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Slashing and burning local news outlets proves profitable for Gannett

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On February 24, 2023

In Local News

Photo (cc) 2008 by Patrickneil

Back before GateHouse Media morphed into Gannett in 2019 and assumed its corporate identity, I believed the company was in it for the long haul. Don’t get me wrong — GateHouse was always obsessed with cost-cutting and was a fairly awful steward of the papers it acquired. But its executives seemed to have convinced themselves that ugly was the only way to win, and that winning meant surviving.

No longer. I couldn’t possibly tell you what Gannett is up to anymore other than squeezing its properties for every last drop of revenue. On Thursday, the company released its latest financial results. They were terrible for journalists and the communities they serve. For investors, though, they were pretty good.

Don Seiffert reports in the Boston Business Journal that Gannett slashed the number of journalists at its 200 or so newspapers (including the flagship USA Today) by 20% over the past year — no surprise to those of us who were following those cuts throughout the year. Seiffert paged through the annual report and found that Gannett employed 3,900 journalists at the end of 2022 (3,300 in the U.S. and 600 at a U.K.-based subsidiary), down from 4,846 a year earlier. At the same time, though, the company had achieved profitability, which sent the stock price soaring by 22%

Incredibly, some of those investors think Gannett has been too slow to cut. For instance, Seiffert said on Mastodon that, during Thursday’s earnings call, Leon Cooperman, CEO of the hedge fund Omega Advisors, which is among Gannett’s larger investors, told Gannett chair Michael Reed, the $7.7 million man: “I think it’s fair to say you couldn’t understand the impact of Covid and the recession on the company. Having said that, I think it’s a fair criticism to say we have been too slow in reducing costs.” As Seiffert noted: “This, despite the company reducing total headcount by more than half since 2019.”

So what’s ahead? You will not be surprised to learn that CFO Doug Horne told investors that Gannett’s going big-time into artificial intelligence to perform some of the work that used to be done by journalists. Just feed the audio from the planning board meeting into ChatGPT and see what happens, I suppose.

Over at Poynter Online, Angela Fu reports that Reed is wicked psyched about 2023, writing:

Reed said the company is entering 2023 with “a lot of optimism.” Inflation seems to have peaked, he said, and newsprint and distribution costs have largely stabilized. In response to a shareholder question about a possible recession, Reed said the company had not seen anything in the first quarter to indicate the country was moving in that direction.

Unless it proves otherwise, though, Gannett should be regarded as nothing but a financial play at this point. The best thing it could do is offload its community papers to local owners who actually care about journalism, as it has done with a few weeklies Central Massachusetts as well as the Inquirer and Mirror of Nantucket, which I wrote about recently in an op-ed piece for The Boston Globe. Gannett has sold some of its papers nationally as well.

In many other cases, vibrant startups from The Provincetown Independent to several projects in the Boston suburbs are competing with vestigial Gannett papers, but more are needed. As Steven Waldman, president of the Rebuild Local News Coalition, has proposed, we need tax incentives aimed at persuading Gannett and other chains to get out of town — and to give committed local ownership a chance to revive grassroots news coverage.

The local news renaissance in Mass. needs to spread beyond the affluent suburbs

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On January 4, 2023

In Local News

Downtown Marblehead, Mass. Photo (cc) 2011 by Daniel Mennerich.

People are starting to notice the local news renaissance in Eastern Massachusetts that’s been inspired by the Gannett newspaper chain’s never-ending cuts.

Dana Gerber reported in The Boston Globe on Tuesday about “The Great Marblehead Newspaper War,” where three independent start-ups have been launched in response to Gannett’s evisceration of the Marblehead Reporter last year. These days Marblehead is served by a for-profit digital project, the Marblehead Beacon; a well-funded digital and print nonprofit, the Marblehead Current; and the Marblehead Weekly News, a for-profit print newspaper started by The Daily Item of Lynn, which is itself independently owned.

Just a few days ago, Mariya Manzhos reported for Poynter Online about The Concord Bridge, another well-funded nonprofit start-up. And there are a number of others, including The Bedford Citizen, which at this point has to be considered venerable: the nonprofit digital site was started a decade ago by three volunteers in response to cuts by Gannett’s predecessor company, GateHouse Media, at the weekly Bedford Minuteman. Now the Citizen has a small paid staff and is the only news source in town, the Minuteman having been shut down last year. (The Citizen is one of the projects that Ellen Clegg and I are profiling in our book-in-progress, “What Works in Community News,” to be published in early 2024 by Beacon Press.)

