GateHouse Media brass touts Gannett deal in confidential message to employees

Al Neuharth in 1999. Photo (cc) by John Mathew Smith and http://www.celebrity-photos.com.

Following the completion of a long-anticipated deal to merge GateHouse Media with Gannett, GateHouse’s top two executives, Mike Reed and Kirk Davis, sent a confidential message to the troops, a copy of which was forwarded to me by a trusted source.

GateHouse and Gannett are the two largest newspaper publishers in the United States. By coming together, they have created a media colossus, albeit one whose decline continues apace. Reed and Davis’ message says in part:

We are incredibly proud of this team’s commitment to high-quality journalism and community leadership; this mission will remain at our core. The Gannett acquisition positions us as the leader in community journalism in the United States. In addition, we believe that together, we are well-positioned to address the profound changes our industry has faced in media consumption habits and advertising spend.

As you can see for yourself, the memo is mainly corporate boilerplate (and I don’t just mean the literal boilerplate on the second and third pages). For me, the main takeaway is that they say nice things about Gannett’s flagship, USA Today, which suggests that GateHouse — clearly the lead player despite being smaller than Gannett — isn’t going to mess around with Al Neuharth’s baby, at least not right away.

By the way, you’ll see a reference in the memo to BridgeTower Media, a name I was not familiar with. It turns out that’s the name for a GateHouse division that publishes B2B titles such as Massachusetts Lawyers Weekly.

The newspaper analyst Ken Doctor broke the news of the impending merger over the weekend. Keep an eye on the debt the combined company is taking on. Doctor estimates that it could be as high as $2 billion, which would seem to suggest further cuts ahead regardless of what kinds of cost efficiencies GateHouse-Gannett is able to achieve. As I wrote for WGBHNews.org two months ago, when it first became clear that the two companies would merge:

When a chain takes on debt to keep buying more properties and extracts revenues from its individual papers in order to satisfy shareholders, there is simply less money available for journalism than there would be with independent ownership.

I don’t think this was necessarily a terrible day for local journalism. MNG Enterprises, the hedge fund-owned chain formerly known as Digital First, was kept at bay, and that’s not nothing. But neither was it a good day. Committed local ownership is the key, and this merger moves us that much farther away from it.

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The Lowell Sun sports editor’s farewell column was taken down. Here’s every word of it.

Note: The hedge fund-owned newspaper chain MediaNews Group recently laid off several people at its Massachusetts papers, including sports editor Dennis Whitton of The Sun in Lowell. Whitton posted a farewell column on The Sun’s website and linked to it on Twitter, but when I tried to read it, it was gone — taken down (by management), he said in a tweet. (The column did appear in print.) An anonymous person with access to the CMS forwarded it to me, and I was able to verify that it was authentic. Here is Whitton’s farewell:

40 years of memories

By Dennis Whitton

“And then one day you find, ten years have got behind you. No one told you when to run, you missed the starting gun…”

— Pink Floyd, “Time”

LOWELL — It’s more like 40 years have got behind me. Where have they gone? What do I have to show for them? Can I get some of them back?

After 35 years as The Sun’s sports boss and another 5-6 behind that as a reporter, co-op, cub and otherwise, your intrepid correspondent will be leaving the building this afternoon for the final time.

Corporate cost-cutting is the culprit. Apparently I was making too much money to suit the suits, even with years of frozen wages. I didn’t realize I was making so much. I would have spent more.

Our assistant sports boss, Barry Scanlon, is in the same liferaft. That’s a real head-scratcher because Barry was the staff workhorse and he loved what he did for the most part and did it extremely well. Like me, he took maybe two sick days in 22 years. But he, too, was unknowingly making too much money.

My super-supportive wife Jan says I should use the term “let go” when talking about this stuff because it sounds better than “laid off.”

It probably also sounds better than fired, downsized, axed, canned, dumped, released and forced out, too. But any way you cut it, we’re down to the final countdown in a job I’ve held since before that ball went through Bill Buckner’s legs.

