There's yet more news of trouble in the publishing business. This morning Gannett reported a 36 percent drop in second-quarter earnings on 10 percent lower ad revenues at its newspapers including USA Today.
The company is also recording a pre-tax charge of between $2.6 and $2.9 billion on goodwill impairment and other intangibles. Goodwill impairment indeed. GCI stock is trading down on this news.
Meanwhile the newspaper industry's problems are forcing bitter rivals, the New York Post and the Daily News, to talk about (gasp) collaboration. The Post, owned by Rupert Murdoch's News Corp , has been losing about $50 million annually. Meanwhile the Daily News, owned by Mortimer Zuckerman, has been breaking even. The idea would be to combine all of the paper's business functions, like home delivery and production, to save millions in annual costs, while keeping newsrooms separate and continuing to operate separate companies.
The talks were sparked by both papers' $580 million bid for the Tribune Company's Newsday. When neither the Post or the News could offer the $650 million Newday was looking for, the two bidders turned and looked to each other. This isn't the first deal Murdoch has pursued to stem the Post's losses. The Post and the Daily News talked about potential collaborations, and more recently the Post and Newsday talked about ways the two could work together to cut costs.
Will it happen? One issue is deciding which printing press would be used. And there will certainly be concerns about anticompetitive practices. And will see whether these two rivals can overcome their past antagonism of each other to make the money saving deal happen.
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