But there is an ongoing problem, and it’s one I spoke with Gerber about when she interviewed me: these startups are highly concentrated in affluent, mostly white suburbs like, well, Marblehead, Concord and Bedford. Yes, there is The New Bedford Light, an extraordinarily well-funded nonprofit that’s gotten national attention, but that’s the exception. Most local outlets that serve more diverse communities, such as The Bay State Banner and the Dorchester Reporter, tend to be for-profit publications that have been around for a while; we’re seeing little in the way of new ventures to cover such places. And many have little or nothing. Cambridge Day does a good job, but it’s essentially a one-person shop. Why is Marblehead, with a population of under 20,000, getting more comprehensive coverage than a city of 117,000 people? (I should note that the Cambridge Chronicle is one of just three Gannett weeklies in Eastern Massachusetts that purportedly still covers some local news, although you wouldn’t know it from its website.)

As Manzhos notes, the Boston Institute for Nonprofit Journalism has provided some assistance to local news outlets. What we need, though, are news outlets that provide ongoing accountability journalism in each of the state’s 351 communities — city council, select board, school committee, police, development and the like. I hope that will happen.

We’re also closer than you might think. If you haven’t seen it before, here is a spreadsheet I maintain of every independent local news outlet in the state. Obviously some are better than others, but some of these are excellent.

Michael Reed tells E&P that everything is coming up Gannett

By

On November 1, 2022

In Local News

Photo (cc) 2008 by Patrickneil

You’ve seen plenty of bad news about Gannett here — layoffs, reassigning staff away from local news coverage, closing papers and, more recently, imposing furloughs, pension freezes and buyouts. With more than 200 daily newspapers across the country, what happens at Gannett matters. Its ongoing shrinkage is a significant part of the local news crisis.

So I was interested to see that Gannett chief executive Michael Reed talked — OK, exchanged emails — with Gretchen A. Peck of the trade publication Editor & Publisher. I wanted to see what sort of story he’s telling these days about the path forward for his debt-addled chain, which nevertheless found a way to pay him $7.7 million last year.

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Not surprisingly, it turns out to be a lot of the same old, same old — an emphasis on digital subscriptions despite having little journalism to attract new readers as well as ancillary businesses ranging from events to sports betting. At least he didn’t mention NFTs this time.

One thing I didn’t know was that Gannett’s consumer product website, Reviewed.com, is based in Cambridge, and that it employs more than 100 people, including scientists, product experts, writers and editors. The idea is similar to Wirecutter, founded as an independent site and later acquired by The New York Times. Buy something through Reviewed.com and Gannett gets a cut of the action. Reed told Peck:

If you look across the larger media landscape throughout the last decade, we have seen expansion beyond traditional news into varied product offerings and different types of content. As the traditional revenue streams we largely relied on, such as print advertising and print subscriptions, continue to transition to digital, we are also adapting to new revenue opportunities. These diversifying revenue streams help us to ensure we can support our ongoing news efforts in an increasingly digital world.

Reed added that progress continues to be made in paying down the debt that Gannett took on when it merged with GateHouse Media in 2019. Gannett these days is essentially GateHouse under a different name; Reed himself was the head of GateHouse before the merger.

Despite Reed’s happy talk, the company continues to throw newspapers and staff members overboard. According to Ray Schultz of Publishers Daily, Gannett is selling two papers in New Mexico and has put its Phoenix printing facility on the block for $47.4 million. Urban Milwaukee’s Bruce Murphy reports that six veteran journalists are leaving Gannett’s Milwaukee Journal Sentinel. Local opinion content continues to be slashed as well, writes Mark Pickering in Contrarian Boston.

Essentially Reed is telling the same story he’s always told: Times are tough, and we have to keep cutting. Eventually, though, digital subscriptions and our non-news investments will begin to pay off and support our journalism. It’s just that “eventually” never seems to come. Still, there’s considerable value in reading about Reed’s assessment of how Gannett can pull out of its downward spiral; Peck and E&P deserve credit for getting him on the record.

