2 years ago: #OccupyTheNewsroom

October 24, 2011, here on slacktivist: #OccupyTheNewsroom

Peter Lewis on my former employer, Gannett, and it’s quest to destroy the newspaper business:

When Dubow took over as CEO, Gannett employed some 52,000 people in its publishing, broadcast, digital and mobile divisions. When he resigned last week, it employed 32,000 people. Among the 20,000 jobs that were cut were thousands of talented journalists. Mr. Dubow also required many employees to take unpaid leaves of absence, and instituted pay freezes. He referred to this as “increasing workplace efficiencies.”

When Dubow took over as CEO, Gannett’s stock price was $72-something a share. At his departure last week it was $10-something, down 85 percent in his tenure.

Last year, while laying off more journalists, Gannett increased Mr. Dubow’s 2010 pay package to $7.9 million. Including the estimated future value of stock awards and options, his 2010 pay package could increase to $9.4 million. Gannett said the raise was meant to reward Mr. Dubow for boosting the publisher’s earnings — remember, the emphasis is always on the net — for the fourth consecutive year.

Mr. Dubow managed to keep earnings high, according to analysts, by cutting costs (i.e. people) more aggressively than any other company in the media industry. Gannett refers to this as “workplace restructuring.”

… “Craig championed our consumers and their ever-changing needs for news and information,” said Marjorie Magner, non-executive chairman of Gannett’s board of directors.

Gracia Martore, who replaces Dubow as CEO, said: “We will continue our relentless quest to provide trusted news and information and will actively support the people and businesses in the communities we serve.”

These people are lying. The corporate goal is not to serve the consumer; it’s to maximize profits and pay packages for top executives. Can anyone argue that Gannett newspapers and journalism are better today, and that news consumers are better served?

How did Mr. Dubow and Gannett serve the consumer? They laid off journalists. They cut the pay of those who remained, while demanding that they work longer hours. They closed news bureaus. They slashed newsroom budgets. As revenue fell, and stock prices tanked, and product quality deteriorated, they rewarded themselves huge pay raises and bonuses.

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  • Amtep

    Some day I’d like to know what really goes on in those board meetings. After all, the board represents the stockholders, and what reason would the stockholders have to let the CEO take so much of their money?

    My best guess is that it’s a kind of backscratching network, where CEO’s all sit on each other’s boards and give each other huge pay packages. But that doesn’t explain why this happens so consistently.

  • BaseDeltaZero

    My best guess is that it’s a kind of backscratching network, where CEO’s all sit on each other’s boards and give each other huge pay packages.

    Yeah, that’s pretty much exactly it. Combine that with the fact that the majority of the stock is owned by CEOs (mutual funds are probably the dominant portion, but they’re *controlled* by CEOs…), and you pretty much start to get the idea…

  • TheBrett

    The guy sounds like the living incarnation of every negative aspect of the Modern American CEO. He jacks up the earnings and the stocks in the relatively short run, boosting his own compensation and making the shareholders absolutely love him, at the expense of the company in the long run when he wrecks any sort of morale or espirit de corps along with the company brand. Not that that will be a problem for him, since he’ll be out the door soon anyways.

    The only thing that could have made it even more fitting would be if he leveraged the hell out of the company in the process, like what Sam Zell did with the Tribune Company when he bought it.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    “Interlocking directorships” creating an Old-Boys-Network has been noted as A Problem since the 1990s. It’s just that in those days it was excused and overlooked as a necessary part of the “New Capitalism” we all had to go along with and anyone who complained was just a hoary old Commie who hadn’t gotten the memo yet.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    And yet, shockingly, accidentally bad CEOship is disturbingly common.

  • SkyknightXi

    …Great. Stealth monopoly. Perhaps one should consider amending the anti-trust acts so that no CEO can be on the board of another company.

    Meanwhile, is there a reason why employees aren’t considered to be stockholders? They invest their effort, their wages come from the businesses’ coffers…It doesn’t strike me as THAT different from buying and selling Wall Street stocks.

  • BaseDeltaZero

    Because they don’t own stocks. There are some companies, though, like Publix (IIRC) that include stock shares as part of their employee compensation. In fact, Publix stock cannot be owned by anyone *except* employees…