If I sound bitter you’re reading me wrong. With all the technology now in play it’s a young person’s game. I’ve probably overstayed my “sell by” date and now I’m looking forward to the next chapter. Of the book I’m reading. Sitting on the beach.

At least the ax wasn’t performance-related. I know that because the suits in question have no idea what Barry and I did or how we did it. In the end we were numbers on a spreadsheet. There is one major downside to the affair: According to the exit agreement, my discounted employee newspaper subscription will be rolled over to the regular customer rate at the end of the month. Damn.

Everybody knows newspapers are yesterday’s news, useful mainly to parents making scrapbooks for their high school heroes. In the Internet age there isn’t much we can tell you in the rag that you couldn’t have found out 12 hours ago. Advertisers know this, which is why newspapers are circling the drain. Which is why we’ve been let go, and a number of other good people before and after us.

Those were the days.

In looking back for this “farewell column” that the aforementioned Jan has pressured me to write, I realize nearly all of my most interesting times in the game came in the previous century. After that I became a cynical curmudgeon.

So in a nutshell, and with apologies for the overuse of the dreaded pronoun “I,” here are some of my memories:

One of my first assignments as a Northeastern (Class of ’80) co-op student in the Sun sports department was the 1978 Beanpot. Of course the Blizzard of ’78 hit and I was stuck wandering Boston for five days. At least I didn’t bail. A true newspaperman.

In October of that same year I was in the overflow “press box” on the left field roof at Fenway Park when Bucky Dent’s home run cleared the fence so close to me I could almost read Bowie Kuhn’s signature on the baseball.

I covered a lot of Red Sox, Bruins and Celtics games in that time period (much of it while still in college) and even went on several Sox road trips when Charlie (not yet Chaz) Scoggins was on vacation. Milwaukee, Baltimore, Cleveland, the Bronx, Arlington, Texas — all the garden spots. I rode the team buses (Luis Tiant was a hoot. Nobody talked to Yaz. The nicest guy was Jack Brohamer) and stayed at the team hotels.

Jack Costello, the editor whose family owned the paper, wasn’t averse to spending money, at least where travel was concerned (lunch was another matter). Now we don’t even go to the Garden because it costs too much to park.

In September of 1979 I was off to Syracuse for a feature story on Ayer’s Joe Morris, who was setting records for the Orange. From there I detoured down to Madison Square Garden where I covered Larry Bird’s first exhibition game with the Celtics. Still have the press pass to prove it.

In 1982, the paper sent me to Kitchener, Ontario, for three days to do a profile of junior hockey superstar Brian Bellows because the Bruins had the first overall pick in the draft. The stories came out OK, but the B’s went and drafted Gord Kluzak instead.

Jack sent me to Augusta National to cover five Masters Tournaments, ending with Tiger’s historic win in 1997. Got to play the course in 1990 and made birdie on the par-3 sixth with a rented Cannon 5-iron to six feet. Been living off that story ever since. Also got to take the ferry over to Long Island for two U.S. Opens at Shinnecock Hills.

Speaking of golf, in 1999 we were double-teaming the Ryder Cup in Brookline until I told Dave Pevear on Saturday night to go ahead and cover the Patriots’ game on Sunday rather than come to the U.S. funeral at TCC. A case of over-managing.

In 1980, I remember covering the horrendous clubhouse fire at Rockingham Park. It was the morning after I hit the last race, with Skip Row paying $10.20 (I kept the program).

Closer to home there was a story on Dave Boutin, a ULowell catcher from Pawtucketville who was dying of cancer. That one has always stuck with me. Dave and his mother Fleurette were a source of inspiration, even for a cynic. Absolute profiles in courage.

In 1987, they sent me to Pasadena, Calif., for Super Bowl XXI to do stories on Ayer’s Joe Morris (again), by now the Giants’ star running back. From there Mr. Costello had me drive down to San Diego to do a piece on Dennis Conner, who had brought the America’s Cup back to the States in historic fashion.