Meanwhile, in Eastern Massachusetts and across the country, independent news projects are rising up to fill the gap left by Gannett’s retreat. The latest is The Concord Bridge, a digital-and-print nonprofit competing with Gannett’s Concord Journal, ghosted by the shift from local to regional coverage last spring.

You can access a complete list of independent local news outlets in Massachusetts by clicking here.

Gannett’s latest bloodbath is under way

By

On August 12, 2022

In Local News

Massive layoffs are taking place across the country today at Gannett’s newspapers, a move that the company announced last week. I’m not going to try to keep up with the latest — we’ll know in a day or two what the total damage looks like.

Fourteen years ago, I wrote a lengthy article for CommonWealth Magazine about Gannett’s predecessor company, GateHouse Media, which even then was notorious for its slash-and-burn approach. It was ugly, but it looked like they might have a path forward. No more.

A terrible day for Gannett, to be followed by terrible days for its staff and communities

By

On August 5, 2022

In Local News

The late Gannett chairman Al Neuharth, who created USA Today, was no stranger to cost-cutting. But he’d be rolling over in his grave at what’s taking place now. Photo (cc) 2013 by George Kelly.

Gannett, the country’s largest local news chain, is in a tailspin. The publisher of some 200 daily papers reported a significant loss in the second quarter — $54 million on revenues of $749 million.

According to Rick Edmonds, who analyzes the media business for Poynter, the company is either down or missing its targets in digital and print advertising as well as print circulation. The sole bright spot: a steady rise in paid digital circulation. Extensive layoffs are on the way. Edmonds quoted a memo from Maribel Perez Wadsworth, head of the media division, in which she said: “In the coming days, we will … be making necessary but painful reductions to staffing, eliminating some open positions and roles that will impact valued colleagues.” It’s hard to see how shrinking an already diminished product is going to help.

Those of us who live in Eastern Massachusetts and environs might wonder where they are going to find any staff members to lay off. Over the past year, the chain has closed many of its community weeklies. Its dailies are still publishing, but with skeleton newsrooms.

The question with Gannett is how many of its problems are simply part of the overall local news crisis and how many are of its own making. Tim Franklin, senior associate dean and the John M. Mutz Chair in Local News at Northwestern’s Medill School, tweeted:

As it turned out, Lee did reasonably well, which Chris Krewson, executive director of Local Independent Online News (LION) Publishers noted in a response to Franklin.

I would argue that though the challenges facing community journalism are very real, there are some unique factors at work with the current iteration of Gannett, which lost its way in the cradle back when GateHouse Media was born. GateHouse and Gannett merged a few years ago, but it was essentially a takeover by GateHouse, which has been pillaging its local titles for the past 15 or so years. Gannett’s schemes to overcome the mess in which it finds itself strike me as harebrained. Its plan to pursue sports betting isn’t going well, as Edmonds reports. Then there is its dream of getting into nonfungible tokens (NFTs). Seriously?

Gannett’s flagship is USA Today, which is still a solid paper. If I had to guess, I’d say they’ll leave it pretty much alone so that they can use it as a wire service to fill up their regional and local papers. I mean, even more than they’re already doing.

Sadly, Gannett’s journalists have been on a roll, with reporters at the Indianapolis Star and The Columbus Dispatch breaking the story about a pregnant 10-year-old rape victim — and then confirming it when it was questioned by right-wing propagandists and by Washington Post fact-checker Glenn Kessler. The Austin American-Statesman obtained and published video of the police (non)response to the school shootings in Uvalde, Texas, after editing out the children’s screams. This is outstanding journalism, and soon Gannett will have fewer journalists.

Gannett’s greed and incompetence are going to mean fewer jobs for reporters and less coverage for local communities. It’s an ongoing tragedy, but it does open up possibilities for entrepreneurs who are looking to start new projects.

A free weekly paper will cover Middleborough and Lakeville

By

On July 28, 2022

In Local News

Oliver Mill Park, Middleborough. Photo (cc) 2022 by Dan Kennedy.

