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ROUNDTABLE 2016: LOW

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Game-changing strategy at the Utah Media Group

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ROUNDTABLE 2016: LOW

  1. 1. “GAME-CHANGING” STRATEGY
  2. 2. HISTORY OF NEWSPAPER STRATEGY • 1996 Clustering • 1998 Increasing classified font size • 1999 Doubling the recruitment rate • 2001 Cutting expenses • 2003 Allocating revenue & OP to “digital” • 2007 Developing a separate online team • 2008 Selling third party brands • 2009 Reducing headcount in all areas • 2010 Reducing web width (size of newspaper) • 2011 Consolidating functions • 2012 Pricing Subscriptions discriminately • 2013 Separating print and broadcast (publics) • 2014 Charging subscribers for “special” editions 2
  3. 3. SUMMARY OF “STRATEGIES” • REACTING • RETRENCHING • REPURPOSING • DRAMATICALLY INCREASING PRICES • AGGRESSIVELY CUTTING EXPENSES • USING EXISTING STAFF AND CONCEPTS TO DEVELOP NEW BUSINESS • DESPERATION PHASE 3
  4. 4. NEWSPAPER CHALLENGES 4 August 11, 2016 “Macy’s will close ANOTHER 100 stores” 2006 2015 Change Advertising 5,370 1,611 (70%) Circulation 1,307 1,060 (19%) Other 502 213 (57%) Revenue 7,179 2,885 (60%) Operating Profit 1,627 169 (90%) Margin 23% 6% Gannett Newspapers Comparison (In Millions)
  5. 5. NEWSPAPER CHALLENGES 5 **New York Times August 18, 2016
  6. 6. THE “HIGHLY VISIBLE” FIXERS RIP • JOHN PAYTON RIP • SAM ZELL RIP • AARON KUSHNER RIP NEWBIES • SHELDON ADELSON • JEFF BEZOS • MICHAEL FERRO 6
  7. 7. THE “HIGHLY VISIBLE” INVESTOR 2012 LETTER TO SHAREHOLDERS • ACQUIRED 28 DAILIES FOR $344 MILLION • “NEWSPAPERS CONTINUE TO REIGN SUPREME” • “PAPERS…WILL REMAIN VIABLE FOR A LONG TIME” 2016 USA TODAY 7
  8. 8. TODAY’S NEWSPAPER STRATEGY • DEVELOP A HIP NAME FOR THE DIGITAL BUSINESS • ACQUIRE OTHER (DECLINING) NEWSPAPERS • TRIPLE PLAY • CUT THE NEWSROOM • CUT THE NEWSHOLE • INCREASE SUBSCRIPTION PRICING (DRAMATICALLY) • GRAND SLAM (ADD ONE MORE…) • REDUCE ALL SERVICES 8
  9. 9. STRATEGY IMPACTED OUTCOME 9 GCI UMG Advertising (70%) (69%) Circulation (19%) (18%) Other (57%) 1207% Revenue (60%) (38%) Operating Profit (90%) (66%) Margin (74%) (46%) Declines 2006 to 2015 Gannett vs Utah Media Group **GCI per annual reports for the newspaper segment, only.
  10. 10. UTAH MEDIA GROUP STRATEGY • VISION “EVERY MIND, EVERY TIME” • MISSIONS 1. CONNECT WITH THE AUDIENCE VIA THE MOST EFFECTIVE CHANNELS 2. DEVELOP NEW BUSINESSES 3. IMPROVE SALES EFFECTIVENESS 4. CONTINUOUSLY IMPROVE ALL OPERATIONS 10
  11. 11. UTAH MEDIA GROUP BUSINESS MIX 11 22% 16% 23% 40% 15% **Magazines, Agency and Events compete outside the newspaper market.
  12. 12. PATH TO SUCCESS - EVENTS 12 • 1st idea – partner with Governor on an economic summit • Reallocate budget to support a dedicated events team independent from the newspaper business
  13. 13. PATH TO SUCCESS - EVENTS • RESULTS OF INITIAL “PARTNER” EVENT • LAUNCH OF EVENT PRODUCTION BUSINESS • WE PRODUCE MORE THAN 30 EVENTS, ANNUALLY • LAUNCH OF EVENT SERVICES BUSINESS • REGISTRATION SERVICES • VENDOR/FLOOR MANAGEMENT SERVICES • EVENT SALES MANAGEMENT SERVICES • TICKETING SERVICES 13
  14. 14. PATH TO SUCCESS - TICKETING CONSUMER EVENT TIED TO GAMING AND COMIC CONVENTIONS • 2010 GEEX – GAMING AND ELECTRONICS EXPO • THREE YEAR RUN PROFITABLE ON LAST TWO EVENTS • VENDOR IDEA TO GO BIGGER • TRANSITIONED INTO SUPPORT ROLE • FREED US UP TO FOCUS ON KEY SERVICES • PROFITS SOARED 14
  15. 15. PATH TO SUCCESS - TICKETING 15 • Two years in business. • 692 events ticketed • $34 million processed • Largest event $193K • International ticketing business • Event fulfillment services • Event security services
  16. 16. UTAH MEDIA GROUP STRUCTURE 16 General Mgr General Mgr General Mgr General Mgr SVP SVP SVP SVP VP Broker Consumer Consumer Business Ticketing Agency CFO Newspaper Newspaper Newspaper Real Estate Magazines Events Events & Magazines Operations Sales Digital Sales
  17. 17. New Business PATH TO SUCCESS 17 Agenc y (R&D) Launch New Businesses Launch New Services Shoot Bullets Test Fulfillment
  18. 18. SUMMARY • STRATEGY – One that changes the outcome in the long-term (game-changing) • STRUCTURE – One that supports progressive independent businesses outside of the newspaper and supports ongoing development and growth of new businesses • PEOPLE – Must find and retain talented people with a modern skill set and ability to multitask NO newspaper people driving the new businesses Must compensate business unit leaders well when successful—objective & tied to results • PERFORMANCE – Measure and report and adjust variables noted above, to meet vision 18
  19. 19. • Must have the right leadership/ownership in order to get the right STRATEGY and STRUCTURE • Must have the right PEOPLE to properly execute and get results/PERFORMANCE SUMMARY (MORE SUMMARIZED) 19
  20. 20. A THOUGHT “GREATNESS IS NOT WHERE WE STAND, RATHER IN THE DIRECTION WE ARE MOVING. WE MUST SAIL, SOMETIMES WITH THE WIND AND SOMETIMES AGAINST IT. BUT SAIL WE MUST AND NOT DRIFT NOR LIE AT ANCHOR.” *Oliver Wendell Holmes 20
  21. 21. ONE MORE THOUGHT “FAR BETTER IT IS TO DARE MIGHTY THINGS, TO WIN GLORIOUS TRIUMPHS, EVEN THOUGH CHECKERED WITH FAILURE THAN TO TAKE RANK WITH THOSE POOR SPIRITS WHO NEITHER ENJOY MUCH NOR SUFFER MUCH BECAUSE THEY LIVE IN THE GRAY TWILIGHT THAT KNOWS NO VICTORY NOR DEFEAT.”* Theodore Roosevelt 21
  22. 22. FINAL THOUGHT 22 What % of short putts go in the hole?

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