Economic
Gannett’s 5-year raw beta suggests that their company is very sensitive to a shift in the economy or the S&P 500 market. Their beta of 1.879 suggests that a 1 percent rise in the markets return would result in a 1.879 percent rise in Gannett’s stock. On the flip side however if the market goes down 1 percent then Gannett will fall about 1.879 percent. Overall, Gannett’s raw beta tells us that it is nearly twice as volatile as the market.
Industry Analysis
Current rating
5 year rating
Buyer Power
1
1
Supplier Power
3
3
Threat of new entrants
4
4
Rivalry
2
1
Substitute
2
1
Overall
2.8
2.5
Gannett Spread
6.79%
5%
Gannett is a very diverse company that is currently working in all types of media. Gannett company owns several different types of media outlets, but the main industry it competes in is the newspaper publishing business. Publishing over 90 weekly newspapers and 1000 daily papers, they are the largest newspaper publishing firm by numbers. The newspaper publishing industry is not a very favorable one in these times. Throughout the 21st century it has become a tough industry to be in and its performance is likely to decrease in the coming 5 years. The buyer power is huge in this because it is up to the buyer to keep physical news sources such as magazines and newspapers afloat. With Internet news sources trending quickly upwards, within 5 years physical news sources could be a thing of the past. Supplier power is neutral because paper and ink supply is pretty much irrelevant to the performance of the industry. There will always be places supplying that at a favorable price. The threat of new entrants at this point is something making this industry slightly more favorable. It is hard to enter because it takes serious time and to build a solid base of followers for your news source. If you already have a well established following the threat of new comers will not be an issue. Rivalry in this industry is very intense with every paper and magazine fighting for bigger followings with better exposure. Advertising is what drives news and with so many options, these news sources must have the best exposure to get companies to pay top dollar for advertising. Physical news sources must also compete with Internet, which has easier exposure for advertising and more innovative ways to advertise. Substitutes make the newspaper industry the most unattractive out of all of it. With so many different ways to obtain the news now it makes this industry very difficult to compete in with its future looking grim.
The buyer will continue to determine the future of the newspaper industry. If the buyer completely shifts its preference from physical news to e news it could put newspapers and magazines out of business. 5 years down the road buyer power will be just as important. Supplier power will still be irrelevant with the same companies supplying favorable prices to the top newspaper publishing companies. Threat of entry will continue to make the newspaper business favorable. There will still be little chance of a new competitor to pop up that isn’t already established in this business. In an industry like this it is nearly impossible to establish a firm footing in a matter of a few years. It takes serious time and effort to do so. Over the next five years however I believe that rivalry
