Reader Elmer sends this fascinating analysis of the problems at The Daily Advertiser, a Gannett Paper in Lafayette, Louisiana. Layfayette is about half the size of Rochester, and the Advertiser is less than half the size of the D&C: the 200 or so remaining employees put out a paper as small as 16 pages on some days.
Though the Advertiser is paid $240K per year to publish public notices, Gannett laid off the legal clerk who handled those notices. This led to a cancellation of a City-Parish council meeting because the Advertiser failed to publish the meeting notice.
In the first three quarters of 2007, the Advertiser made 33.5% margins on revenue of $23.2 million. That's $7.8 million of profit for Gannett.
In the same period, the Democrat and Chronicle made 28.5% margins on revenue of $62.3 million. That's $17.8 million in profit, according to Gannett Blog.
The Lafayette story contrasts the cutbacks at the Advertiser with a nearby family-owned daily in Arcadia, LA. That paper hasn't cut a single job, and the publisher isn't planning to do so.
With all the hysteria about the death of newspapers, it's important to remember that what's shrinking is profit margins. Newspapers are still very profitable, and 30-40% margins can take quite a hit before a paper starts to lose money. Gannett is cutting to save margins, not to save the company.
The whole Lafayette story is worth a close read. It's the well-researched, lengthy and well-written product of a Lafayette alt-weekly that's only been around since 2003. I haven't read anything as good in City Newspaper, which continues to be an alternative in name, not in content.

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