MNG Urges Gannett Shareholders to Vote for Change

Sends Letter to Gannett Shareholders Soliciting Votes on the BLUE Proxy Card for ALL THREE MNG Nominees: Heath Freeman, Dana Needleman, Steven Rossi

Reaffirms That MNG Nominees Will Serve as Immediate Catalyst for Change; Seek to Maximize Value for All Gannett Shareholders; Support A Full Review of Strategic Alternatives

Believes Only Chance to Increase Gannett’s Stock Price is by Electing ALL THREE MNG Nominees to the Board

DENVER--()--MNG Enterprises, Inc. (“MNG”), owner and operator of one of the largest newspaper businesses in the U.S. and the largest active shareholder in Gannett Co., Inc. (NYSE:GCI) (“Gannett” or the “Company”), with an approximate 7.4% ownership interest, has mailed a letter to its fellow Gannett shareholders, urging them to vote on the BLUE Proxy card for MNG’s three highly qualified director nominees.

MNG believes that the election of ALL THREE of MNG’s nominees is needed to send a clear message to the incumbent directors that the status quo is not acceptable, and the Board needs to explore all possible ways to enhance value for all Gannett shareholders.

The full text of the letter, which outlines the need for change at Gannett, follows.

May 8, 2019

Dear Fellow Gannett Shareholders:



The annual meeting of shareholders of Gannett Co., Inc. (“Gannett” or the “Company”) to be held on May 16, 2019 offers you a clear choice: either endorse the Company’s current board of directors (the “Board”) and Gannett’s status quo, with its prolonged underperformance since its 2015 spin-off and its risky, unproven and unprofitable “digital transformation”,1 OR vote on the BLUE Proxy card for ALL THREE of MNG’s highly qualified director nominees who will serve as an immediate catalyst for change to maximize value for all Gannett shareholders, including by supporting a full review of strategic alternatives.

The choice is clear:


  • Support immediately commencing a full review of strategic alternatives to maximize value for all shareholders
  • MNG’s premium $12/share cash offer to acquire Gannett
  • All other offers duly considered
  • New perspective on running core business profitably and sustainably
  • Moratorium on overpriced and value-destructive digital acquisitions


  • Core business in decline
  • Continuing underperformance in Q1 with no end in sight – additional declines projected for 2019
  • Failure to adequately explore premium cash acquisition offer
  • Risky, unproven and unprofitable “digital transformation” strategy
  • Leadership void: no CEO and departure of the head of ReachLocal in early 2019
  • Increased leverage since 2015 spin-off 2



Gannett’s most recent earnings announcement confirms what MNG has been saying all along – that Gannett is an underperformer and its multi-year “digital transformation” is not working and extremely unlikely to produce a $12 per share valuation. Gannett’s key performance metrics have continued to worsen and the Company’s performance since its 2015 spin-off looks even worse given Gannett’s first quarter 2019 results. This includes:

  • Net Income is down 98% since spin-off;3
  • Diluted Earnings Per Share is down 98% since spin-off;3
  • Operating Income is down 90% since spin-off;3 and
  • Free Cash Flow is down 66% since spin-off.3

Gannett’s supposed panacea – its “digital transformation” – is highly risky and, in the words of Institutional Shareholder Services, Inc. (“ISS”), “yet to bear fruit.” As ISS stated in its report: 4

Moreover, it is worth noting that GCI's digital transformation has yet to bear fruit, as evidenced by the fact that ReachLocal has had operating expenses in excess of revenue every year since FY2016, while the publishing segment's operating income and operating margin have declined since 2016 (despite digital sources accounting for a larger proportion of the segment's revenue mix) – these factors, along with the earnings and revenue miss in February, suggest that there is execution risk inherent in the standalone plan.” (emphasis added).4

We believe Gannett is acting like a 1990s internet company, touting clicks, eyeballs and selling cheap digital subscriptions instead of focusing on what truly drives value – profitability. We believe there is little reason to believe that Gannett’s digital transformation strategy will turn things around at Gannett, or that Gannett has the leadership team in place to execute that strategy. Starting May 7th, Gannett is without a CEO and is run by a newly appointed interim COO with a predominantly legal (rather than operational) background.

Gannett’s struggles were chronicled just days ago in The Wall Street Journal,5 which wrote:

Local papers have suffered sharper declines in circulation than national outlets and greater incursions into their online advertising businesses from tech giants such as Alphabet Inc.’s Google and Facebook Inc. The data also shows that they are having a much more difficult time converting readers into paying digital customers… Gannett, which has a big audience across its local papers, is especially inefficient, converting just 0.4% of its digital audience into paying subscribers, according to the Journal’s analysis of digital audience and subscription data.” (emphasis added).5


We appreciate that leading shareholder advisory firm ISS has recognized the need for change at Gannett. But to truly bring about change, it is imperative that shareholders vote the BLUE card for ALL THREE of MNG’s nominees – Heath Freeman, Dana Needleman and Steven Rossi. The election of ALL THREE of MNG’s nominees is needed to send a clear message to the incumbent directors that the status quo is not acceptable, and the Board needs to explore all possible ways to enhance value for all Gannett shareholders. Without the election of ALL THREE of MNG’s nominees, the incumbent directors may continue to resist any change to the Company’s current strategy, despite severe declines in profitability and value destruction since Gannett’s 2015 spin-off.


