The New York Times reported on a huge merger of newspapers.
In August, Gannett, the parent company of USA Today and more than 100 other dailies, and New Media Investment Group, the owner of the newspaper chain GateHouse Media, announced their intention to join forces. Over the next two months, the plan breezed through the regulatory process, winning approvals from the Justice Department and the European Union. Last week, shareholders at the two companies voted yea. And now one in five daily papers in the United States has the same owner, under the Gannett name, according to figures provided by researchers at the University of North Carolina.
The combined company will have its headquarters in Gannett’s home base, McLean, Va., and will be led by Michael E. Reed, the New Media chief executive since 2006. The job puts him in charge of more than 260 dailies — from small papers like The Tuscaloosa News in Alabama to big ones like The Detroit Free Press.
GateHouse’s acquisition of Gannett, a cash-and-stock transaction valued at roughly $1.2 billion, was intended to give the combined companies an annual savings of some $300 million. Mr. Reed said the bulk of the savings “is not going to come from editorial,” meaning newsrooms would be largely spared.
Pressed to say more, Mr. Reed added: “I can’t give you an exact number, but almost nothing. I mean, just for context, there’s 24,000 employees in the two companies, and a significant portion of the cost reductions are going to come from things other than people. But, obviously, people’s a part of this as well. Out of 24,000 people in the company, there’s about 2,500 that are actually writing stories every day. So it’s a small number, relative to 24,000. So there’s so much opportunity beyond the newsroom for us to go get these efficiencies.”
Paul Bascobert, the chief executive of the former Gannett who will hold that same title for the new Gannett’s operating company, seconded that statement, saying the company’s mission “is to connect, protect and celebrate local communities.”
“And the core of that is great local journalism,” he added. “That’s the engine that has gotten us to the place we are today, and that’s the engine that’s going to carry us forward.”
Newspaper executives have sung this tune before, only to end up making aggressive cuts in an industry that has struggled since the one-two punch of the recession more than 10 years ago and the rise of digital media. Twenty-five percent of newsroom employees were laid off between 2008 and 2018, according to the Pew Research Center.
GateHouse and Gannett have both cut newsroom employees in recent years. GateHouse consolidated some business functions at a center in Austin, Texas, resulting in layoffs elsewhere, and laid off more than 100 newsroom employees in the spring. Gannett has let go dozens of journalists, including prominent sportswriters and a Pulitzer Prize-winning cartoonist.
Mr. Reed and Mr. Bascobert, who spoke with The New York Times at the USA Today office in Midtown Manhattan, said the savings they had in mind amounted to 8 percent of annual costs. “So it’s not an overwhelming number — very achievable,” Mr. Reed said.
The News Guild, which represents journalists at many of the company’s newspapers, has been critical of the merger. The union “intends to hold managers of the new Gannett to the promises they have made,” the News Guild president, Bernie Lunzer, said in a statement. “We will continue to demand that they fund high-quality journalism.”
Mr. Reed said he would make newsroom decisions with the help of data that tracked reader interest and the output of journalists. “The ability to measure production at the reporter level allows us to get stronger and healthier and do more quality local journalism with the same amount of resources, potentially,” he said.
He seemed aware that his stats-based approach to newsroom management was not likely to sit well with the union. “The Guild would fight me on that, and say, ‘We should do business like it’s 1950,’” Mr. Reed said, adding, “I frankly think the Guild’s a big problem, and until we can get them to sit at a table and have a real discussion about where the world is today, there’s going to be inefficiencies….”
The merger raises another question: What does it mean that the beleaguered newspaper industry, considered essential to democracy, is controlled by ever fewer corporations, many of them with a focus on finance rather than covering the news?
The supersize version of Gannett has a byzantine corporate structure. It will be managed, under an agreement that lasts two more years, by Fortress Investment Group, a private equity firm in Manhattan. Fortress was the entity that controlled New Media Investment Group, the parent of GateHouse Media.
Fortress, in turn, is owned by SoftBank, the Tokyo conglomerate founded by Masayoshi Son, a brash executive who had a friendly meeting with Donald J. Trump in December 2016, when Mr. Trump was the president-elect. (Mr. Son was also a driving force behind the all-but-final megamerger of Sprint, a SoftBank-controlled company, and T-Mobile; that deal won regulatory approval after a lobbying campaign that included company executives staying at the Trump International Hotel in Washington.)
