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Gannett to Take up to $5.9 Billion Write-Down

Gannett reported a 36% drop in Q4 earnings on Friday; the company, being buffetted by the recession in the U.S. and U.K., said it will write down the value of its newspapers by as much as $5.9 billion.

Gannett advertising revenue plummeted 23% in the fourth quarter, including a 19% drop at USA Today. Total net revenue fell 8.5% to $1.74 billion. Analysts were expecting revenue of $1.79 billion, per Thomson Reuters.

Benchmark Co. analyst Edward Atorino said the write-down is a reflection of accounting charges that are taking place across the media industry; companies are being forced to realize that their publishing and television assets are worth less than they had thought, reports the Wall Street Journal.

Gannett announced two weeks ago that it will force workers to take one week of unpaid leave during the quarter. The company is also reportedly cutting 10% of its workforce (on top of the 3% it cut in August), has cut back home delivery for the Detroit Free Press, and plans to sell or close the Tucson Citizen. Job cuts in 2009 could range from a mid-single-digit percentage decline at USA Today to a mid-teen percentage drop at the company’s U.K. operations. Gannett also plans to cut capital spending by as much as 15% this year.

Shares of Gannett fell as much as 12.5% on Monday following the news, and following Standard & Poor’s downgrading of the newspaper publisher’s debt rating to junk, writes Reuters.