Tag: GateHouse

At GateHouse, as elsewhere, the rich get richer

Kirk Davis

Seems like it’s been ages since I last wrote about GateHouse Media, the financially challenged Fairport, N.Y.-based company that owns about 100 community newspapers in Eastern Massachusetts.

Things may be more quiet than they were a year ago, but rumblings of dissension persist. Several anonymous employees sent this along, detailing some mighty nice bonuses top GateHouse officials paid themselves to publish understaffed newspapers run by overworked, low-paid journalists.

Leading the parade is chief executive Michael Reed, who got $500,000. Taking the silver, with $250,000, was president and chief operating officer Kirk Davis, a top GateHouse official in Massachusetts before decamping for upstate New York last year.

It’s an old story. Ordinary people work hard for short money while the folks at the top reward themselves. Reed and Davis are managing a difficult situation, and it may well be that they deserve to be compensated handsomely just for keeping GateHouse alive. Then, too, their situation is hardly unique.

Just a few days ago we learned that Joseph Lodovic IV, president of Dean Singleton’s MediaNews chain, was receiving a $500,000 bonus for the bang-up job he did putting together a structured-bankruptcy plan. That may be the way of the world. But such tidbits can be pretty hard to swallow for those who actually cover late-night meetings and give up their weekends to photograph local events.

In other GateHouse news, here is a weird story involving a reporter for the company’s Dodge City Daily Globe, in Kansas, who was fired in the midst of a legal dispute over whether she should testify about her confidential source in a murder case.

I’m going to have to side with management on this one. The reason: Lucy Dalglish, executive director of the Reporters Committee for Freedom of the Press, tells the Topeka Capital-Journal that the reporter, Claire O’Brien, refused to show up in court to answer the subpoena she’d received.

“What she did was really stick a thumb in the judge’s eye today,” Dalglish is quoted as saying. “Even if you’re not going to answer questions, you still have to go to court.”

Media Nation Rule No. 57: If Lucy Dalglish doesn’t stand up for you on a freedom-of-the-press issue, then you’re wrong.

Tuesday evening update: Dalglish takes a rather different stance on the RCFP Web site, saying she finds O’Brien’s termination “unusual” and “quite disturbing.” An Associated Press account of what happened is worth reading, too.

An award for an innovative online news site

[youtube http://www.youtube.com/watch?v=lWrzex2yeoA&color1=0xb1b1b1&color2=0xcfcfcf&hl=en_US&feature=player_embedded&fs=1]
The Batavian, an online-only news site based in the western New York town of Batavia, has been recognized as the “Innovative Enterprise of the Year” by the Genesee County Chamber of Commerce.

Founded and now owned by former GateHouse Media executive Howard Owens, the two-year-old Batavian is among the more serious for-profit local-news experiments unfolding nationally.

Above is an interview I did with Owens last June during a visit to Batavia. Congratulations to Owens, an innovative thinker who has fully embraced the just-do-it ethos of online journalism.

A most unfortunate juxtaposition

The Cambridge Chronicle, like other GateHouse papers, often runs sticky-note ads on the front page. This one didn’t work out so well. Here’s the Chronicle’s story on the alcohol-fueled imprisonment and resignation of former state senator Anthony Galluccio.

Update: Statement from GateHouse group publisher Greg Reibman.

GateHouse reverses pay cuts

Despite having plenty of financial problems of its own, GateHouse Media New England will reverse pay cuts that had been implemented earlier this year. A little while ago Media Nation obtained a copy of an e-mail that president and CEO Rick Daniels sent to all staff members announcing the news. The full text follows.

Colleagues,

Based on the strengthened cash flows over the last several months, I am pleased to announce that the temporary pay cuts that were implemented in June and July are coming to an end, and our pay rates will be restored to full, pre-cut levels. For those whose pay was reduced as of June 1, the first workday that will be paid using the original, “pre-cut” rates will be Oct. 5th. The first paycheck that will reflect your original rates will be Oct 23rd. For those employees who received paychecks on Oct. 14th, your “retroactive pay” (from Oct. 5th onwards) will be reflected in your first post-announcement paycheck. For those colleagues who are represented by unions, the restorations will be done in accordance with the terms of the relevant agreements. These dates have been communicated to union leadership and your respective managers will communicate these dates to you under separate heading.

First and foremost: Thank you all — for your work, your dedication and your toughness. NONE of us were pleased about the need to take this step, yet the vast majority of employees did not choose to do anything BUT to put in their very best efforts to do their jobs so that we could reverse these cuts as soon as possible. We believed then, and still believe that this step allowed us to preserve the core assets and capabilities our customers value most. While the members of the senior management team had hoped we could restore these cuts prior to year’s end, at least partially, we are heartened that the time spent under the pay cuts will prove to be shorter than expected; that said, even had it been a week or a month, it would have still been an onerous sacrifice. Ending these cuts is not only a major relief for all of us, but it’s also an important affirmation of our business model, and an affirmation of the quality and effectiveness of our collective efforts, and the results we have been able to generate. We are in a position to restore the cuts because GHMNE is again generating sufficient cash flows to be clearly and safely in the black. If you remember, when we announced these cuts, I said there were two kinds of companies: Those that produced positive cash flow, and those that didn’t, and we could not allow ourselves to be among those that didn’t.

