News Corporation's (Nasdaq:NWS) MarketWatch site announced July 10 that its top editor, David Callaway, was leaving the company after 13 years to go work with Larry Kramer, his old boss at MarketWatch and now USA Today Publisher. Callaway becomes editor-in-chief and will be responsible for all news content across all platforms. The national daily newspaper appears to be signaling a serious move towards more business coverage. I'll look at what it means for Gannett (NYSE:GCI) investors.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers

David Callaway
Callaway's entire career has been spent covering business and the markets. Kramer said this about Callaway in USA Today's press release announcing the hiring: "His expertise in both new and traditional media will be a tremendous asset as we transform our iconic brand into one that delivers unique content in new and creative ways." It would seem that Kramer is looking to recreate the magic they had working together when MarketWatch was still in its infancy. Since then, of course, CBS (NYSE:CBS) sold it to Dow Jones in 2005 for over $500 million and then Rupert Murdoch acquired Dow Jones in 2007 for $5.6 billion. After working in a more entrepreneurial environment for the first few years of his time at MarketWatch, it's amazing that Callaway stuck around for almost five years. Joining USA Today as it struggles for readership, is probably his biggest challenge to date.

SEE: The Wonderful World Of Mergers

Larry Kramer
Kramer's background in journalism goes back to 1974 when he was a reporter with the San Francisco Examiner. Moving up the ranks over the years, he ran CBS' digital media properties after selling MarketWatch, which he founded with CBS and Data Broadcasting in 1995. When hired by Gannett in May, it was clear business as usual went out the window. Kramer wants writers who can do more than fill a page; he's looking for people who can provide a coherent opinion on the news that's taking place locally, nationally or globally and not just a synopsis. That means if you want to work for USA Today, you better be able to use social media, do on-the-ground investigative reporting and have a personality. I can remember loving USA Today when I was attending university back in the mid-1980s. No one provided the kind of broad coverage they did in such an attractive format. Unfortunately, in hindsight, we found out that formats change. USA Today didn't and that's why Callaway is following closely behind Kramer. The newsroom needs a serious upgrade.

Future
Gannett shareholders have to be holding their breath on these hires. On the one hand, they've seen so many come and go it's hard to imagine anyone being able to create a winning culture at USA Today. However, both of these men have accomplished much in their careers and wouldn't be doing this without a strong belief in the brand itself. Ultimately, Kramer sees the paper's role not so much as pushing information to the end-user reader but rather to meet the reader's informational needs wherever and whatever they are. Callaway's job will be to put the pieces in place to be able to run a customer-oriented digital enterprise that also happens to have a print edition. Currently, digital revenues at Gannett account for approximately 22% of its overall operating revenue. In the first quarter, its digital revenues increased 8% to $273 million while USA Today's digital revenues rose 25% year over year. Gannett's U.S. Community Publishing segment has a paid content model which subscribers can access from multiple platforms that will generate as much as $100 million in earnings in 2013. USA Today will obviously look to introduce something similar but with Kramer less than two months into the job, it's not something on the immediate horizon.

SEE: Analyzing Operating Margins

The Bottom Line
Gannett's digital and broadcasting segments are very profitable and thus its business isn't in imminent danger of a financial collapse. Kramer's hiring sounds like an admission by Gannett management that its publishing business, including USA Today, needs a more entrepreneurial approach in order to be successful. Frankly, the board should make Kramer CEO and Callaway publisher. Of course, Gannett's never been accused of forward thinking. At the end of the day, it's a smart move only if Kramer's given the freedom to operate. Callaway's hiring seems to be a green light.

At the time of writing, Will Ashworth did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  2. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  3. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  4. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  7. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  8. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  9. Mutual Funds & ETFs

    ETF Analysis: Vanguard Mid-Cap Value

    Take an in-depth look at the Vanguard Mid-Cap Value ETF, one of the largest and most popular mid-cap funds in the U.S. equity space.
  10. Mutual Funds & ETFs

    ETF Analysis: Schwab US Broad Market

    Take an in-depth look at the Schwab U.S. Broad Market ETF, an incredibly low-cost fund based on a wide selection of the U.S. equity market.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
  5. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
  6. BHD (Berhad)

    The suffix Bhd. is an abbreviation of a Malay word "berhad," ...
RELATED FAQS
  1. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  4. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  5. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
  6. What happens to the shares of stock purchased in a tender offer?

    The shares of stock purchased in a tender offer become the property of the purchaser. From that point forward, the purchaser, ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!