Dennis was not even in the country, but there was some good yachting talk with various officials at the leather-and-mahogany San Diego Yacht Club. Nothing like some good yachting talk on the company’s dime. At least I got to see the actual Cup.

Westford golfer Pat Bradley always made time for me whenever I needed a story. I attended her Hall of Fame induction dinner in Boston in 1991 (still have the commemorative wine glass) — and shockingly ran into her atop Mt. Washington last year after she had hiked up through thick fog at age 67.

The Golden Gloves were my beat through the ’80s and into the ’90s. I covered Micky Ward’s amateur career (and later Ward-Gatti II), saw Mike Tyson destroy a poor local kid named Jimmy Bisson in 42 seconds in 1983, got to know the tireless Arthur Ramalho and his saint of a wife, Rita, and went on five or six National Golden Gloves trips.

The most memorable of those was in Albuquerque, N.M., when Gloves director Norm Lombardi, “chaperone” Jack Baldwin and I hopped on a small plane to Las Vegas one night. I had to call Ramalho’s hotel room to find out what happened to the heavyweight we had fighting in the tournament and cranked out the story from some cheap hotel off the strip where you had to duck under the TV set when you entered the room.

Norm was obsessed with that casino game where you plug in nickels and they fall into the bin and push other nickels over a cliff for a possible 20-cent payout. Obsessed.

From 1983-85 I left to work with another mentor, Frank Dyer, at the Boston Herald. We had a blast, but there was zero chance to write so I went looking and Lowell happened to be in need of a sports editor. At age 28 I took the job.

Which brings me to the old Sun All-Star sports banquets, usually held at the Windsor (now Lenzi’s) in Dracut. By actual count I did three banquets a year for 23 years until they were discontinued in 2008 — corporate cost-cutting was the culprit.

Introducing shy high school kids and reading about their accomplishments to beaming parents for two-plus hours a night was the drill. I dreaded it at the time but looking back it was a true highlight of my career.

We were able to talk with a ton of area coaches and AD’s and athletes and parents, and it no doubt helped our high school coverage, which was always The Sun’s bread and butter.

There were usually guest speakers, too. Tom Glavine was extremely nervous and kept repeating himself. Now he’s as polished as they come. His girlfriend at the time may have been overserved. Reggie Lewis showed up with a severe burn on his right hand.

A popcorn accident in the kitchen, he told us. Wink wink. Nod nod. Jim Calhoun spoke when he was still at NU and not yet the legend he became at UConn. And there were plenty more.

I covered a Marvin Hagler fight one winter night at the Worcester Centrum and got caught again in a raging blizzard. Unwilling to wait in a long line for gas, I negotiated my beloved but totally unreliable MGB roadster back to Lowell on absolute fumes, barely able to see out the windshield. It finally gave up as I pulled into the old Rex parking lot astride the Sun office. Loved that car.

The Rex was where a Lowell cop moonlighting as a snowplow driver hit my car one night and left a note on the windshield. Thus began a long friendship with Jack Dolan.

So in the interest of wrapping this thing up, let me throw out some other names of people who have helped me along the way, made the journey more enjoyable, and in some cases even became friends:

Jack Costello, Frank Dyer, Mickey Sullivan, Jim Moriarty, Gene Manley, Ken Hughes, Kendall Wallace, Meg Buckley, Shawn Smith, Peter Flynn, Paul Daley, Chris Scott, Jim Campanini, Bill Biswanger, the entire group of sports personnel, past and present, who turned the deadlines we faced every single day into child’s play.

Then there is my aunt Joyce Dalton in Wilmington, who faithfully clipped all of my articles from day one, regardless of topic, passed judgment and sent them down the family line through Auntie Moo.

I know there are others whose names will pop into my head as I drive home after writing this. If that’s you, I apologize.

But as the great Blues Traveler song goes: “It won’t mean a thing in a hundred years.”

