Gannett, the owner of USA TODAY and more than 260 other daily publications, is suspending its dividend and implementing a variety of cost cuts to shore up its finances as the coronavirus wreaks havoc on the economy.
The media giant announced the moves Wednesday in a press release, saying it is taking steps to navigate the financial disruption from COVID-19, which has led clients to reduce their spending on advertising and events.
“We have worked swiftly and diligently over the past month to support the health and safety of our employees and to preserve our ability to deliver high quality journalism to the communities we serve,” Gannett CEO and Chairman Michael Reed said in a statement. “While business performance started the year strong, we now expect our revenues to be significantly impacted by the COVID-19 pandemic. Therefore, we have taken several measures designed to mitigate the impact on our operating performance and to strengthen the Company’s balance sheet and liquidity position.”
The company said its board of directors is committed to reinstituting a quarterly dividend when it is appropriate to do so.
With much of the country prohibited from leaving their homes for non-essential reasons, many businesses that rely on consumer spending and advertise their services are suffering. For example, the health crisis has brought seated restaurant dining to a standstill and led to a 98% drop in retail foot traffic in the fourth week of March, compared with the same period in 2019, according to Cowen retail analysts.
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Gannett said it plans to implement $100 million to $125 million in cost cuts in addition to previously planned reductions tied to the merger of New Media Investment Group and the “old” Gannett, which formed the “new” Gannett when the deal was closed in November.
The fresh round of cuts include furloughs, job cuts, pay cuts for senior managers and the cancellation of non-essential travel and spending. Many other news outlets have reportedly taken similar steps in recent weeks.
Gannett’s daily publications include the Arizona Republic, Detroit Free Press, Columbus Dispatch, Austin American-Statesman and Milwaukee Journal Sentinel and hundreds of daily and weekly news properties. It also provides marketing services to business clients.
The company said it has also delayed capital expenditures and is “working diligently with vendors, creditors and pension regulators to restructure or postpone certain obligations.”
Reed added that the moves “are essential to protect the company during this challenging time.”
The company is proceeding with its previous roadmap to shed overlapping costs stemming from its merger, with plans to cut $300 million in annual costs by the end of $300 million. More than half of that will be in place in 2020.
Gannett also plans to continue selling key real estate totaling $100 million to $125 million by the end of 2021.
As the coronavirus crisis continues, many Americans are working from home, and that includes about 95% of Gannett employees who don’t work in production or delivery. Production and delivery workers are following social distancing measures, the company said.
The company has also launched new features designed to provide comprehensive information on the coronavirus to the public and to aid small businesses. USA TODAY launched “Nations Health,” a daily section on the crisis that is being published in print and is providing updates online. The company also has accumulated nearly 145,000 subscribers to a free coronavirus newsletter.
Despite the economic challenges, USA TODAY alone has recorded more than 400 million views of its coronavirus content in the last 45 days, the company said.
Gannett also launched “Support Local,” which provides free business listings to local businesses and enables visitors to buy gift cards and support the businesses in other ways.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.