Iris Chyi, a professor at the University of Texas School of Journalism, expressed concern that the newspaper business was in fewer corporate hands. “From a media economics perspective, more competition is always better,” Ms. Chyi said. “We don’t want a company to have way too much power.”
Another large newspaper chain, MediaNews Group, is owned by a hedge fund, Alden Global Capital. Gannett resisted MediaNews Group’s bid to buy it earlier this year. On Tuesday, Tribune Company, a publicly owned major chain, announced that Alden had purchased a 25 percent stake in it. McClatchy, another major chain, said last week that it risked insolvency.
Mr. Reed grew up in Elmira, N.Y., and was once a delivery boy for The Star-Gazette there — the descendant of The Elmira Gazette bought by Frank E. Gannett in 1906. It was the first publication in what would become a newspaper empire.
Now a part-time resident of the Rochester, N.Y., area, Mr. Reed noted that the new incarnation of Gannett would have two publications in that part of the world: The Daily Messenger, in Canandaigua, formerly a GateHouse publication, and The Democrat and Chronicle, a longtime Gannett daily in Rochester.
“I think both products get stronger,” he said, “because now we’re going to be able to share those resources.”
When he spoke of how Gannett would manage the neighboring papers, he mentioned the newsroom. “Do we need two people covering the Rochester Red Wings?” he asked, referring to the minor-league baseball franchise. “So that’s where we potentially redeploy assets.”
A message about this merger from the publisher of ProPublica, which publishes investigative journalism:
Not Shutting UpBY RICHARD TOFEL |
Welcome to Not Shutting Up, a newsletter from ProPublica’s president, Dick Tofel. You’re receiving this because you’ve supported ProPublica’s journalism; we’re grateful for that, and we hope to give you some context on how our newsroom works. If this email was forwarded to you, you can sign up to receive it here.
Dear ProPublicans,I know I’ve written to you before about the business crisis in local news, but it has accelerated significantly in the last couple of weeks, and I think you need to understand how and what it means.Here’s what’s happened in just the last 10 days:
What, you may ask — you should ask, we certainly do — is ProPublica doing about this? Here, I think, the recent very bad news is somewhat leavened by some hopeful signs. This week, our own first local newsroom, ProPublica Illinois, published an extraordinary story about the horrifying use of isolation rooms for children as young as 5 years old in schools across the state. This story was the fruit of a collaboration between two ProPublica Illinois reporters and one from the Chicago Tribune, and it was published by both organizations. Yesterday, the state took emergency action to ban the practice. If you have not already read the story, I urge you to do so, as well as this month’s moving and insightful ProPublica Illinois story about the racial legacy of the town of Anna. Also this week, we published the latest installments in continuing series from our Local Reporting Network partners concerning the concentration of political power in New Jerseyand a major environmental threat in Louisiana. And we’re in the early stages of our forthcoming initiative in partnership with The Texas Tribune; we posted many of the jobs for it this week. So that’s what we’re doing. We’re working on possible plans to do more. What, I hope you might ask, can you do to support local journalism? Beyond continuing your engagement with us, for which we are always deeply grateful, if you still have a local news outlet you think provides you with important facts and perspective on your community, don’t just assume its immortality. Subscribe if you can; donate what you can if that’s possible. These are tough times for local reporting in this country, and, with hedge funds calling the tune, tougher times lie ahead. You should expect us to do our part to make this a high priority. I hope some of you can do the same. Regards, Dick
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One thing that is happening now is the dominance of news aggregators that present, as news, articles created by PR firms with embedded and disguised product or policy agenda endorsements. And, ofc, there are now many news outlets that pay writers nothing. ZIP. People generate copy for free just to have the writing credit. A great many journalists lost their jobs after the crash of 2007, and those jobs haven’t been replaced.
And, ofc, when Murdock–the man who brings you Fairly Crazy and Imbalanced Faux News–bought the Wall Street Journal, he promised that it would remain editorially independent. It now runs almost daily articles about how Medicare for All, the Green New Deal, etc., will turn the United States into Venezuela. The WSJ was always the Wall Street Journal of Corporate Apologetics, but it is now indistinguishable from Not-So-Brietbart or The Daily Caller or any other extremist right-wing rag.