— 30 —

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Private equity ownership is devastating retail — just as it has destroyed newspapers

The Washington Post reports some startling figures about the role of private equity firms in the retail business. According to the Post’s Abha Bhattarai:

More than 1.3 million Americans have lost their jobs in the past decade as a result of private equity ownership in retail, according to a report released Wednesday. That includes 600,000 retail workers, as well as 728,000 employees in related industries. Overall, the sector added more than 1 million jobs during that period. [my emphasis]

This is exactly what has happened to the newspaper business over the past several decades. Yes, the internet has devastated the economic model, with advertisers fleeing to Craigslist, Google and Facebook. But that’s only part of the story. The other part is that corporate chains have hollowed out newsrooms in order to maximize profits at a time when what was really needed was investment and patience.

The most notorious of the corporate raiders is MediaNews Group, formerly Digital First Media, which is owned by Alden Global Capital. MNG has all but destroyed once-great papers like The Denver Post and The Mercury News of San Jose, as U.S. Sen. Elizabeth Warren notes in her proposal to re-regulate Wall Street. Cuts continue at MNG’s Massachusetts holdings, the Boston Herald, The Sun of Lowell and the Sentinel & Enterprise of Fitchburg. Meanwhile, The Berkshire Eagle is rebuilding after a group of local business people bought the paper back from MNG.

Consider, too, that independent regional papers such as The Boston Globe and the Star Tribune of Minneapolis are doing reasonably well, and others are taking innovative steps such as giving iPads to their readers to ease the transition to all-digital (the Arkansas Democrat-Gazette), operating under hybrid for-profit/nonprofit ownership (The Philadelphia Inquirer) or are pursuing pure nonprofit ownership (The Salt Lake Tribune).

For years we’ve been hearing that Amazon is destroying retail — yet, as the Post observes, that part of the sector not being strangled by private equity has continued to grow. Newspapers’ business problems are very real. But surely they would be shrinking a lot more slowly, and perhaps groping their way toward sustainability, if they weren’t being destroyed by our financial overlords.

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Proposed state commission would study the local news crisis and what to do about it

Photo (cc) 2019 by Dan Kennedy

Previously published at WGBHNews.org.

Can government play a role in helping to solve the local news crisis? Not directly, perhaps. But indirectly, government can shine a light on the issue, call attention to worthy projects that might inspire others, and offer some policy recommendations.

That’s the goal of House Bill 181, which would create a special commission to study local journalism in underserved Massachusetts communities. Sponsored by Rep. Lori Ehrlich, D-Marblehead, and Sen. Brendan Crighton, D-Lynn, the bill was the subject of a public hearing Tuesday before the Joint Committee on Community Development and Small Businesses. I was among those who testified; here are my prepared remarks.

The idea came about during an exchange I had with Ehrlich last fall. She was lamenting the shrinkage of local news coverage, which has been caused by a combination of factors. The internet, of course, has inflicted immense damage on newspaper advertising, which once accounted for 80 percent of a typical paper’s revenues. But corporate chain ownership has led to cuts even deeper than they otherwise would have been, since shareholders and hedge funds demand unrealistically high profits even as the underlying business model continues to deteriorate.

The commission would comprise 17 people — journalists, academics, and elected officials, as well as members of organizations representing African American, Hispanic, and Asian journalists. The proposal has not been without controversy. After complaints on Monday that the hearing had been scheduled with little advance notice, officials agreed to hold a second hearing sometime within the next few weeks. Questions have been raised about the composition of the commission as well. In her testimony, Ehrlich said that she and Crighton are open to suggestions as to who would ultimately be named to the panel. (As the legislation is currently written, I would be one of the members.)

Government hearings into the state of journalism are not new. Back in 2009, a U.S. Senate committee chaired by John Kerry held a hearing on the topic at which former Baltimore Sun reporter David Simon, creator of the HBO series “The Wire,” blasted the news business, saying that “raw unencumbered capitalism is never the answer when a public trust or public mission is at issue.”

Government action isn’t new, either. Earlier this month, legislation was filed in Congress to allow newspapers to negotiate collectively with social media platforms in the hopes of extracting some revenues for the use of their content. A second bill, which I had a small role in drafting, would make it easier for news organizations to claim nonprofit status. I should note, too, that public media organizations, including WGBH, benefit from government support in the form of tax-exempt status as well as grants from the Corporation for Public Broadcasting.

