USA TODAY owner posts 3Q profit

Written by on December 6, 2021

Gannett, the proprietor of USA TODAY, posted a second straight quarterly revenue as the corporate’s digital subscription technique gained momentum.

The media firm, which additionally owns greater than 200 different each day publications in addition to a number of hundred weeklies, reported web earnings of $15 million for the interval ended Sept. 30.

The earnings report got here after Gannett within the second quarter posted its first revenue because the 2019 merger of New Media Funding Group and the corporate previously often known as Gannett.

Within the third quarter of 2021, Gannett recorded whole income of $800.2 million, down 1.8% from a yr earlier. On a comparable foundation – a determine representing persevering with operations – income rose 0.9%.

Gannett’s inventory was down 5.7% to $5.94 at 10:13 a.m.

Gannett has been grappling with the industry-wide problem of declining print income for years however has been not too long ago growing its paid digital subscriptions.

Digital subscriptions, that are considered as essential to making a path for development, rose 46% to greater than 1.5 million on the finish of the third quarter. That led to a 26.6% soar in digital-only circulation income to $25.7 million.

Gannett Chairman and CEO Michael Reed stated in January that the corporate had set a purpose of securing 10 million digital subscriptions inside 5 years. That focus on consists of subscriptions from USA TODAY, which launched paid digital entry for premium content material earlier this yr.

Gannett expects to complete 2021 with greater than 1.65 million digital subscriptions, Reed stated on the corporate’s earnings name with buyers and analysts. That might replicate development of greater than 50% in contrast with 2020.

Reed was requested about introductory provides – whether or not there are issues about subscriber retention after these expire – and he stated the corporate is proud of what it’s seeing, with retention round 70-75%.

For the third quarter, adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) totaled $102 million, up 16% from a yr earlier.

On a comparable foundation, circulation income fell 8.2%, whereas promoting and advertising and marketing providers income rose 5%. Digital gross sales totaled $265 million, up 17.8%.

“9 months in the past, we outlined a long-term imaginative and prescient for development at Gannett. Whereas we’re nonetheless in early levels, the sturdy development in digital-only circulation and digital advertising and marketing options confirms we’re on the correct path,” Reed stated in a press release.

In the meantime, Gannett may very well be poised to profit from a motion in Congress to spice up native information organizations with payroll tax credit for using journalists. If the Native Journalism Sustainability Act is accepted by Congress and signed into legislation by President Joe Biden because it at present stands, the employment tax credit can be price $30 million to $35 million for Gannett, Reed stated.

You possibly can comply with USA TODAY reporter Nathan Bomey on Twitter @NathanBomey and subscribe to our free Every day Cash publication right here for private finance ideas and enterprise information each Monday by Friday morning.

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