Local news outlets are popping up left and right following the decimation of our Eastern Massachusetts weekly newspapers at the hands of Gannett. But I want to give a special shoutout to Anne Eisenmenger, who’s going to launch a new weekly paper in mid-August to cover Middleborough, the town where I grew up, and neighboring Lakeville.

Nemasket Week, which will debut on Aug. 18, will be a free, advertiser-supported newspaper with a website. It’s part of Beaver Dam Partners, which currently publishes Wareham Week, Dartmouth Week and Sippican Week, serving Marion, Mattapoisett and Rochester. Eisenmenger, a Boston Globe and GateHouse Media alum who began Beaver Dam 12 years ago, has a proven track record, and I’m looking forward to seeing what she can offer in Middleborough.

Gannett shuttered The Middleboro Gazette last November as part of a wave of weekly closures — about a half-dozen in 2021, followed by 19 in 2022, along with nine others that were merged into four titles. Even worse, nearly all of Gannett’s weekly reporters were reassigned to regional beats, which means that the chain’s papers and websites have little or no local news.

So best of luck to Nemasket Week. And though it’s well outside Eisenmenger’s region, may I suggest that she take a close look at Medford while she’s at it?

The full announcement follows. And by the way, Anne, it’s Middleborough, not Middleboro. Both spellings are in use, but the town is literally the middle borough between Plymouth and Bridgewater.

In Lexington, a slice of local newspaper history

By

On April 13, 2022

In Local News

I thought you might enjoy a little slice of local newspaper history that I dug up Tuesday while doing some research. Mike Rosenberg of The Bedford Citizen once told me that Alan Adams, the former owner of the Lexington Minuteman and, eventually, five other papers, had a building named after him. Today I located the building and learned a little bit about Adams.

First, the building. It’s right next to the Minuteman Bikeway in the center of Lexington, across Meriam Street from the Lexington Visitors Center on the other side of the street. It’s pretty nondescript if you view it from the bikeway, since you’re looking at the side of the building. From Mudge, though, it’s quite striking — white and brick with four large white columns, with “Adams Building” written across the top. It has long ceased to serve as a newspaper headquarters and today mainly comprises professional offices.

Adams died in 1975 at the age of 70. According to his obituary in The Boston Globe, he began working at the Lexington Minuteman (also known variously as the Minute-man, or the Minute-Man) in 1930, and bought the paper in 1932. He also served as a local politico. Among other things, he chaired the Republican Town Committee and held elected office as a town selectman. Presumably he got good press. Obviously it’s not the sort of conflict that anyone would tolerate today, but it wasn’t that uncommon at the time.

From Richard Kollen’s history of Lexington. I’m going to go out on a limb and assume this photo isn’t protected by copyright.

According to a 2004 book by Lexington historian Richard Kollen titled “Lexington: From Liberty’s Birthplace to Progressive Suburb,” Adams used the Minuteman’s pages during World War II to promote wartime measures such as keeping the lights turned off at night so that the pilots of any incoming German bombers wouldn’t be able to see their targets. Adams also admonished his fellow townspeople for not taking those precautions seriously enough, once writing: “Seven stores were reported with unsatisfactory preparations and … all too many houses have not taken care of their porch lights properly.”

Adams sold his papers in 1971, according to the Globe obit. I’m not sure what their immediate fate was, but I know that at some point they were combined with another local chain called Beacon. The Beacon-Minuteman Corp., based in Acton, was eventually acquired by Fidelity’s Community Newspaper Co., then by Boston Herald publisher Pat Purcell, and then GateHouse Media, which merged several years ago with Gannett.

Today the Lexington Minuteman is a shell of what it once was, though it was among a handful of Gannett weeklies that escaped being targeted for shutdown or a merger during a recent round of cost-cutting. Adams himself represented a different era in local journalism — one that was ethically lax in some respects, but that served as the voice of the community in ways that we rarely see anymore.

Staying optimistic about local news amid the damage wrought by corporate chains

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On October 12, 2021

In Local News

Providence, R.I. Photo (cc) 2017 by Kenneth C. Zirkel.

My research work on the local news crisis often feels like a race against time. On the one hand, I try to highlight independent community journalism projects that are keeping their heads above water or, in a few cases, are actually thriving. On the other hand, chain owners like Alden Global Capital and Gannett keep hollowing out the hundreds of newspapers they own across the country, not because they’re not making money but because they want to make more.