Tofel could expand his point to include situations like newspapers in rural Ohio communities which are part of smaller chains. They are owned by a right wing guy from Connecticut.
I have noticed the same trend in the local Sinclair Broadcasting station. At first, there was a little propaganda in shows that aired at 2:00 am. Now they are inserting more opinion pieces into the regular news. We had a number of stories on the deadly foreigners that sneak into the country. There was a recent story on how the unregistered aliens are voting. These are all fear mongering topics designed to inspire xenophobia.
Sinclair is partisan
See the emails between Propaganda Minister Steven “Goebbels” Miller and Breitbart, which discuss running as many stories as possible about immigrant criminals, even though immigrants, both legal and illegal, have much lower crime rates than do American citizens generally. It’s all about the hate-mongering for these White Supremacists.
the dangerous edge: promoting only stories of immigrants gone wrong
In a better world there would be more forces for good.
Udi Greenberg tells us in an article that the Catholic Church has “resurrected its earlier quest to become the hegemonic force in society.” And, we can see that’s true. Media reported that the U.S. Conference of Catholic Bishops met with Betsy DeVos. We know that the Catholic state conferences have the Blaine amendments, which protect religious freedom, in their sites for elimination. And, it wouldn’t surprise anyone to find out that hedge funders who are Catholic are integral to the agenda nor, that Koch prints run throughout, nor that Catholics and evangelicals have joined together.
We were lulled into complacency by a period in which the Catholic Church, recognizing modern values, respected pluralism and religious freedom. We see, after the scandal of widespread priest abuse against children, the church doubled down in the manner of Trump and is on the offense against the common good.
This is not just a fight for public education. It is a fight for the continued right of women to vote and for men and women’s right to birth control. It is a fight against the abuses of colonialism. And, it’s a fight for democracy.
Our freedoms are inextricably linked- a free press, freedom from religion, freedom to own goods in common, freedom to privacy, freedom from the seizure of the common goods by oligarchs….
My first reaction is, well this has been going on a long time—Murdoch, anyone? Glad to see a reputable publisher like Gannett heading up one of these media mega-mergers. Murdoch’s already swallowed up the yellow-journalists; he’s got the print version of faux news covered. Gannett pprs have their own brand appeal, & will lose it if they become some sort of corporate mouthpiece – or not? All of it is fallout from economic squeeze of digitalization/ broad online competition. Nothing stops this unless govt decides to set aside a budget for public news outlets. I.e., PBS/NPR before Reagan crushed their budgets. I remember first seeing the results of that– ads on PBS [Exxon]– in the early 1980’s.
But the claim this’ll have little effect on quality of reporting/ analysis is nonsense. Just look at the implementation plan: “Mr. Reed said he would make newsroom decisions with the help of data that tracked reader interest and the output of journalists. ‘The ability to measure production at the reporter level allows us to get stronger and healthier and do more quality local journalism with the same amount of resources, potentially,’ he said.” Reading between the lines [pun intended]: we’ll weed out low-performers via data-crunching. Sounds familiar. Quality of journalism will suffer from standardization/ mediocritization just as public education does from accountability schemes.
Beautifully said. And spot on. One more example of data drivel self-justification from an oligarch whose goal is to make himself richer by any means possible
Yup, all the news we want to hear. That’s what makes the $$.
Combine and outsource accounting (purchasing, payroll, accounts receivable and payable, etc.), typesetting, customer service, human resources, and legal. Recycle stories and ad copy across the network and fire journalists, graphic designers, etc. Replace delivery people with drones and online/mobile app portals. Invest in news writing software. Customize news feeds based on datamining of Social Media profiles. Serve The Agenda of the very wealthy.
https://bobshepherdonline.wordpress.com/stories/my-experience-in-corporate-america/
Don’t worry. This won’t hurt a bit. And how about those great Black Friday savings! And OMG, did you see that TikTok post! And OMGGGG, do they allow THIS on Instagram?!?!?!–We DARE you to click here! These and other news stories you might have missed, delivered daily to your phone!
News? I think we have propaganda. Our local news is more about traffic reports than real news. The national news is more editorializing than news.
Not really. There’s a heck of a lot of humdrum events (as well as sensational) reported in local, state, and national newspapers, online or IRL.
