By Dan Kennedy • The press, politics, technology, culture and other passions

GateHouse’s crushing debt

Old friend Steve Syre analyzes GateHouse Media in today’s Boston Globe and comes to a conclusion that’s sadly familiar when looking at newspaper companies these days: its papers, though not in great shape, would be doing fine if it weren’t for the corporate debt under which they’re staggering.

Not to keep linking to a story I wrote on GateHouse for CommonWealth Magazine last fall, but it’s relevant.

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  1. Greg Reibman

    Perhaps Syre should take this up with his shrink but it sure seems to me that the last sentence in his last paragraph, has a lot more to do with his employers, instead of anything GateHouse has done or is doing….”The GateHouse papers have serious problems of their own. That’s true of every newspaper, including The Boston Globe. But the people working at and managing GateHouse’s papers didn’t make the decisions that put their parent in such a deep, deep hole.”

  2. Dan Kennedy

    Greg: Thanks for checking in. As a resident of the North Shore, I think it’s interesting to think about how our GateHouse papers might be in different shape financially if Wasserman hadn’t sold to Harte-Hanks, if Harte-Hanks hadn’t sold to Fidelity, if Fidelity hadn’t sold to Purcell, and if Purcell hadn’t sold to GateHouse, with the debt reaching high and higher levels at each step along the way.

  3. Greg Reibman

    So true Dan. It is a little like the old lady who swallowed a fly. And yes, I remember how that story ends. On the other hand, an economy of scale has allowed us to keep our presses running, cover health insurance, build dynamic Web sites, arm reporters with point and shoots, train them to use video, and a lot of other things that small mom and pop publishers struggle with.

  4. lkcape

    Yes, the debt load is the killer factor. But the underlying reason is that “management” assumed that their projections of revenue streams and/or their assumptions on being able to bail-out of the debt were correct.Much like in a Ponzi scheme, the last ones holding the paper when the bubble bursts are the ones that pay the price.Both owner/operators and the unions (who are really the managers of the labor component) share the blame of the erroneous assumptions.

  5. Ron Newman

    Unions? I don’t think most GateHouse papers are unionized.

  6. NewsHound

    Dan – North Shore Weeklies was not sold to Harte-Hankes nor was it actually sold to Fidelity but it eventually became Fidelity property through evolution.It was sold to a group of investors. Fidelity was a minority. Younger members of the Harte family were blessed with a family trust and also invested. And so did venture capitalists such as Boston’s Greylock.Some of the stock was gifted, too, to area universities. As time went along more newspapers were added with Fidelity supplying the investment cash and through this evolution Mr. Johnson gained ownership and control.Importantly, though, back to the point you’re making – if North Shore Weeklies continued along without a sale there would be no cause for debt nor need for profit to service debt and as long as it could otherwise break even your town would continue with a healthy, independent weekly newspaper.

  7. David Rogers

    That’s a great point, NewsHound, regarding where we might be if CNC hadn’t been sold left and right. But Greg is right, it is because of GateHouse that we have been able to learn new skills, look at local news in a different light and basically breath some needed fresh air into how we cover our communities.

  8. acf

    If these companies hadn’t tried to become empires through acquisition, they wouldn’t have the debt that they’re drowning in today, and might have been in better shape to ride out the recession. There still would be the issue of the changing face of newspaper publishing, but without having to deal with the nut of debt, everyone’s outlook would be brighter, if not clear.

  9. NewsHound

    acf – your description is right on.When newspapers were solid but not necessarily extraordinarily profitable and it was a violation of the business to incur much debt placing the semi-public institution in jeopardy, they were careful about the use of space and focused more on news and less on analysis and issues.The problem with many publishers years ago was not debt, but staying sober. But, at least they knew they had to first and foremost publish the news and they wouldn’t think of running a giant picture with lots of superfluous wallpaper or leaving lots of white space, drunk or sober.We wonder if some of these new models of focusing more on issues and space filler and less on news and numerous other distractions have hindered profit, durability and financial independence in which newspaper publishers thrived a half century ago.

  10. Greg Reibman

    …or acf. They would have gone out of business long ago.

  11. Dan Kennedy

    NewsHound: Somewhere in the back of my mind I knew that Wasserman had sold to some offshoot of Harte-Hanks, not Harte-Hanks per se. I should have been more careful, and thanks for the correction.

  12. NewsHound

    Dan – it was the point you were making that the focus has been on playing with other people’s money instead of sincerely publishing newspapers that is important.North Shores Weeklies is just one example. If the Old Colony Memorial and Wareham Courier had stayed in its old building in downtown Plymouth and remained in the Bittenger family it most likely would still be providing profit to descendants and the towns still might have an award winning newspaper. Its first evolutionary move to good newspaper publisher Prescott Lowe was not so bad but GateHouse entered slow suicide with its debt for this acquisition.And the same applies overall with the Herald News in Fall River owned by the Kelly family the same as Mr. Wasserman’s Ipswich Chronicle and many other newspapers.

