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–(BUSINESS WIRE)–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
,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
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
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


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
New York, New York 10036

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

We encourage all shareholders to carefully review this
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

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
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

Partners LLC

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+ 212.297.0720

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