Last week came the odd news that Gannett is seeking to sell The Providence Journal’s printing plant for $8 million, as well as several other plants that it owns across the country. The story was broken by Alexa Gagosz of The Boston Globe, a former student of mine. What struck me as odd is that the Journal isn’t outsourcing its printing; rather, it intends to lease the plant back for a period of five or 10 years.

No doubt Gannett executives are thinking ahead to the day when the Journal goes all-digital. But the sell-and-leaseback provision seems hard to explain, especially for a paltry amount like $8 million. That doesn’t put a dent in the massive debt that Gannett is struggling with.

Also last week, The Atlantic published an essay about The Hawk Eye, of Burlington, Iowa, the oldest paper in the state, which was acquired several years by GateHouse Media — the predecessor to Gannett — and is now being dismantled. Written by Elaine Godfrey and photographed by KC McGinnis, it is a lovely piece, haunting and elegiac, conjuring a lost way of life as much as a newspaper that’s been hollowed out. But Godfrey has a keen sense of Gannett’s business model as well. This gets right to the heart of it:

Readers noticed the paper’s sloppiness first — how there seemed to be twice as many typos as before, and how sometimes the articles would end mid-sentence instead of continuing after the jump. The newspaper’s remaining reporters are overworked; there are local stories they’d like to tell but don’t have the bandwidth to cover. The Hawk Eye’s current staff is facing the impossible task of keeping a historic newspaper alive while its owner is attempting to squeeze it dry.

None of this was inevitable: At the time of the sale to GateHouse, The Hawk Eye wasn’t struggling financially. Far from it. In the years leading up to the sale, the paper was seeing profit margins ranging from the mid-teens to the high 20s. Gannett has dedicated much of its revenue to servicing and paying off loans associated with the merger, rather than reinvesting in local journalism. Which is to say that southeastern Iowans are losing their community paper not because it was a failing business, but because a massive media-holding company has investors to please and debts to pay.

So what’s lost? Consider the experience of Tom Courtney, a former state senator, who lost his re-election bid after he discovered that his constituents, lacking any reliable local news, were judging him on the basis of national stories instead:

In the absence of local coverage, all news becomes national news: Instead of reading about local policy decisions, people read about the blacklisting of Dr. Seuss books. Instead of learning about their own local candidates, they consume angry takes about Marjorie Taylor Greene. Tom Courtney, a Democrat and four-term former state senator from Burlington, made more than 10,000 phone calls to voters during his 2020 run for office. In those calls, he heard something he never had before: “People that live in small-town rural Iowa [said] they wouldn’t vote for me or any Democrat because I’m in the same party as AOC,” Courtney told me. “Where did they get that? Not local news!”

Also last week, the trade magazine Editor & Publisher ran a story about Gannett papers that have actually been bought back by local owners. Written by Gretchen A. Peck, the story looks in on four people who’ve acquired former Gannett papers and are now reinvesting in news and in their communities.

Still, it hardly looks like a trend. Peck spoke with newspaper broker Sara April, who said Gannett is selling just a few papers here and there. “All the markets are typically smaller. Look at the size of the towns. That has been the charge: To find quality local companies, with high regard for journalism, to take ownership of these newspapers so they can continue to serve their communities,” April was quoted as saying. No doubt the papers don’t fit with Gannett’s current strategy, which seems to be filling up its papers and websites with regional news so it doesn’t have to put too much into local coverage.

The good news — and there’s always good news — is that local independent journalism is thriving in many parts of the country. The bad news is that the corporate chains and the hedge funds continue to strangle news organizations that would otherwise be doing much better.

An earlier version of this post was part of last week’s Media Nation Member Newsletter. To become a member for just $5 a week, please click here.

Legendary North Shore newspaper publisher Bill Wasserman dies at 94

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On October 1, 2021

In Local News

Bill Wasserman. Photo by Jim Walsh. Used by permission.

Legendary North Shore publisher Bill Wasserman has died at the age of 94. The founder of the Ipswich Chronicle, which he built into a group of about a dozen papers comprising North Shore Weeklies, Wasserman sold in 1986 and later became an outspoken critic of corporate chain ownership.

