The Media Today

Two newspaper giants plan a massive merger

July 22, 2019

In recent months, it seems, top US newspaper companies have been speed dating. In May, The Wall Street Journal reported that Gannett, the biggest of these companies by circulation, had talked to all of GateHouse, McClatchy, and Tribune—formerly tronc, with which Gannett has a messy history—about a potential merger. (By this point, Gannett had already rebuffed the only suitor to have gone public with its interest: Digital First Media, the hedge-fund-backed publisher notorious for brutal cost-slashing at its properties.) Of these possible pairings, the notion of a Gannett–GateHouse partnership was perhaps the most striking: GateHouse—itself backed by private equity and hardly of glowing journalistic reputation—is America’s second biggest newspaper chain after Gannett, and owns even more dailies than its larger rival.

It now looks like this pairing might last. Late last week, the Journal’s Cara Lombardo and Dana Cimilluca reported that Gannett and GateHouse are close to a deal; an official announcement could follow in the next few weeks. According to Nieman Lab’s Ken Doctor—who has long foreseen a major move to consolidate the media industry—the combined company would own 265 daily titles with a total print circulation nearing 9 million readers. That’s one of every six daily newspapers in America. “The hunt for scale seems to be ending with a merger of No. 1 and No. 2,” Doctor writes. Some scale.

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How would the merger work in practice? It’s not totally clear yet; both Gannett and GateHouse are keeping quiet. But experts including Doctor expect that GateHouse’s owner, New Media Investment Group, will acquire Gannett, rather than the other way around. That’s because New Media has access to serious money—it is run by Fortress, an investment group cofounded by Wes Edens, the billionaire co-owner of the Milwaukee Bucks and British Premier League soccer club Aston Villa. Poynter’s Rick Edmonds reports that Mike Reed, the current CEO of New Media, would continue in that role post-merger; Doctor, however, says that is not yet assured. (GateHouse has its own CEO, Kirk Davis, independently of New Media; Gannett, for its part, does not currently have a CEO following the retirement of Robert Dickey, but still plans to hire a new one, Doctor hears.) While such details, seemingly, have yet to be resolved, managers at both companies believe Gannett and GateHouse are mostly compatible. They already share investors. And as Edmonds writes, their strategies—protect big titles like the Arizona Republic (Gannett) and Columbus Dispatch (GateHouse) while gutting smaller ones—have dovetailed. Pending regulatory approval, the new entity could debut—under a single name—next year.

Mergers like this one are about consolidation. By joining forces, Gannett and GateHouse hope their titles will become more attractive to advertisers amid an industry-wide decline in revenue. On the flip side, consolidation also, usually, means cuts, as previously rival publishers combine corporate and editorial functions such as design and printing. Many business-side employees can expect to lose their jobs. Will journalists be cut, too? Edmonds’s “hunch” is that they won’t be—at least, not in large numbers, and not this year. (Since January 1, Gannett and GateHouse already cut more than 600 positions between them.) His prediction is heavily caveated, however, and other observers are even less optimistic. Doctor thinks newsroom cuts will continue, even though executives know the damage this does to their brands. On Twitter, other journalists and media-watchers reacted pessimistically to last week’s merger talk, too.

Until we know more, at least, it’s perhaps most useful to think of the prospective deal as another worrying symptom of an industry in an increasingly dire state. Readers of the combined company’s papers might not notice any difference, because vaulting editorial ambition is not really the point. “This isn’t about building a digital news juggernaut ready and eager to blaze a new chapter in American journalism… Simply put, these companies’ leaders think a megamerger buys two or three years—‘until we figure it out,’” the “it” here being how to profit off of digital, Doctor writes.

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“The biggest motivation here is really survival.” Chasteningly, survival, per Doctor, only means “the ability to maintain some degree of profitability somewhere into the early 2020s.”

Below, more on the media industry:

  • Taking stock: Media-watchers may have reacted poorly to last week’s Journal report about Gannett and GateHouse, but the market loved it. On Friday morning, Gannett shares jumped 19 percent. Yahoo Finance has more.
  • “Megaclustering”: Back in January, Nieman Lab’s Doctor contextualized the coming media “Consolidation Games” in a piece that turned out to be prescient. In May, Doctor wrote that we might even come to see a merger involving more than two big media companies.
  • An end to family ownership: The AP reports that the Sandusky Register, a newspaper in Ohio that has been family-owned and -operated for 150 years, has been sold. The buyer—Ogden Newspapers, a West Virginia-based newspaper chain—is also acquiring the Register’s sister title, the Norwalk Reflector.

