Gannett turns profit — good news, right?

15 07 2009

My excitement at the headline re Gannett earnings was shortlived once I got a little way into the Business Journal article.

Gannett got into the black through cost-cutting, but ad revenues are still down. This is more like the start of a death spiral. Advertisers turn away, causing you to cut resources, which leads to a lower quality product, which causes more advertisers to turn away.

Cost cutting — failing to renew contracts for your major talent and laying off news  staff — may allow you to show an earnings gain for the quarter, but they are no way to salvation. Sooner or later, you’ve got to give the viewers/readers and advertisers a reason to want the product.

At least in St. Louis, there seems to be a future for the Gannett cast-offs. Following Karen Foss’ footsteps, Deanne Lane and Rebecca Wu have both recently taken PR jobs in the city — Lane for Centene and Wu for the regional FBI. Good for them, but it makes one wish that St. Louis companies saw PR as more than putting a pretty face on things.

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