GateHouse’s Daniels wants it all

GateHouse Media New England president and CEO Rick Daniels has sent out a take-no-prisoners message to his staff that makes it sound like he can’t wait to capitalize on the Boston Globe’s woes.

Daniels, by the way, is a former president of the Globe.

Several sources within GateHouse passed Daniels’ memo along to Media Nation a little while ago. I can only assume that Daniels is itching to get this out there. Anyway, here it is:

Colleagues:

While the severe trials of major daily newspapers are fast becoming old hat, the news from our own backyard since last Friday has been far more jarring. There have been, and continue to be countless stories and posts that report or comment on the fate of the Boston Globe. We don’t know, and won’t for at least a while what the ultimate outcome for the Globe will be. After my many years there, I know there are many talented people working hard to find answers and solutions.

Obviously, what happens to Boston’s leading newspaper and advertising market share leader has a powerful effect on everyone in our business, as well as newspaper readers and advertisers. Whatever becomes of the Globe, our core task is to secure the health and strength of GateHouse Media New England, upon which all of our jobs depend. A few thoughts come to mind that I would like to share. We are working on dates for employee meetings in the near future, and the senior management team and I look forward to discussing the business with you, telling you more about our plans and actions and fielding your questions. Just three core thoughts at this moment:

#1. The Boston Globe is HARDLY alone in being afflicted by a significant decline in advertising. In the 4th quarter of 2008, concurrent with the meltdown in the financial markets, GHMNE saw our revenues worsen from results that were starting to be heartening. The 1st quarter was worse yet. Further, almost every publishing entity with which we share information has experienced a similar trend. As April progresses, we’ll know better if the slightly better results we saw in the first week are merely a blip, or the beginning of a positive trend. It’s pretty clear that we are all a long ways off from satisfactory revenue and cash flow results and whenever the recovery starts, it will be gradual.

#2. To use a stark term, the main objective of virtually all publishers now, and just about ANY business these days is “survival”. Most businesses have implemented the most stringent expense reductions — ever. We have been on this path for a long time, and as we all know, our cost reductions have been aggressive, but the savings have been sizable — and much-needed. In 1st quarter of 2009, our expenses are lower than the 1st quarter of 2008 by about 12%. While these reductions have been essential, they have not even offset ½ the downdraft in advertising, esp. in YTD 2009. We, all GateHouse divisions, and virtually all media companies, will have to continue to push ourselves — hard — and discover ways to tighten up even more. We have, together, and despite earlier reductions, still found ways to put out about 250 print and digital products that — provably — continue to attract a huge base of readers and advertisers. The key will be to preserve enough strength to not only deliver GHMNE’s value proposition — truly unique local news and information for readers and viewers and a large, attractive audience for advertisers — but also capitalize upon major opportunities we see before us.

#3. GHMNE certainly has challenges, BUT we have truly extraordinary opportunities as well. Just a few statistics to highlight our strengths and assets include:

  • GHMNE’s print audiences has grown (per Scarborough) while others have declined
  • 1.7 million weekly readers in MA — almost 500K more than the next closest competitor
  • 2.2 million unique visitors to our sites in March — up 58% from March, 2008
  • Over 20 thousand advertisers in 2008 — from tiny local shops to major national companies

These enviable facts (and so many others that I didn’t cite) are the result of a sustainable business model that is executed by all of us in a spirited and efficient way. We attract a huge base of readers, viewers and advertisers — both in print and online. As for core opportunities, we have — for many weeks now, and even prior to the recent news — been having very substantive discussions with our advertisers to uncover their needs and the opportunities we can seize in addressing their needs. Concerns about the future stability of other media competitors in the Boston market are being expressed to us, more nakedly, urgently and earnestly than ever.

The GHMNE senior management team believes we are likely on the cusp of a major, even “seismic” shift in the eastern Mass media markets that will have untold readers, and millions of advertising dollars up for grabs — but only during a short window that could be limited. Our aim is to grab our FULL share. This will take preparation, cohesion, and continued focus on preserving adequate cash flows when they are very difficult to secure. We have NO doubts we are ready for this test.

In closing, the senior management team wishes you and your families rest and peace during this holiday time, and we thank you for your continued commitment, constancy and support. We look forward to seeing you at upcoming employee meetings in the near future.

Rick Daniels
President and CEO, GHMNE

No doubt there’s a feeling of schadenfreude over at GateHouse’s Massachusetts headquarters in Needham. After all, it was just a few months ago that GateHouse and the New York Times Co. reached an out-of-court settlement over the Globe’s aggressive use of GateHouse headlines and ledes on its hyperlocal Your Town sites — a project headed, ironically enough, by a former GateHouse employee, the Globe’s Bob Kempf.

But all is hardly sweetness and light at GateHouse, as Daniels concedes in his memo. “GateHouse Annual Report a Tale of Loss, Indebtedness” is the headline on Mark Fitzgerald’s piece yesterday on the Web site of the trade magazine Editor & Publisher. And earlier this week, GateHouse announced it would close seven free shoppers in Southeastern Massachusetts and on Cape Cod.

Nevertheless, as a business, GateHouse might actually be healthier than the Globe right now.

5 thoughts on “GateHouse’s Daniels wants it all

  1. NewsHound

    Daniels “sustainable business model?””untold readers, and millions of advertising dollars up for grabs” . . . . undertakers during the plague wouldn’t be happier.

  2. acf

    Advertising is down everywhere. The pool of ad dollars Gatehouse can get from the Globe’s problems is minuscule. Also, I have some small items to sell up on the North Shore. I’m going to CraigsList. No cost, easy to do and check up on, and I know that lots of eyes will see it. Why pay a newspaper for the service with more money, limited circulation, and limited publishing time.As for reading the paper instead of the Globe goes. They’re the amateur hour when comparing the quality of the coverage, the writing, and the breadth of coverage. Of course, in the little worlds they occupy, they do a good job, just not at what I expect from the Globe…serious coverage of statewide, national, and international events.

  3. lkcape

    What’s wrong with Gatehouse trying to succeed in a market in which The Globe is failing?The opportunities ARE there.As for the quality of the material offered? Well, The Globe is rapidly searching for the lowest common denominator in terms of quality, and succeeding beyond their wildest expectations. Won’t be long before it is a toss-up between the two.And who knows, Gatehouse might just step up to the plate and do a good job.Certainly The Globe is not making much of an effort to correct their journalistic quality problems…as witnessed by their increasing reliance of shop-worn AP coverage and “features” that are more advertisements than critical views.If The Globe cannot restore their quality — and their profitability — why not just let them go. Ainsley and Baron don’t seem quite up to the jobs at hand. Let someone else have a crack at it.

  4. Dave Ledger

    Gatehouse’s days are numbered also. 1. Managed to outsource 300 employees press and inserting jobs from the Patriot Ledger and Brockton Enterprise to the Boston Globe.2. Assumed 1.2 billion in debt in a little over a year buying up newspapers across the country that were already losing money and circulation.3. Looking for a new place to print 2 of your biggest daily papers now that the Globe could be closing.4. Stock dropping from 24 dollars a share to 8 cents a share and being delisted from the NYSE.5. Should have listened to the blue collar workers instead of the guys in the suits Mr. Daniels.6. From all of us that you laid off and dedicated more than 20 plus years to the papers we worked at.7. Priceless.

Comments are closed.