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No word yet that Gannett (NYSE: GCI) is reconsidering its $1.60 dividend but it’s certainly trying everything else. The latest: a post-market threat Friday that it will close the Tucson Citizen on March 21 if it can’t sell the afternoon paper. The Citizen is published Monday-Saturday as part of a joint operating agreement (JOA) with Lee Enterprises (NYSE: LEE), which owns the Arizona Daily Star and ostensibly would stand to gain from the afternoon paper’s closing. (Lee has its own problems.) The JOA company TNI Partners handles distribution, production, ad sales, and other back office operations for both papers.
Earlier this week, Gannett announced a week-long furlough without pay for its non-union employees during Q1 and a pay freeze for flagship USA Today. As for that $1.60 dividend, David Sterman suggests: “To build confidence in the solidity of its balance sheet, Gannett should radically slash its $1.60 annual dividend, which offers an absurd 20 percent yield. By cutting the dividend in half, the company could still offer a robust 10 percent dividend yield and save $180 million each year.”
Full disclosure: Staci D. Kramer’s household has been directly affected by Lee Enterprises’ financial issues.