In 2018, New Jersey lawmakers created a 15-member Civic Information Consortium charged with allocating $5 million in public funds to pay for various local reporting projects. That strikes me as more ambitious and controversial than anything that is likely to be attempted in Massachusetts. Among other things, the shrinkage of local news outlets has been more severe in New Jersey than it has been here. Still, it serves as a precedent for state government playing some role in the future of local journalism.

According to a report by the University of North Carolina, about 1,800 newspapers have ceased publishing since 2004. Residents of many parts of the country live in what UNC describes as “news deserts” — that is, communities where there is no local source of news at all. A number of studies have demonstrated that such lack of coverage leads to social ills such as declining voter participation, an increase in political corruption, and even a rise in the cost of government borrowing because of, as the authors put it, “the lack of scrutiny over local deals.”

Things are not quite so bad in Massachusetts. There are no true news deserts here, according to the UNC report. But rather than uncovered communities, we have many undercovered communities. Cities and towns that may have been served by three or four reporters a generation ago are now lucky to have one. In some cases, a harried reporter has the impossible task of covering two or three towns. MediaNews Group (formerly Digital First), which owns the Boston Herald, The Sun of Lowell, and the Sentinel & Enterprise of Fitchburg, and GateHouse Media, which owns dozens of papers in Greater Boston and beyond, have been assiduously eliminating newsroom jobs and merging papers.

A news commission could provide a modest but crucial service. The commission could study the situation on the ground to determine where the gaps in coverage are. It could identify examples of good-quality local journalism that might be emulated elsewhere. It could recommend policy initiatives to encourage for-profit and nonprofit local news projects. One thing I would especially like to see is a plan to help local-access cable TV, an important informational resource that is facing its own financial challenges.

Local journalism is crucial to providing us with the information we need to govern ourselves. The one thing we can’t afford to do is nothing.

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The Wall Street Journal takes on the local news crisis

Wall Street Journal reporters Keach Hagey, Lukas I. Alpert and Yaryna Serkez weigh in today with a comprehensive overview of the crisis threatening local newspapers — a crisis that contrasts with the relative good health of the three national papers, The New York Times, The Washington Post and the Journal.

It’s well worth reading, even if there’s nothing especially new. Two quick observations:

1. Although the story pays lip service to the harmful effects of chain ownership, it doesn’t quite get at the fundamental problems: the debt amassed to build the chain, the lack of investment in technology, and the drain created by having to export a good chunk of revenues to some distant corporate headquarters.

2. The Journal also calls The Boston Globe a “notable outlier” among regional papers for its relative success in building digital subscriptions and maintaining a decent-size newsroom. The obvious if unmade argument is that other papers could do the same with committed local owners.

Globe owner John Henry is not perfect, but MediaNews Group (the new name for Digital First Media), Gannett or GateHouse would likely have cut the newsroom of roughly 220 people by another 100 or so.

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Flipping the deal: Alden hedge fund may be looking to sell Digital First to Gannett

Recently we learned that the worst of the bottom-feeding newspaper chains, Digital First Media, was seeking to acquire Gannett Co., which owns USA Today and about 100 other publications. Now the New York Post is reporting that the deal could flip the other way: Alden Global Capital, the hedge fund that owns Digital First, might sell to Gannett instead.

On a 1-10 scale of whether this is good news or bad news, I’d give it a 5.1. As I argued in a recent column for WGBHNews.org, anything is better than Digital First. No doubt Gannett ownership would be a marginal improvement for Gannett’s three Massachusetts papers — the Boston Herald, The Sun of Lowell and the Sentinel & Enterprise of Fitchburg.

But Gannett virtually invented the business model for chain newspapers of cutting journalism to the bone while driving up profit margins for the benefit of Wall Street. Just last week Gannett tore through another round of cuts at its newsrooms across the country. So let’s not get too excited.

