Rick Daniels will step down as president of GateHouse Media New England at the end of the year. GateHouse publishes about 100 community newspapers in Eastern Massachusetts — mostly weeklies, but also a few medium-size dailies, including the MetroWest Daily News of Framingham, the Patriot Ledger of Quincy and the Enterprise of Brockton. The company also runs about 150 Wicked Local websites.
In my rather minimal dealings with him, Daniels, a former Boston Globe executive, struck me as amiable and wanting to do right by local journalism. The same is true of Kirk Davis, president and CEO COO of all GateHouse properties, who will take over Daniels’ responsibilities on an interim basis.
But for years now, GateHouse — which runs more than 400 publications and websites from its national headquarters in suburban Rochester, N.Y. — has been staggering under the burden of $1.2 billion in debt. In August 2011, the Rochester Business Journal reported that GateHouse was “the most highly leveraged of any publicly traded newspaper company,” with debt nearly 14 times cash flow.
And just a few months ago, Jack Sullivan of CommonWealth Magazine wrote that GateHouse itself had raised the possibility of bankruptcy in its annual report.
Thus in recent years we’ve seen a number of high-profile executives lopped off the payroll, including digital-publishing chief Howard Owens, now the publisher and editor of The Batavian, a widely admired local news site that he actually started for GateHouse, and Greg Reibman, former publisher of GateHouse’s Greater Boston papers, now president of the Newton Needham Chamber of Commerce. Also leaving was Kat Powers, managing editor of GateHouse Media New England, now director of communications for the American Red Cross of Eastern Massachusetts.*
Daniels is supposedly leaving GateHouse to pursue unspecified “investment and advisory roles for media companies.” At least no one is claiming that he wants to spend more time with his family.
“There’s a lot of pretty interesting deals that are out there and I’ve been approached by some folks who would like to do some of those deals,” Daniels told the Patriot Ledger. “They seem to have some interest in having operators with some experience.”
My guess is that if Daniels is quickly replaced, then his leave-taking was voluntary. And if Davis is still interim president six months from now, then Daniels’ departure should be seen as a cost-cutting move.
Five years ago I wrote about GateHouse’s debt woes for CommonWealth and talked pretty extensively with Davis. It’s been a long time, but the issues haven’t changed all that much.
Here is Davis’ email to the troops, a copy of which was forwarded to Media Nation by a trusted source earlier this afternoon:
I’m writing to explain some important news that is “public” today.
Rick Daniels, who has presided over our Massachusetts operations for the past 5 1/2 years, will be leaving his post at the end of the year. Rick plans to pursue investment and advisory roles to a variety of media companies.
I’ve had the pleasure of working with Rick throughout his career at GateHouse Media. He’s proven himself to be a very capable and accomplished executive, one who has led an accelerated transformation of our newspapers and web sites through very difficult economic times. Rick departs with our deepest gratitude and admiration and has graciously agreed to continue to provide any assistance I may need in order to ensure a seamless transition.
I will assume responsibility for our Massachusetts group on an interim basis. I’ve been affiliated with our operations in Massachusetts for many years and have always appreciated the support I’ve received from employees. I’ll enjoy reconnecting with staff.
In light of Rick’s departure, I will appoint a few key executives to assist me and our strong management team in Massachusetts through this transitional period. Look for that announcement before January 1.
Again, it has been a pleasure working with Rick. We are extremely grateful for his leadership the past 5 1/2 years and wish him much continued success.
*Correction: Kat Powers did not lose her job at GateHouse, as I originally wrote. Rather, she left the company to take a position with the Red Cross.