Here is a report from two years ago showing the extent of media consolidation, including print and TV, before the consolidation Diane has reported. This has a map with some call-outs for specific cases, one of these for my home town. I know three journalists who lost their jobs and one Pulitzer prize-winning editorial cartoonist.
https://billmoyers.com/story/media-consolidation-should-anyone-care/
Thanks for the link, Laura. “Bill Clinton’s decision to sign the Telecommunications Act of 1996 handed lobbyists a major victory.” This is what we get with a neo-liberal.
Hedge funds? Why did it have to be hedge funds? They intend to make money by laying off reporters: Who needs investigative journalism? Who needs public education? Who needs democracy? Gimme money! All the money!
Warren Buffet Criticized Hedge funds as far back as 2004.
https://www.thestreet.com/story/10158024/1/buffett-criticizes-hedge-funds.html
I learned yesterday that they are also buying large group health practices. They may soon be replacing rapacious insurance companies with venial finance profiteers.
I believe there is something huge, regarding freedom of the press, and on the surface it is caused by the right wing idiocy about fake news, being driven to extremes by Donald Trump. Donald Trump is not forever, but his brand of craziness has created a license for those most clearly identified as journalists to deal almost exclusively with each other—no matter what their position on the political spectrum. The dominant portion of these self-righteous license holders are centrist democrats, which helps the right wing crazies to make the claim that it is all one conspiracy……..disregarding the huge amount of documented facts they work with as they attempt to advance what is reality.
But advancing reality is easier for them, if they set boundaries, and those boundaries include an underlying contempt for ordinary, non journalist citizens. Public education is the subject most prominently affected in my perception, but I am sure there are others.
I noted it earlier this year, in St. Louis, in the coverage of the announcement by Kamala Harris that she was running for President. She is not white, and not male….some will point to that as her underlying problem, others blame her failure to find a core message. When she announced…I thought she had one….a recognition of how important public education is in guiding the direction of our country. The Post Dispatch refused to print anything about her spectacular Sunday announcement….and day after day….for three weeks….I documented their refusal to write a single paragraph about her candidacy, contrasting it with the drivel they were coming up with as important news. I believe she made a mistake in her attack on Biden which seemed to boost her in the first debate, but the history of busing and who did what with what results is not the most solid foundation to make the case for public education. Teachers in the classrooms should have remained her focus, and undoubtably, she probably had advisers who steered her in other directions. As her campaign seems to be fading away, I have noticed that Saturdays are a great morning for catching a couple of white guys taking a few minutes to make sure she is buried. Followed later by a couple of black journalists carefully, almost apologetically defending her. She probably no longer deserves that much attention……but there is this maniacal mantra about how only 6 or 7 states actually matter, and only a centrist can protect us from four more years of Trump. Not much thought is given to what an enormous turnout of those who vote for democrats, led by an inspiring potus candidate could do in the house and the senate……there is much to be accomplished, that will not be within the narrow boundaries of the centrists who know everything. Now, Warren’s high standing is being cut….maybe the centrists simply do not fear the charm of some 78 year old like Sanders could actually be nominated.
I started noticing the emphasis against teachers, and trust in corporate logic in St. Louis in 2006…..(still having time to notice my Cardinals winning a world championship). Peter Downs was a brilliant man elected to the school board, and an immediate target to be destroyed by mayor Slay, because of his opposition to the charter schools. I remain haunted by the 12 bullet murder of a former special ed student, Tim Bacon—–it is a feeling I have always had about the refusal of the local press to demand to know why he was killed. I cannot prove that it had anything whatsoever to do with education.
Democrats should but dare not deal with a reality regarding Obama. An ignorant about public education multi-billionaire, along with a politician from Illinois named Arne Duncan were terrible choices to by Obama….Devos, like the fake news drivel from Trump, makes it possible to not bother to examine what happened Obama’s choices.
In my family….I am the ordinary citizen. My sister and her husband think Trump is a terrrible person, but has policies better than the socialism which will be offered by any democrat they nominate. Their son, Matt Grossmann, is a brilliant journalist, far more sophisticated than his parents, and I am sure they are proud of him. His wife, Sarah Reckhow is less prominent, but just as smart as Matt is. She makes it easier for me to play my non-journalist, but studious about what is what ordinary citizen.