A company memo quoted by the Gannett Blog says, “GannettLocal is a new business model focused on working with small and medium-sized business to provide them a high-touch marketing consultation and a suite of multiplatform solutions (search engine marketing, e-mail, digital display, website and geo-targeted print/flyers) delivered by a team of dedicated experts over the phone.”

That’s “a high-touch marketing consultation … over the phone.”

GannettLocal is based in Phoenix and already in use by the the website azcentral at Gannett’s Arizona Republic.

Anyone who reads a McClatchy newspaper knows the quality of the journalism has declined precipitously as the company has cut positions, and anyone who works for, or has worked for, McClatchy knows that its management is committed only to the bottom line — money.

Pruitt bases his claim of ongoing quality on national recognition of the work of three McClatchy papers: The Kansas City Star winning the Robert F. Kennedy Award, the Belleville (Ill.) News-Democrat winning the George Polk Award and the McClatchy Washington Bureau being named as a Pulitzer Prize finalist for national reporting. But this work, and other solid reporting at McClatchy newspapers, is the work of local journalists who remain dedicated to their profession, not McClatchy. Pruitt gloms onto their efforts while he has eliminated the jobs of about a third of their colleagues and makes plans to eliminate more.

Perhaps the job cuts were inevitable given the economy and the changes in the newspaper industry. But to maintain that they have not adversely affected the quality of the newspapers is simply a lie and an insult to those whose lives have been disrupted by these layoffs.

Pruitt is every bit as despicable as the CEOs of BP, Wall Street banks, Big Tobacco and other industries who care solely about profits and don’t give a thought about who they use or hurt along the way.

But, Mark Siffin isn’t advertising in the company’s newspapers. He wants land McClatchy owns so he can build a parking garage and erect a pair of 20-story-tall electronic billboards on top of it, according to the South Florida Business Journal.

Siffin will pay $230 million for 10 acres owned by McClatchy’s Miami Herald. He plans to build the garage and a retail center next door. He has already paid McClatchy $16 million toward the purchase, which included an extension on the contract to close in 2011.

Siffin still has to get a city commission to approve a new ordinance allowing the electronic billboards. Some residents oppose them.

Regardless, McClatchy gets to sell land it has been trying to unload for some time at a good price; the same lot was under contract for $190 million in 2005, the height of the real estate market, according to the Journal.

You’d think $230 million could save a lot of journalists’ jobs, but you wouldn’t want to bet on it.

The publisher’s first quarter report on Thursday showed improvement, thanks to reduced expenses — obtained chiefly through layoffs, which may not be over  — and an advertising climate that isn’t as bad as it was.

But the bottom line was  “a net loss from continuing operations of $2 million, or 2 cents per share,” the Business Journal says. “In the same period last year, the company incurred a net loss from continuing operations of $37.7 million, or 45 cents per share.

“Without the charges, McClatchy earned $4.8 million, or 6 cents a share, for the quarter, compared to a loss of $22.9 million, or 28 cents a share, in first-quarter 2009.”

The Associated Press report, on the other hand, says “a one-time accounting gain related to newspapers that it sold a few years ago” allows McClatchy to claim a profit for the quarter. “[N]et income, including discontinued operations, came to $2.2 million, or 3 cents per share,” the AP says. It lost $37.5 million, or 45 cents per share, in the same period a year earlier, which included charges for severance.

Advertising revenue dropped 11.2 percent to $253 million, better than the 20.5 percent drop in the fourth quarter of 2009. In last year’s third quarter, ad revenue fell 28.1 percent.

Total revenue for the quarter was 8.2 percent less than a year ago, at $335.6 million compared to $365.6 million.

McClatchy’s stock fell following the report, perhaps, Benchmark Co. media analyst Edward Atorino told the AP, because “some investors may have been looking for more details about how McClatchy plans to cut costs, given that it expects further revenue declines.”

The company’s  costs, excluding severance payments, declined more than 21 percent in the first quarter, compared with the same period a year earlier, largely because of lower payroll and newsprint expense, the AP said. McClatchy has cut about a third of its work force since the middle of 2008.

“In a statement, McClatchy CEO Gary Pruitt said the company ‘will remain vigilant’ on costs but acknowledged that second-quarter expenses will not decline the way they did in the first,” the AP said. “During a conference call, Pruitt said the company would try to avoid further job cuts, but he didn’t rule them out.”

The debt restructuring involved extending  “approximately $1 billion in maturities from mid-2011 to mid-2013 and beyond, including the $875 million of senior secured notes due in 2017,” Pat Talamantes, McClatchy’s chief financial officer, said in the release.

McClatchy’s debt remains from its $4.5 billion purchase in 2006 of the much-larger Knight-Ridder newspaper chain.

McClatchy’s stock fell $0.75, or 10.98 percent, to close at $6.08 Thursday.

“Gannett did not issue formal earnings guidance for the current quarter or the rest of the year, and CEO Craig Dubow declined to give specifics on how ad revenue is shaping up in April,” The Associated Press said. “But he told analysts on a conference call that the year was ‘off to a great start.’ He added: ‘The momentum that we had at the end of the year continued through the first quarter.’