  13. luscious-purple

    It just makes my blood boil when the commenters (not here but on the original story) drag in all the old canards about the liberal media and drag in the NY Times. I see the GateHouse saga through the filter of the town weeklies, where I used to work (three different papers over the years).In a lot of these towns, issues don’t always split into the “left” and “right” of contemporary political rants — it’s more like: Can we afford to renovate the middle school? Should we fence off part of the town park for dogs? What happened in that big fire in the business district recently? Which school principal is retiring?At newspapers that are now part of GH, I personally worked with people ranging from borderline-socialist to conservative Republican. Most were between the two extremes, of course. But we were all trying to cover the towns in the best way we could.I really feel for the non-unionized weekly journalists who are working their tails off with probably fewer resources than we had 20 years ago. I’ll bet a lot of their readers care only about the towns in which they live and constantly carp about common pages with other GH papers and whatnot. I’m concerned that this debt is eventually going to force the higher-ups to try combining some of the town papers (like Concord-Lexington-Lincoln, Billerica-Burlington-Wilmington, etc.). That would be disastrous for what is left of their “product.”

  14. NewsHound

    luscious-purple – you have it right that many weekly newspaper readers wanted content confined to their own town. Certainly these people had other interests and as such read area daily newspapers, magazines and books. But the self-obeyed rules of many weekly newspaper editor-publishers was to publish only the news within their own town but it included all the news – the school honor roll, school lunch menu, police blotter, birthdays regardless of age, social visits, flag bearers at scout meetings and progress on merit badges, etc.

  15. Jenn

    I'll confess to learning some interesting skills through GateHouse's acquisition of CNC. And I'm definitely using them now — my GateHouse job died last fall — to build a small town daily news site ( and keep it local, local, local. Blogging, YouTube-hosted video with a point-and-shoot camera, various social media? Got it covered.

  16. Dan Kennedy

    No question that GateHouse has been aggressive in pushing its reporters to learn and use new-media tools. It's been one of the chain's real strengths.

  17. Greg Reibman

    Luscious-purple: We've been forced to make some really tough cost cutting choices, but your fears of merged papers (like, as you suggest "Concord-Lexington-Lincoln, Billerica-Burlington-Wilmington, etc.") are unfounded.GH weekly papers have become more hyperlocal over time and so have our Web sites. What you are describing has been the Globe's strategy, not ours.

  18. Ron Newman

    A dissenting view: combining some of the neighboring weeklies might actually produce a more compelling paper product. I live in Somerville right at the Cambridge city line. I'm interested in news from both cities, but I don't want to have to buy two different papers each week. Would a Camberville Chronicle-Journal be a more interesting read for residents of both cities?

  19. Ron Newman

    Also, why does GateHouse continue to publish both the Cambridge Chronicle and the (now largely content-free) Cambridge Tab?

  20. luscious-purple

    I believe the Chronicle-Tab thing is historical. The Chronicle is the "real" newspaper that is "the oldest continuously published weekly newspaper in the U.S.," according to its Twitter bio. The Tab newspapers were founded in the late 1970s as a free-circulation thing, almost like the "new media" of the day. I remember interviewing the Tab's founders in 1979 for the newspaper management class I was taking at BU.I totally agree that most readers love the school lunch menu, wedding announcements, obits, etc. In my earlier comment I was thinking about the more time-consuming reporter-generated work such as covering the school board, tracking down the occasional rumor that a municipal employee took a town-owned car to Florida for a family vacation, etc.

  21. Randeg

    Quite a few papers are in trouble today and Gate House Media is not immune to this. While their papers are not all what we want it to be still without the crippling debt, they may have been going on forward. I think the lesson learned here is to manage so well as not to go on those massive debts. Evelyn Guzman (If you want to visit, just click but if it doesn’t work, copy and paste it onto your browser.)

  22. Ron Newman

    Initially, the TAB was a competitor to the Chronicle, and it was nice to have two different points of view in Cambridge. But it has made no sense to keep the TAB going once it came under common ownership with the Chronicle — first under Fidelity, then Herald Media, and now GateHouse. That's over 16 years of redundant publishing.

  23. Steve

    Ron – just because one publisher owns both papers, it doesn't necessarily follow that they are redundant. For years in Dayton,OH one publisher owned both the Journal Herald and the Daily News. The JH was a morning paper, and conservative in editorial tone. The DN was an afternoon paper, and liberal in tone.So it's possible to do it. But they merged in the mid-80s for financial reasons, so maybe it's not feasible any more.

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