USA Today publisher takes huge writedown

Gannett Co., US publisher of US and UK newspapers, took a $2.5 to $3 billion writedown today, optimistically describing it as “an accounting issue”, despite the fact that the value of Gannett has declined by half in the past year. The real culprit seems to be declining revenue in home sales ads, reflecting the downturn in real estate in the US and the UK. Canadian newspapers haven’t been as drastically hit as US and UK papers, in large part because of a more stable real estate market and tougher lending practices by more conservative Canadian banks.

Associated Press, June 10, 2008