MNG’s nominees will be strong advocates for change and have the right mix of newspaper turnaround, real estate, and capital allocation expertise to improve the Gannett Board; would provide the objective perspective, experience and oversight required to put Gannett on the path to a profitable and sustainable future; and are committed to maximizing value for all Gannett shareholders now before further value is destroyed.

MNG’s nominees are committed to listening to all Gannett shareholders and exploring all possible ways to enhance value at Gannett. As seen by MNG’s switch to a minority slate that was based on feedback from other Gannett shareholders who wanted meaningful Board change but also wanted to preserve continuity at the Board, MNG and its nominees embrace and respect the views of all Gannett shareholders. Our sole focus is to maximize value for all shareholders, and if elected, our three nominees will aim to serve as a true shareholder voice on the Gannett Board.


/s/ R. Joseph Fuchs
On behalf of the Board of Directors, MNG Enterprises, Inc.
Chairman, R. Joseph Fuchs

Okapi Partners LLC is assisting us with the solicitation of proxies. If you have any questions or require assistance in authorizing a proxy or voting your shares of Common Stock, please contact:

Okapi Partners LLC
1212 Avenue of the Americas, 24th Floor
New York, New York 10036

(212) 297-0720 (Main)
Stockholders Call Toll-Free: (888) 785-6668

We encourage all shareholders to carefully review this letter to understand more about why change is needed now and why MNG’s nominees are best positioned to Save Gannett. Additional information about MNG, its proposal to acquire Gannett, and its nominees is available at We urge all shareholders to VOTE THE BLUE CARD “FOR” MNG’s independent slate of Director Nominees.

Your vote is important, no matter how many shares you own!

Please remember NOT TO RETURN the Company’s WHITE PROXY CARD! If you return a Gannett proxy card – even by simply indicating “withhold” on the Company’s slate – you will revoke any vote you had previously submitted for the MNG nominees on the BLUE proxy card.

Moelis & Company LLC is acting as financial advisor to MNG. Akin Gump Strauss Hauer & Feld LLP and Olshan Frome Wolosky LLP are serving as its legal counsel. Okapi Partners LLC is acting as MNG’s proxy solicitor.

About MNG Enterprises

MNG Enterprises, Inc. is one of the largest owners and operators of newspapers in the United States by circulation, with approximately 200 publications including The Denver Post, The Mercury News, The Orange County Register and The Boston Herald. MNG is a leader in local, multi-platform news and information, distinguished by its award-winning original content and high quality, diversified portfolio of both print and local news and information web sites and mobile apps offering rich multimedia experiences across the nation. For more information, please visit

Additional Information

MNG Enterprises, Inc., together with the other participants in its proxy solicitation (collectively, “MNG”), have filed a definitive proxy statement and an accompanying BLUE proxy card with the Securities and Exchange Commission (the “SEC”) to be used to solicit votes for the election of MNG’s slate of highly-qualified director nominees at the 2019 annual meeting of stockholders (the “Annual Meeting”) of Gannett Co., Inc. (the “Company”). Stockholders are advised to read the proxy statement and any other documents related to the solicitation of stockholders of the Company in connection with the Annual Meeting because they contain important information, including additional information relating to the participants in MNG’s proxy solicitation. These materials and other materials filed by MNG in connection with the solicitation of proxies are available at no charge on the SEC’s website at The definitive proxy statement and other relevant documents filed by MNG with the SEC are also available, without charge, by directing a request to MNG’s proxy solicitor, Okapi Partners LLC, at its toll-free number (888) 785-6668 or via email at


1   Since spin-off, Gannett has spent $350mm on digital acquisitions while diluted EPS has declined 98% (represents decline in trailing 12 months diluted EPS from June 28, 2015 to March 31, 2019).
2 Gannett moved from a net cash position of $62mm as of June 28, 2015 to a net debt position of $211mm as of March 31, 2019.
3 Changes in Gannett financial results since its 2015 spin-off from its former parent company reflect changes in trailing 12-month financials from June 28, 2015 to March 31, 2019.
4 Gannett Co., Inc. – ISS report published on May 2, 2019; permission to quote from report was neither sought nor obtained.

In News Industry, a Stark Divide Between Haves and Have-Nots, Local newspapers are failing to make the digital transition larger players did — and are in danger of vanishing, Keach Hagey, Lukas I. Alpert and Yaryna Serkez, Wall Street Journal, 4 May 2019.


Paul Caminiti / Hugh Burns / Renée Soto
+1 212.433.4600

Okapi Partners LLC
Bruce Goldfarb/Pat McHugh
+ 212.297.0720


Paul Caminiti / Hugh Burns / Renée Soto
+1 212.433.4600

Okapi Partners LLC
Bruce Goldfarb/Pat McHugh
+ 212.297.0720