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There are no good guys in the battle between Gannett and Digital First Media

Ben Bagdikian had Gannett’s number (1976 photo via Wikipedia)

Previously published at WGBHNews.org.

In late 2015 I paid a visit to Burlington, Vermont, to survey the damage wrought by Gannett Co., the newspaper chain that owns the Burlington Free Press. Paid weekday print circulation at the state’s largest daily had fallen from about 50,000 to 16,000. The editorial staff, which at one time was close to 60 journalists, had shrunk to around 25.

“Obviously it’s a little tougher and you do have to pick your spots,” the legendary Free Press reporter Michael Donoghue, who had just retired, told me. “We were always thought of as the newspaper of record because everything would be in there. I’m not sure there’s a newspaper of record technically in Vermont anymore.”

To be fair, what happened to the Free Press was not much different from what has happened to newspaper after newspaper across the country. Fortunately other media organizations in Vermont arose to fill the gap — Seven Days, a vibrant alt-weekly; VT Digger, a well-funded statewide nonprofit investigative project; and Vermont Public Radio, which had boosted its local coverage. Still, the Free Press and its corporate overlords at Gannett had failed at their mission of holding government and other institutions to account.

I offer this story because now we are being asked to save Gannett from the ravages of something much worse. And we should. The Wall Street Journal’s Cara Lombardo reported on Sunday that Digital First Media, the Death Star of newspaper chains, is seeking to acquire Gannett, which owns USA Today as well as about 100 other publications. Digital First owns about 50 dailies, including three in Massachusetts: the Boston Herald, The Sun of Lowell, and the Sentinel & Enterprise of Fitchburg.

Why should we care when Gannett has been doing such a poor job? Because things can always be worse. Gannett ownership has been awful in the usual way. Digital First, controlled by the hedge fund Alden Global Capital, is uniquely awful. Its decimation of the papers it owns sparked what proved to be a futile insurrection last year at its flagship, The Denver Post. Newsrooms have literally been closed, with journalists forced to fend for themselves, from the Fitchburg paper to, most recently, The Record of Troy in upstate New York.

Executives at chains such as Gannett and GateHouse Media, hardly beloved at the local level, nevertheless seem to be trying to figure out a long-term plan. Gannett has remained committed to investigative reporting. GateHouse has set up a business-services and marketing division known as ThriveHive, which, if nothing else, suggests that the company is committed to staying in business. Digital First, by contrast, appears to be engaged in what economists refer to as “harvesting” — that is, taking as much money out of the shrinking newspaper business as possible before closing the doors and turning off the lights.

“The dirty little secret that DFM [Digital First Media] learned is that — at least for now — it can sell longtime readers an inferior (or, to use the technical term, crappier) newspaper and only 10 percent each year will cancel,” writes Philly.com columnist Will Bunch. “Do the math, though, and it’s clear that much of America outside the biggest cities will become news deserts by the early 2020s.”

And to think that at one time Gannett was considered the poster child for greedy corporate newspaper chains. In his classic series of books dating back to the 1980s called “The Media Monopoly,” the late media critic Ben Bagdikian labeled Gannett as “the largest and most aggressive newspaper chain in the United States,” noting that the profit margin at some of its local papers was an “astonishing” 30 percent to 50 percent. Bagdikian also described Gannett as “an outstanding contemporary performer of the ancient rite of creating self-serving myths, of committing acts of greed and exploitation but describing them through its own machinery as heroic epics.”

So here we go again. Gannett, as bad as it has been for the communities it serves, is being held up as an exemplar of local journalism that must be saved. Talk about defining deviancy down. The newspaper analyst Ken Doctor, writing at the Nieman Journalism Lab, reports that Gannett executives may seek to wriggle out of Digital First’s hostile takeover attempt by delivering themselves into the arms of Tribune Publishing, the company formerly known as tronc. Tribune, like Gannett, is known more for its cost-cutting than for its journalism. But anything is better than Digital First.

