sell all those false promises and hot button issues, conservatives have over the last thirty years built a nation-wide propaganda machine that is unceasing in its efforts to distort, suppress and twist whatever truths it can to “fool some of the people all the time.” This machine consists mostly of the Murdock group of broadcast media-Fox , News Corp- and the Gannett organization’s extensive coast-to-coast newspaper empire which owns eighty or so daily newspapers, including “USA Today”, and about 900 periodicals as well as “USA Weekend.” They also own Army Times Publishing, which prints all armed forces periodicals. Murdock also owns The New York Post and the Wall Street Journal. Add to this Talk Radio, almost 1000 related web portals and internet sites, conservative indirect control of organizations like the Associated Press and you have a threat to democracy unprecedented in size and scope. And they have used it well because with it they have gained the trust of millions of hard-working Americans and then subjected them to constant streams of ad hominem invective that demonizes and dehumanizes any who disagree with their ideology.

    The political philosopher Montesquieu once observed, “Republics end through luxury; and monarchies through poverty.” Being students of history, the Founders understood that widespread injustice invariably leads to anarchy and social dissolution, which is why they gave the word “Justice” a pre-eminent position in the U. S. Constitution. If we look at what Conservatives are doing, it is obvious that they not only care nothing for Justice, but they are attempting to eliminate any indication that Montesquieu was right. They have declared war on truth, justice and the common sense that binds these words together. Isn’t it about time they were made to answer for it?
    By the way, strangely enough, one would be hard pressed to find that quotation in any modern book of quotations, Bartlett’s for instance. It appears that the last time it was considered part of our literary heritage was in 1927 when it appeared in Putnam’s Book of Quotations. The question is who decided it should no longer be part of that heritage?
    Donald Wood, 23 Elm Drive, Neptune, NJ 07753; 732 492 9176

  14. Thanks for this great piece. I grew up delivering and reading The Des Moines Register. This was back when delivery boys were still really boys. When I read The Big Peach, the vaguely peach-colored Sunday sports section, for which Bill Bryson’s dad wrote, I had no idea the Register was a great paper. It thought of itself as a newspapers for the entire state of Iowa, and it took this notion seriously, right down to the Iowa angle, if one could possibly be found, on national and international stories. Its columnists were first-rate, its editorials thoughtful and sometimes even courageous.

    Today the Register, under the aegis of Gannett, is a shadow of its former self. I look at the online version to read about Hawkeye football, and it’s sad to see how diminished, in terms of of coverage and content, the paper is. Scarcely a trace of the paper I used to toss up sidewalks from my bike.

    David Carr’s piece in today’s Times sent me here. This is a terrific blog–not only intelligent but handsome. Your attention to design evokes Apple. I look forward to reading more. Many thanks.

  15. Peter: Could not agree more. My local Gannett paper, the Asbury Park Press, was a very good paper when I was young, and a journalism student at Rutgers. In-depth local news coverage, great photos (of course, many parts of the New Jersey Shore area were photogenic, and still are) and one of the first papers to have a dedicated environmental reporter. Now the paper is soulless (from a journalistic POV), with rote articles from town councils, county freeholder meetings and police reports. The news coverage seems phoned in. Even with a major crime, such as a murder, or even the arrest of a politician, it sometimes seems like there was not even a reporter at the scene. It is very sad on so many levels.

    1. I hate to repeat points already made, but this one demands it: I cannot overstate the amount of damage Gannett has done to public school systems across the country. My state, NJ, is a case in point. The blame-the-teacher and their Unions lies began in 1998. Then governor Christine Whitman used them to justify passage of laws permitting the opening of 125 publicly funded charter schools. By constantly keeping the issue in readers’ minds, Gannett has enabled the next and present republican governor, Chris Christie, to carry on where Whitman left off. His methods have been far more egregious and aggressive, resulting in laws that have set the unions back decades and which allow many more charters to be started. Of course Gannett has not acted alone. It has been a tool in the hands of greter powers, none elected, none even with a face, and certainly there will be no investigative reporting to tell that the barbarian is inside the gates.

  16. Kudos, Peter. One can only say: ever has it been thus. When did Gannett and other chains (with a few notable exceptions such as Knight Ridder in the good times) NOT suck wealth out of communities and steadily hollow out the content of their newspapers? They’ve only perfected the art and taken it to new lows in recent years. As Donald Wood notes, McCord’s “Chain Gang” documents the Gannett system long before the Internet came along to buzz the company.

    Ditto also to Mark Haviland re the Asbury Park Press. I have good and talented friends still there, but it’s a travesty what’s been done to the paper. See, e.g., Downie and Kaiser, “The news about the news: American journalism in peril,” which documented the installation of thug publisher Robert Collins at the APP: http://books.google.com/books?id=ySyfJQFajJkC&pg=PA86&dq=linsk+collins+asbury&hl=en&ei=ef-mTo2NJeugsQL-mJzNDw&sa=X&oi=book_result&ct=result&resnum=3&ved=0CDsQ6AEwAg#v=onepage&q=linsk%20collins%20asbury&f=false

  17. America’s publicly traded companies and related boards of directors should be reviewed with more scrutiny. While a fan of capitalism and the fact that capital markets allow for entrepreneurs to bring their ideas and businesses to greater heights, the boards of directors and compensation committees feel like a frat club. There are dozens of overpaid executives who are compensated based on a comparison of “similar” companies that is the equivalent of the fox guarding the hen house. While they are not doing anything illegal, shareholder activism is poor – probably because owning stock is more like owning a lottery ticket. Many problems here that need to addressed.

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