Media Week Presentations in Review: 'Hard to Get Excited'

By: Jennifer Saba The mood was anything but festive during yesterday's CSFB Media Week Conference at The Plaza Hotel in New York. Most executives took a page from The Washington Post Co.'s play book and did the financial equivalent of pleading the Fifth: They would not give estimates on 2005, saying that that there was "no visibility."

With their periscopes packed away, the tone was cautious. A Merrill Lynch report by analyst Lauren Rich Fine used the following headings: "Hard to Get Excited," "The Outlook is Muted," and "Circulation Woes Continue."

Douglas McCorkindale, chairman, president, and CEO of Gannett, said he expects 2005 to be much like 2004: volatile. As a way of providing general guidance, McCorkindale ventured that overall ad revenue for newspapers (excluding USA Today) may not climb out of the mid-single digits. He further noted that the company has some tough comparisons ahead.

Unlike at the last conference, Gannett addressed circulation. During the summer mid-year review conference, McCorkindale said that the circulation scandals were blown out proportion by the media. This time around, Gary Watson, president of publishing, reassured the audience that Gannett had completed circulation reviews and found no signs or issues that would impact publishers statements.

Not including USA Today, the company's daily circ was down 1.7% and its Sunday circ was down 2.2%. Watson said that the biggest challenge was to replace telemarketing, which accounted for roughly 33% of its circulation.

Another interesting point, brought up in a the Merrill Lynch report on the Gannett presentation, noted that Gannett has engaged in a recruitment firm to find a successor to McCorkindale, who is set to retire in 2006. "As management strength has been a hallmark for Gannett and there is no obvious internal successor, the search is of major interest to us," the report said.

As a wrap-up on the conference in regard to circulation, the Fine report said, "When discussing circulation, there were clearly the 'haves' and 'have nots'. Those that have been successful smugly indicated they would do what they have always done, which is to deliver content that their readers want. The 'have nots' seemed preoccupied with the notion that circulation had been under pressure for some time but that they could approach it smarter."

Companies expressed a commitment to cut back on "other paid" circ and concentrate on home delivery and single copy sales.

Another trend at the conference was watching executives act coy about the potential of any acquisitions (read: Pulitzer).

Tribune Co.'s Dennis FitzSimons told investors that his company was going to focus on getting stock prices back at a premium. "We're not looking aggressively at acquisitions," he said.

Gary Pruitt of McClatchy danced around that question, saying that acquisitions are always a possibility as long as they fit in with the company's growth strategy. "It's not like we are going to let money burn a hole in our pocket," Pruitt said, adding that the company is going to be "really picky." He even tossed out the possibility of buying back stock, "something we've never done before."