“Gannett was the first major publisher to report earnings for the January-March period and could offer a preview of what will come next week from McClatchy Co., Lee Enterprises Inc. and The New York Times Co.”

After surging to a new 52-week high of $19.68 in early trading, Gannett shares retreated to $18.04 Friday afternoon, down $0.10 on the day. McClatchy rose $0.42 to $6.46, and Lee shares jumped $0.31 to $4.35. The New York Times was down $0.36 to $12.35.

Gannett, which owns USA Today and more than 80 other daily newspapers along with TV stations, said its net income jumped 51 percent despite a 4 percent decline in revenue. Last year it cut 1,400 jobs, or about 3 percent of its work force.

As for McClatchy, which reports April 22, “JP Morgan forecasts that ads will be off by 8.4 percent as circulation continues to grow,” says PaidContent.org. “While the circulation gains might not offset negativity on the ad front, cost-cuts should help margins jump to 25 percent from 1Q ’09’s 12 percent. Ebitda should rise 91 percent to $83 million.

“In general, McClatchy’s heavy presence in Florida and California means that its fortunes are directly tied to the economic winds in those two troubled states. Ultimately, that will add to the general industry-wide woes affecting the publisher.”

Marvel Entertainment, Inc. and Live Nation Entertainment, Inc. are Nos. 1 and 2 on the list.  The E.W. Scripps Company is the next newspaper publisher on the list, coming in at No. 5.

McClatchy (MNI) was up $0.1 early Friday at $4.84. (Then, by the time our computer crashed, and we rebooted and reloaded this post, it was down $0.3.)

Things looked better in January when the company announced “encouraging fourth-quarter results,” Reuters says. Then the company put off its next major debt payment until 2013 by agreeing to higher interest rates.

“But McClatchy’s swaps have retraced all of January’s strengthening and are now 157 basis points wider than when its refinancing was announced, at about 1016 basis points as of Tuesday, according to data from Markit,” the Reuters report says.

“‘I think the market is smart enough to know that there are some fundamental issues here and what they’ve done is basically delayed the inevitable,’ said Shelly Lombard, analyst at independent research service Gimme Credit.”

“Despite the fact that McClatchy’s online revenues are growing rapidly, they are still a small portion of its overall business and are not expanding quickly enough to replace newspaper revenue, she said.

“On the positive side, Lombard said she does not expect McClatchy to run into problems for at least 18 months and probably two years, and investors can collect their coupons until then.”

G.D. Gearino, a former business editor at McClatchy’s News & Observer in Raleigh, provides a good explanation of  McClatchy’s bond swap on his blog. He also points out that deep in the financial statements we find that “the new bonds, unlike the previous ones, are backed by McClatchy’s assets. Bondholders will be on equal footing with the banks.  And one of those assets, of course, is The News & Observer.”

We saw the Reuters report mentioned on the Fitz & Jen blog at Editor & Publisher, where, in their daily market roundup, they point out that on Tuesday McClatchy “took the sector’s biggest hit percentage wise with its shares off 5.7 percent to $5.12. Reuters reported that credit default swaps for MNI indicate the market is nervous about the company.”

The report says that in Q4 2009 the industry “saw its 14th consecutive advertising revenue decline; the last nine of those quarters were double-digit declines.” And nothing indicates that January, typically a bad month for revenue, is looking any better.

The report examines the five publishers individually: Gannett, New York Times Co., Lee Enterprises, Media General and McClatchy Co.

At McClatchy, it finds strong online revenue growth comparatively, but scoffs at CEO Gary Pruitt’s claim that expectations of revenue declines in the low- to mid-teens percentage range in January indicate a recovery. “In other words, McClatchy expects the Q4 decline of 20.5 percent to be followed in Q1 2010 by a decline of somewhat less than 15 percent, and considers that to be an ‘improving advertising trend.’”

In another problem area, “Besides nearly $2 billion in long-term debt, McClatchy also disclosed that at year-end, its pension plans were underfunded by $494 million in the ‘qualified’ plan (their standard defined benefit plan, which is frozen), and another $100 million in the non-qualified supplemental executive-level plan. This accumulation of future obligations makes McClatchy one of the most-leveraged publishers out there.”

CEO Gary Pruitt is excluded from eligibility for the $160,000-plus bonuses under the “2010 Senior Executive Retention Bonus Plan.”

Bonuses will be paid to three executives E&P names if the chain’s performance in operating cash flow in 2010 is sufficient to fund a supplemental company contribution to its 401(k) retirement plan, McClatchy said.

“Given that total ad revenues are still negative and secular challenges remain, we will continue to focus on costs,”  Pruitt said in a statement, according to a New York Times report. Over the past couple of years, “costs” has meant personnel and has translated as job cuts at McClatchy newspapers.

McClatchy posted a 16.5 percent drop in revenue from a year earlier to $393.2 million, and said advertising revenue was down 20.5 percent, to $308.7 million. But, Pruitt said, advertising trends — particularly on the Web and including classifieds — were better in October, November and December.

“McClatchy spent 2009 shrinking itself to match dwindling ad revenue in the recession,” The Associated Press said. “It ended the year with about two-thirds of the payroll it had in the middle of 2008.”

The publisher also announced a deal to delay payments on its $1.95 billion of debt by selling bonds and assuming higher interest rates.