Several years ago, GateHouse Media — now Gannett — folded the Chronicle and merged it into a paper called the Chronicle & Transcript, which covers six North Shore Communities. Wasserman did something about it, becoming a consultant and ad salesman at a nonprofit startup, Ipswich Local News, which appears to be going strong.

Starting in the early 1990s, Wasserman’s former papers became part of larger groups — first Community Newspaper Co., owned by Fidelity and later then-Boston Herald publisher Pat Purcell, and then GateHouse. Wasserman lamented the cuts that were implemented at his old papers. In 2008 I wrote about GateHouse for CommonWealth Magazine; Wasserman was among those I interviewed. An excerpt:

After 20 years of consolidation, it’s fair to ask if corporate ownership of community newspapers makes sense — not just journalistically, but financially. Take Bill Wasserman, who built North Shore Weeklies and sold the group in 1986 to investors who, in turn, sold to Fidelity several years later. Wasserman says the main problem with corporate ownership is a failure to understand that, even in the best of times, community journalism is little more than a break-even proposition.

“I was paid a salary, which was modest,” says Wasserman. “The reward was not in the profit. The reward was having a lot of fun putting out a community paper.”

Earlier this year Wasserman was honored by the Ipswich Rotary Club. Even in his 90s, he was looking to the future, saying:

The Ipswich Local News, which is surviving despite all the reports of failing local newspapers, is doing well because of its small but dedicated staff led so ably by John Muldoon — a Rotarian — and the broad support of both the local business community and the residents. It is a joy to be part of this effort to keep local news and its watchdog component alive.”

Wasserman retired from the paper a little more than a year ago, saying, “I will be 93 in two weeks, and I would like to pay more attention to my family and sleep without a deadline. There’s enough news and concerns in our town to keep busy 24 hours 7 days a week.”

I last saw Wasserman several years ago. He looked well and was as sharp as ever. His passion for community journalism was undimished. It’s fitting that toward the end of his life he came full circle — helping to found a newspaper in Ipswich to take the place of a once-thriving paper shut down by a corporation for whom the bottom line is always the bottom line.

There they go again: Gannett shutters the 119-year-old Melrose Free Press

By

On August 5, 2021

In Local News

Postcard via Wikimedia Commons

Gannett has pulled the plug on the Melrose Free Press. The weekly published its final edition on Thursday, July 29, and employees were told it was all over on Thursday morning of this week, according to sources.

As best as I can tell, the Free Press had no dedicated staff members, and I haven’t heard of any layoffs. This was a move aimed at saving printing costs. Gannett’s Wicked Local website for Melrose will live on, though, as you’ll see, most of it consists of news from other communities, as is Gannett’s practice. For those who really want a print edition, the guessing is that they will receive the Observer Advocate, which currently serves the neighboring communities of Reading, Wakefield and Malden.

Melrose is served by a Patch site and by the Melrose Weekly News, a family-owned chain whose papers also cover Wakefield, North Reading and Lynnfield. Mike Carraggi, Patch’s regional editor for Massachusetts, New Hampshire, Rhode Island and Maine, tweeted that he’ll “continue making sure Melrose has as much independent reporting as possible via Patch.”

https://twitter.com/PatchCarraggi/status/1422723662445154307

The Free Press’ paid circulation was 639 as of March, according to the Alliance for Audited Media — a paltry figure given that U.S. Census data show Melrose is a city of about 28,000, with 11,329 households. Carraggi also tweeted that the paper hadn’t had a full-time reporter in several years.

The Melrose Free Press was founded in 1901, according to the Melrose Historical Commission. Unlike its two competitors at the time, Melrose did not charge — hence its name. (At the time of its demise, the Free Press was a paid product.) The paper was sold to Fidelity’s Community Newspaper Co. in 1991, which put it in the hands of a corporate chain. Cutting continued through various iterations of the chain, culminating in ownership by GateHouse Media, which merged with Gannett in 2020.

“In recent years,” the historical commission said, “the paper has weathered the decimation of advertising revenue that accompanied the rise of the Internet, and an ever-shrinking staff.”

Gannett always seems to be in retrenchment mode, but it’s been especially severe recently, with the chain shutting down its weeklies in Marlborough and Hudson and cutting back on print distribution in Newton.

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