Big, bad month at the end of an indifferent year for US papers
Thursday, November 28, 2019 3:33 pm
It's been a big month for North American newspapers... and possibly a very bad one.
The new post-merger Gannett Co - which brings New Media's Gatehouse and Gannett together - is looking to save US$300 a year in costs.
Hedge fund Alden Global Capital - which Newsonomics' Ken Doctor calls "America's worst newspaper owners" - picked up almost a third of Tribune Publishing, taking over from Michael Ferro as its largest shareholder. It was already a substantial shareholder in Gatehouse.
Rupert Murdoch's New York Post had a word on the situation across the street at Tribune's Daily News... and it was "worried". As in 'Chuck Schumer worried about future of the Daily News'. As he might be, if Doctor is right with the headline to his Nieman Lab column, which accused Ferro of "ushering the vultures into Tribune", a decision which sadly, was greeted with an increase of up to 15 per cent in the share price.
Apart from the Chicago Tribune and the New York Daily News, the company's assets still include the Baltimore Sun and the Orlando Sentinel; the Los Angeles Times escaped into private ownership in February last year when Tribune - which was calling itself Tronc at the time - sold it, the San Diego Union-Tribune, Spanish-language Hoy Los Angeles and community newspapers to biotech billionaire Patrick Soon-Shiong, who is also Tribune's second-largest shareholder.
Gannett has a portfolio of 260 daily newspapers and national USA Today, and has owned Newsquest - the UK's second-largest newsmedia publisher - since 1999. Its LA-headquartered ReachLocal (not connected with Reach in the UK, which is Newsquest's main rival) also sells online marketing and advertising solutions - working with brands such as Google, Bing and Facebook - in Europe, Asia, Australia and New Zealand, and owns sweetIQ. A UK operation was sold after going into administration in 2015.
Gatehouse parent New Media Investment Group is paying US$1.2 billion in cash and shares for Gannett, is externally managed through global investment management firm Fortress Investment Group, an arrangement which will run until the end of 2021.
President of union NewsGuild-CWA Bernie Lunzer described the deal as "bad for journalists, bad for readers and bad for the future of local journalism", anticipating that local papers "will likely vanish, jobs will be slashed and reporting will suffer".
Of Alden, NewsGuild claims staffing on its Digital First titles has been cut by 75 per cent since its 2011 acquisition. Julie Reynolds, writing on the Guild's NewsMatters site "for DFM workers" also mentions pharmacy chain Fred's, shares in which have fallen from about US$17 when Alden first bought in, to two cents today.