There is a certain irony in the dilemma now facing Gannett. The company’s model of downsizing newsrooms and driving up profits helped create the crisis that faces the newspaper business today. As newspapers became less comprehensive and less interesting, they lost readers, thus prompting repeated rounds of cuts to keep those profit margins up. Not to push this theory too far — the decimation of advertising-funded news at the hands of digital media is a much larger factor. Still, Gannett-style slash-and-burn management played a role.

Now Gannett is reaping what it sowed. We should all hope that Gannett’s board is successful in fighting off Digital First. But we should also understand that this is strictly a choice between the lesser of two evils. Democracy deserves better.

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Four dailies north of Boston sold to Alabama retirement fund

The CNHI newspapers have been sold to Retirement Systems of Alabama. CNHI’s holdings in Massachusetts include four daily newspapers — The Eagle-Tribune of North Andover, The Daily News of Newburyport, The Salem News and the Gloucester Daily Times — as well as several non-daily publications.

This is good news, with reservations. CNHI’s ownership has long been complicated; the Alabama buyer has been involved for years, so this doesn’t seem like much of a change. CNHI has run the papers on the cheap, but the quality remains good. I know that staff members were concerned that the papers might be sold to Digital First Media or GateHouse Media, hedge-fund-owned chains that slash their properties to the bone. So it could have been worse.

Earlier: “Eagle-Tribune and affiliated papers north of Boston put up for sale” (June 25, 2018).

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Local newspapers are dying. And hedge funds are making it worse.

Previously published at WGBHNews.org.

The state of local journalism is grim — and the hedge funds that have scooped up hundreds of newspapers over the past decade have made things even worse than they otherwise might be.

That’s the conclusion of a new report from the University of North Carolina. Titled “The Expanding News Desert,” the study finds that corporate chains controlled by private equity and hedge funds cut more deeply, shut down more papers, and demonstrate less regard for journalism’s civic mission than was the case with “the historic practices of traditional print newspaper companies.” Here’s how the report’s author, Penelope Muse Abernathy, the Knight Chair in Journalism and Digital Media Economics at UNC, describes the strategies pursued by what she calls these “new media barons”:

The standard operating formula often included aggressive cost-cutting, the adoption of advertiser-friendly policies, the sale or shuttering of under-performing newspapers, and financial restructuring, including bankruptcy. At the most extreme, their strategies have led to the closure of hundreds of local papers and diminished the important civic role of newspapers in providing reliable news and information that helps residents of a community make important decisions about governance and quality of life issues.

This has enormous implications for Greater Boston, where two leading hedge-fund-owned chains, GateHouse Media and Digital First Media, already control most of the local papers, and where a third, CNHI, has put its four dailies in the Merrimack Valley and on the North Shore up for sale. Those papers — The Eagle-Tribune of North Andover, The Daily News of Newburyport, The Salem News, and the Gloucester Daily Times — are at risk of falling into the hands of either GateHouse or Digital First, which are likely to double down on the deep cuts that have already been made.

Digital First, controlled by Alden Global Capital, currently owns three papers in Massachusetts — the Sentinel & Enterprise of Fitchburg, The Sun of Lowell, and its most recent acquisition, the Boston Herald. Although I’ve written about Digital First on several occasions previously (for instance, see this), I was struck in reading the UNC report by just how bad things are.

Digital First’s profit margin in 2017 was 17 percent, far higher than that of other newspaper companies, including GateHouse. And it achieved that margin by destroying newsrooms — in some cases literally. The newsroom at the Fitchburg paper was shut down last year, with the paper’s journalists being told to work out of their homes. In the suburbs of Philadelphia, reporters at two Digital First papers “must work remotely,” Abernathy writes, “because the Pottstown Mercury’s mold-infested newspaper building has been condemned.”

The top-line numbers at Digital First are breathtaking. Between 2012 and ’17, employment at 12 Digital First papers decreased by 52 percent, from 1,766 to 849, according to a survey conducted by the NewsGuild. Yet as bad as that period was for the newspaper business as a whole, the Bureau of Labor Statistics found that total newspaper employment dropped by about one-fourth from 2012 to 2016 — only about half the rate of journalistic job destruction at Digital First.