I don’t want to create any misimpressions that the economy, and its powerful effects on our advertising revenues, is improving all that much. Ask any of our sales personnel. Most of our advertisers are struggling. For the most part, most of our cash-flow improvements are being generated by very stringent spending reductions, NOT a rapid return to great revenue performance — (although there has fortunately been some strengthening in revenue comparisons vs. the year over year declines we experienced earlier in the year). NONE of these cost reductions has been “easy”, and while we’ve turned over many stones to reduce the structural costs of GHMNE by several millions of dollars, we need to continue to take all possible steps to increase our efficiencies — and we will. Going forward, we need to continue to evaluate all aspects of our operations to help ensure that we are operating in a smart and efficient manner. ALL of us hope that we will never have to cope with pay reductions again (and I’m sure we all hope we never see another “Great Recession” in our lifetimes). We have, once again, proven that highly focused and very efficient local publications (both print and digital), that are produced by a very focused, talented and dedicated group of team members are extraordinarily durable, because they provide exceptional and truly unique value to readers and advertisers. We have a GREAT, and now very much battle-tested, group of employees and publications that will allow us to get back to the business of growth, and probably in the not-too-distant future. There are a host of new business initiatives, both at local and at GateHouse-wide levels that are being put into effect, and both I and the members of the senior team will be scheduling site visits and employee meetings in just over a month to share details on some of these, as well as answer your questions and hear your thoughts and suggestions. Again, thanks very much — you’re talented, dedicated and durable and a group that’s a true privilege to work with and lead.

Richard Daniels,
President and Chief Executive Officer

Take two and call me in the morning

These two pieces really need to be read together. In today’s New York Times, media columnist David Carr takes a look at Gannett’s Journal News, in Westchester County, which has essentially fired the whole staff and invited everyone to reapply.

It sounds brutal — OK, it is brutal — but with the business model irretrievably broken, it makes perfect sense to blow everything up and start over. If it’s inevitable that the paper is going to end up with a much smaller staff, then it’s vital that the right people get to keep their jobs.

The second piece is a blog post by Howard Owens, the former GateHouse digital-publishing director who’s now publisher of the Batavian, a community news site covering the area between Buffalo and Rochester, N.Y.

Although much of Owens’ post is about why it makes sense for newspaper companies to separate print and online news operations, the heart of it is that since online advertising can only grow so much, the proper response is to cut expenses in order to reach break-even. He writes:

In a market where the newspaper newsroom might cost $10 million, I knew how to make $1 million online, or even $2 million, but I didn’t know — and still don’t — how to make $10 million.

So if I can make a million online, why do I need operate a $10 million newsroom, especially given the greater efficiencies of online publishing?

It’s possible to make money in online journalism. What may not be possible is for large, legacy news organizations — especially newspapers — to survive unless their executives are willing to rethink everything they do.

Howard Owens talks about The Batavian

[youtube http://www.youtube.com/watch?v=lWrzex2yeoA&hl=en&fs=1&]
My spring-and-summer video tour of innovative online news organizations continues with Howard Owens, publisher of The Batavian, a for-profit news site in western New York state that he founded when he was director of digital publishing for GateHouse Media.

Owens left GateHouse earlier this year and took The Batavian with him. I visited him in late June and spent a few days interviewing him and other folks in Batavia. Owens, though, is the only one I captured on video.

Here are links to my earlier video interviews:

  • Christine Stuart, editor and publisher of CT News Junkie, which covers political and governmental news from the Connecticut State House, in Hartford.
  • Adil Nurmakov, Central Asia editor for Global Voices Online, whom I interviewed in Almaty, Kazakhstan.
  • Solana Larsen, managing editor of Global Voices.
  • Paul Bass, editor and publisher of the New Haven Independent, a non-profit news site.
  • Debbie Galant, co-founder of Baristanet, a for-profit community news site in Montclair, N.J.

On the road again

I just arrived in Batavia, N.Y., where I’ll be for the next few days. I’m doing some reporting for my book project on the Batavian, an online-only newspaper published by Howard Owens, the former director of digital publishing for GateHouse Media.

Owens and I are meeting tomorrow morning at the Pok-A-Dot. I’m also meeting with Tom Turnbull, publisher of Batavia’s Daily News, as well as a few community folks before heading back on Wednesday.

Internet access at the Holiday Inn where I’m staying seems pretty slow, so I’m not sure how that’s going to work out. In any case, expect blogging to be light.