Other notable stories:

  • On Friday, with the Trump–racism story swirling in the press, The Daily Beast’s Asawin Suebsaeng and Erin Banco noted the conspicuous absence from the conversation of Stephen Miller, the influential, hardline-nativist adviser to the president. As his profile has risen, the Beast reports, Miller has become “increasingly reclusive”: cutting off outside contacts, watching his words on the phone for fear of being taped, and eschewing the media. On Sunday, Miller broke cover in an interview with Chris Wallace of Fox News. “The president was clear that he disagreed” with supporters’ chants of “Send her back,” Miller said. Wallace interjected. “He was clear after the fact. Excuse me. He let it go on for 13 seconds.” (In other Trump–Fox news, Raj Shah, a former deputy White House press secretary, is joining the parent company of Fox News as a senior executive.)
  • In 2017, ESPN sparked a debate when it suspended Jemele Hill, then a star anchor, for tweeting about politics. Last week’s “Send her back” rally has brought ESPN’s no-politics policy back to the fore: Dan Le Batard said on air that his employer lacks “the stomach for the fight. We don’t talk about what is happening unless there is some sort of weak, cowardly sports angle that we can run it through.” ESPN has not publicly addressed the remarks, but has reminded staff that they should stick to sports, the AP’s David Bauder reports. In the LA Times, L.Z. Granderson, who also has a show on ESPN, defended Le Batard. “It’s hard to ‘stick to sports’ because sports doesn’t stick to sports,” Granderson writes. “Many of us understand the business of sports that leaders in the industry are charged with protecting. Le Batard is rightly questioning the cost of that protection.”
  • For CJR, Sky Lebron reports that young female journalists across the country have been harassed by “eerily similar” phone calls, seemingly from the same man posing as a media recruiter. The man asked Courtney Mims, a journalism student at the University of Florida, “about her hair color, her height, her weight, and then her bra size,” Lebron writes. “Finally, the man asked if Mims would be willing to fly to New York City for an interview—and if she would take her dress off.”
  • On Friday, management at BuzzFeed finally agreed to recognize an employee union, Bloomberg’s Gerry Smith reports. The agreement ends a lengthy standoff: last month, many staffers walked off the job in protest as negotiations stalled. The union is set to be certified this week. “While we remain disappointed that recognition took as long as it did, we’re excited to begin bargaining towards our first contract,” it wrote on Twitter.
  • In a bid to rehabilitate Jeffrey Epstein’s image following his release from jail in 2009, his representatives planted stories casting Epstein as a philanthropist in publications such as National Review, HuffPost, and Forbes, Tiffany Hsu reports for the Times. As new charges against Epstein unfold, a “staggering” list of his famous contacts could wind up being implicated, Vanity Fair’s Joe Pompeo writes. Epstein’s “black book”—obtained by journalist Nick Bryant and published by Gawker in 2015—offers a potential “road map.”
  • Graydon Carter, the former editor of Vanity Fair, has come under fire recently following allegations that he excised claims of abuse from a 2003 profile of Epstein, and was too cozy with subjects generally. Last week, Carter—who is currently launching Air Mail, a high-end newsletter—spoke with David Marchese of the Times Magazine: “I do not recall a single incident of what you call wheel-greasing in my 25 years” at Vanity Fair, Carter said. Some of Carter’s remarks, including about diversity, drew sharp criticism online.
  • Recently, an episode of NPR’s Here & Now drew heavily on a book by Sarah Milov, a historian, without ever mentioning her name. Caroline Kitchener reports, for The Lily, that Milov’s experience fits a trend: journalists often cite female academics’ ideas without attributing them, Kitchener writes. (ICYMI, Danielle McGuire, also a historian, wrote for CJR last year that news outlets should credit historians when drawing on their research.)
  • In Malaysia, coverage of a murky political sex-tape scandal has posed a challenge for Muslim reporters, Janet Steele writes for CJR. “Islam carries strict prohibitions against defamation, backbiting, and exposing shameful secrets,” Steele reports. “The Qur’an itself admonishes Muslims not only to ascertain the truthfulness of news, but also to investigate the character of those who come bearing it.”
  • And earlier this year, Amber A’Lee Frost, a host of the left-wing podcast Chapo Trap House, wrote for CJR’s print issue about her surprising love for the Financial Times. Recently, Frost sat down with Lionel Barber, editor of the FT, for CJR’s Monday Interview series. You can read their conversation here.

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Jon Allsop is a freelance journalist whose work has appeared in the New York Review of Books, Foreign Policy, and The Nation, among other outlets. He writes CJR’s newsletter The Media Today. Find him on Twitter @Jon_Allsop.