Gannett Co Inc

USA Today, the Technicolor national newspaper launched by Gannett Co. five years ago, turned a profit in May for the first time, although it will fall back into the red during the summer and lose money for the year, the company announced Tuesday. The paper earned roughly $1 million in operating profit in May, following a loss in April of $900,000, Gannett said.

Gannett Co., the nation's largest newspaper publisher, reported a 36% drop in second-quarter earnings as the newspaper industry's woes caused a sharp decline in revenue. The McLean, Va., company reported profit of $233 million, or $1.02 a share, compared with $366 million, or $1.56, in the year-earlier quarter. Gannett shares dropped 78 cents, or 4.5%, to $16.57. The publisher of the nation's largest newspaper, USA Today, and 84 other dailies sold several papers in the year-ago quarter that added 32 cents a share to earnings.

The money managers who successfully prodded Knight Ridder Inc. to put itself on the market might have picked a more advantageous moment. San Jose-based Knight Ridder, like other big-city newspaper chains, is suffering from chronic circulation and advertising declines, but there's also the persistent background buzz that the industry has its rear legs in a tar pit with nothing between it and extinction except a certain amount of useless thrashing.

The Detroit News and Detroit Free Press reached a tentative contract with employees Tuesday that smoothed the start of their joint operating agreement and calmed fears of holiday advertisers. "We're delighted we have a settlement," said Robert Giles, president and publisher of the News, owned by Gannett Co. "We expected to be able to work it out on an amicable basis, and we did."

The Gannett Foundation said Monday that it had rejected a bid from Gannett Co. to buy its 10% share in the company for $540 million and that it was formally authorizing its investment bankers to explore other offers. The rejection is the latest turn in the strange feud between querulous former Gannett Chairman Allen H. Neuharth, who controls the foundation, and his old company.

An arbitrator found that Tribune Co.'s sale of the Advocate of Stamford, Conn., to Gannett Co. violated a union contract because the terms do not require Gannett to honor newsroom employees' collective bargaining agreement, according to court papers filed by the union. Local 2110 of the United Automobile, Aerospace and Agricultural Implement Workers of America promptly filed a request to extend an injunction that a federal judge issued last month temporarily blocking the sale.

Tribune Co. said it agreed to sell its daily newspapers in Stamford and Greenwich, Conn., to Gannett Co. for $73 million. The Greenwich Time and the Advocate of Stamford have a combined circulation of 39,000 and are the smallest of the 11 dailies owned by Chicago-based Tribune, which also owns the Los Angeles Times. Tribune is the No. 2 U.S. newspaper publisher by circulation behind McLean, Va.-based Gannett.

A federal judge blocked the planned shutdown of the Honolulu Star-Bulletin until the state's antitrust lawsuit against the newspaper's owner and its only competitor is decided. The state argues that newspaper giant Gannett Co., which owns the morning Honolulu Advertiser, in effect paid off Liberty Newspapers Limited Partnership, the owner of the afternoon Star-Bulletin, to create a monopoly.