The quarterly financial reports released by Gannett Co. Inc. and Lee Enterprises Inc. last week provide a contrast on how the two media heavyweights are confronting the historic pressures facing the nation’s newspaper industry. 

The reports show newspaper profits of both companies are continuing to shrink, but they suggest that Davenport-based Lee may have the better plan for growing profits in the new age of digital news. 

For one thing, the bleeding of advertising dollars was slower at Lee, where total ad sales were down 5.6 percent for the quarter, compared with a drop of 7.8 percent for Gannett publications. 

More important, Lee may have cracked the problem of declining subscription revenue that has plagued all newspapers in recent years. Lee said its subscription revenue for the quarter was up 10.9 percent, compared with a decrease of 2.2 percent for Gannett publications.

One reason Lee is now moving at a quicker, more confident pace is because it got into financial trouble earlier.  

Both companies are well-known to Iowans through the newspapers they own. Gannett’s Iowa properties include The Des Moines Register and Iowa City Press-Citizen, while Lee owns newspapers in Davenport, Muscatine, Waterloo/Cedar Falls, Mason City and Sioux City.

Both chains were created during the mid-20th century and by the 1990s were among the largest media operations in the country. Gannett was always larger and is today worth more than $7.5 billion, nearly 50 times the value of Lee, which went through a difficult period that culminated in bankruptcy reorganization in 2011. 

But Gannett’s size has been something of a liability in recent years, prompting it to announce last year that it would split in two and create separate, publicly traded holding companies for its broadcast and publishing operations.  

Lee made a similar move in 2000 when it sold all its broadcast properties, saying it wanted to concentrate on newspapers. Five years later, Lee bought the St. Louis Post-Dispatch, a move that eventually pushed the chain into bankruptcy. 

Since Lee emerged from bankruptcy in 2011, its top executives appear to have a single-minded focus on the problems and opportunities that the digital age poses for local news organizations.

That’s not the case at Gannett, where much of the focus has been on growing the broadcast side, while minimizing the drain from its newspapers. The result has been an unproductive churn of leadership at the newspapers.

Another difference is that, while both chains began as collections of small and middle-sized dally newspapers, Lee has remained closer to that model. Most of its 50 daily newspapers are in smaller cities with limited competition for news and advertising dollars. The one exception was its unfortunate acquisition of the St. Louis Post-Dispatch in 2005. 

Meanwhile Gannett’s signature newspaper is nationally focused USA Today, and many of its 82 dailies are in larger markets where competition was always stiffer and moreso in the digital age. 

Lee’s smaller markets make it easier to experiment and find profitable synergies between the newspapers’ marketing services and their print and digital advertising.

In fact, Lee’s quarterly report shows income from its digital and marketing services grew 14.6 percent in the most recent quarter. 

Gannett’s report does not include a comparable line item. But it is worth noting that Gannett’s two nationally successful digital revenue producers, Cars.com and CareerBuilder, will be owned by the broadcast side after the split, removing a substantial revenue source from the print side.

At this point it is unclear what will happen to Gannett’s newspapers once the more profitable broadcast properties leave. 

One option will have to be selling the newspapers, because it will soon become apparent to shareholders that they are worth more as individual properties than as a whole.