CINCINNATI (TDB) -- The Cincinnati Enquirer has been writing a lot lately about Fifth Third Bank and its problems in a difficult business environment caused by a slow-growth economy. But the Gannett-owned newspaper has been largely silent about the near 50% plunge in its own parent company's stock price over the past year (see table). According to the chart, Gannett has done worse than its peers in the media industry, and worse than the S&P 500. None of that has been widely reported by The Enquirer, a major source of news and information in Ohio -- both online and in print. And the steep reversal in Gannett's value on Wall Street since last June is an indication that the company's business practices and business model are out of step with reality in the 2008 economy -- that it hasn't yet figured out how to compete, grow, or rally when faced with adversity. The Ohioans who depend on the company for news and information and entertainment may find themselves left in the lurch if there are cuts. John Friedman at MarketWatch, a financial news service that operates online and serves the nation's investment community, noted in commentary Thursday that Gannett and the New York Times, another newspaper giant, are both headed down, down, down:
"Meanwhile, Gannett, the publisher of USA Today [along with more than 80 other dailies, including Cincy], said its May ad revenue had dropped 14% from a year ago. Its classified ad figure fell 19% for the month, underscoring the impact of online services."
A link to Friedman's commentary is here, and its speculates the New York Times could become a takeover target as its share price falls. Gannett stock traded for a time at $91 a share in 2004, but was around $24 when the Bellwether checked today around noontime. At that price, the yield on the dividend is near 6.55%, which is better than any bank savings account pays. But how long will it be before the dividend is cut? And how long will it be before Gannett considers selling off its newspaper holdings like the Cincinnati Enquirer?