GateHouse, meanwhile, has expanded massively in recent years — from 379 newspapers with a total circulation of 3.1 million in 2014 to 451 papers and 4.3 million in circulation today. The company controls well over 100 community weeklies in Greater Boston and environs as well as dailies such as the Providence Journal, the Telegram & Gazette of Worcester, The MetroWest Daily News of Framingham, and The Patriot Ledger of Quincy. According to the UNC findings, GateHouse’s decimation of the ProJo, which it purchased in 2014, has been especially brutal:

By July 2018, newsroom employment had been cut by 75 percent, bringing the staffing levels below 100. According to the NewsGuild-CWA, there were fewer than 20 reporters and columnists responsible for covering both state and city government.

GateHouse has also embarked on a strategy of selling business and marketing services to advertisers through subsidiaries of its hedge-fund owner, Fortress Investment Group — “raising questions,” as the report puts it, “about the role of a local newspaper’s sales department in supporting local businesses.” Readers are fleeing GateHouse’s shriveled papers. Revenues, profits, and share prices are all down. All of that calls into question, Abernathy writes, whether GateHouse’s aggressive acquisition strategy is sustainable.

The depredations of Digital First and GateHouse are taking place amid the cratering of local journalism nationwide. Among the UNC report’s findings:

  • About 60 daily newspapers and 1,700 weeklies have closed since 2004, an overall decline of about 25 percent.
  • Nearly 200 of the 3,143 counties in the United States no longer have a newspaper. More than 2,000 counties have no daily paper.
  • Residents in these “news deserts” — that is, areas without newspapers — “are generally poorer, older and less educated than the average American.”

What can be done about the decline of local journalism and the rise of predatory hedge-fund newspaper chains? There is no one answer. The report notes that LION Publishers (Local Independent Online News) counts about 525 local digital news operations, both for-profit and nonprofit. Some, such as the New Haven Independent, The Batavian of Batavia, New York, and VT Digger, a statewide project based in Montpelier, Vermont, do an outstanding job of covering local and regional news. Yet many such operations are tiny and, as the report notes, a 2015 survey found that one in four failed. Although you could argue that three in four surviving is actually a pretty good track record, that’s not nearly enough to water the news deserts that are spreading across the countryside.

“There is a compelling need,” Abernathy writes, “for philanthropic foundations, community activists, local government, concerned citizens and potential founders of nonprofit news organizations to work together from the beginning to identify communities most lacking coverage and the funding needed to sustain a start-up news organization in those communities.”

That would be a good start, as would programs to boost civic and media literacy, another recommendation of the report. Without quality local news, it’s hard for people to participate in their communities in a meaningful way — or even to understand why they should. Corruption runs amok. Apathy reigns. And the underpinnings of democracy rot away.

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Once again, Digital First swings the ax at the Boston Herald

Digital First Media’s latest round of cuts at the Boston Herald was the talk of local media Twitter on Thursday. The most shocking was that photographer Mark Garfinkel, perhaps the paper’s best journalist, was among those told that his services were no longer needed.

Disclosure: Mark is a friend who has spoken to my students on several occasions. He worked as a stringer at the former Beverly Times (long since merged with The Salem News) near the start of his career — and the photo editor at that time was none other than Mrs. Media Nation.

Both Jack Sullivan at CommonWealth Magazine and Jon Chesto of The Boston Globe have weighed in on the cuts. Sullivan puts the body count at about 20; Chesto says 14. Chesto also reports that the Herald now employs about a total of 100 people, less than half the 240 who worked there before former owner Pat Purcell declared bankruptcy.

Some of the cuts don’t necessarily diminish the Herald’s journalism. The copy editing jobs, for instance, are being outsourced to a Digital First facility in Denver. (Not that we should expect distant copy editors to do as good a job as local people who know the area.) Overall, though, this is terrible news. Garfinkel was one of two photographers let go on Thursday. How can you have a viable tabloid without great photography?

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