Three tales of woe from GateHouseLand

Steve DeCosta (via Twitter)
Steve DeCosta (via Twitter)

The nice thing about missing out on bad news from GateHouse Media* is that you only have to wait a few days for fresh material. Thus we learn today that The Standard-Times of New Bedford is getting rid of three newsroom jobs. Here’s the internal email from editor Beth Perdue:

Colleagues,

Today we eliminated three editorial positions in an effort to align our staffing levels to expected revenues in 2015 and levels at similar sized media companies.

These are always tough decisions and my heart goes out to those who departed. Their loss will be felt by all of us.

Please know that these changes represent the full extent of planned reductions in the newsroom.  While changes like this are very difficult, we can now focus fully on pursuing a variety of opportunities that will help us move forward.

— Beth

I hear that among those departing is veteran reporter Steve DeCosta, a respected figure in the newsroom since  the late 1970s. I also understand that Simón Rios is leaving the paper for WBUR Radio (90.9 FM). The cuts, I’m told, will shrink the reporting staff to five, compared to nine just two years ago. (I’m asking for details on the third job that’s been eliminated and will update if I hear anything.)

You may recall that Perdue’s predecessor as editor, Bob Unger, resigned in December rather than implement GateHouse-ordered cuts. Boston Globe reporter (and GateHouse alumnus) Jon Chesto wrote at the time that Unger was “hoping his sacrifice will save two or three lower-paying jobs.” If you scroll to the bottom of Chesto’s story, you’ll see what I told him: Don’t count on it.

• T&G reporter quits over shrinking pay. In a departure that has gotten national buzz, Thomas Caywood, an investigative reporter for the Telegram & Gazette in Worcester, quit after management refused to give him a 3 percent raise — which, he said, would have offset only a fraction of the reduction in income he’s been subjected to over the years. Here is part of what Caywood wrote to T&G publisher James Normandin:

For your background, I have been a reporter at the Telegram & Gazette since September 2007, during which time I have had one small pay raise. The cumulative impact of inflation over the last seven years of my employment has been to reduce the value of my annual earnings by nearly 14 percent. My vacation allotment was reduced from three weeks a year to two weeks by Halifax Media Group. Meanwhile, our benefits cost more and cover less than before the Halifax acquisition….

All I require is a 3 percent raise and restoration of my previous three-weeks-a-year vacation allotment. The meager raise would barely be noticeable to my finances, but it’s vital to me that I see some tangible evidence of this commitment to quality journalism of which you and GateHouse speak.

Caywood told Jim Romenesko: “I didn’t leave the Telegram & Gazette with any hard feelings and my departure was not intended as some kind of provocative ‘fuck you’ gesture…. But I just couldn’t avoid any longer the unwelcome truth that I valued the job more highly than the company valued me.”

If you’re having a hard time following the bouncing chains, Globe owner John Henry sold the T&G to Halifax Media Group of Florida in 2014. Halifax turned around a few months later and sold out in its entirety to GateHouse, which is based in suburban Rochester, New York. Here is the analysis I wrote for WGBHNews.org in November.

• Cape Cod Times to close printing plant. The Cape Cod Times and its affiliated weeklies will shut down their printing press in Hyannis and move production to the Providence Journal.

This move, at least, makes sense, and has been anticipated from the time that GateHouse acquired the Journal last summer. But “an undisclosed number of jobs” will be eliminated, writes Times reporter Bryan Lantz. And here’s more from Jon Chesto.

*For the sake of simplicity, I am referring to the corporate owner of all these papers as GateHouse Media. The chain’s acquisition branch is known as New Media Investment Group.

Update. I’m now hearing that DeCosta and two other newsroom people were let go at The Standard-Times — not counting Rios, who’ll begin his new job at WBUR soon.

 

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Sale of ProJo a lost opportunity for local ownership

Previously published at WGBHNews.org.

The online news site GoLocalProv is taking a well-deserved victory lap now that it’s been announced that GateHouse Media will acquire The Providence Journal from A.H. Belo of Dallas for $46 million. GoLocalProv reported on June 13 that the sale was imminent. But there the matter stood until Tuesday, when we learned that the Journal had been sold to GateHouse’s parent, New Media Investment Group.

As I told Ted Nesi of WPRI.com, I think it’s a shame that some way couldn’t be found for the Journal to return to local ownership — a lost opportunity, just as it was when John Henry sold the Telegram & Gazette of Worcester to Halifax Media Group of Daytona Beach, Florida, earlier this year. There is no substitute for a newspaper that is fully invested in the community. I have no doubt that cuts will follow, just as they did when New Media/GateHouse last year purchased Rupert Murdoch’s Dow Jones community papers, including the Cape Cod Times and The Standard-Times of New Bedford.

Still, any incoming chain would make cuts, and I think the new, post-bankruptcy GateHouse, based in Fairport, New York, deserves a chance to prove it will be good steward of the Journal. Despite reductions at the Cape Cod and New Bedford papers, journalists there continue to do a good job of serving their communities. On the other hand, the more than 100 community papers GateHouse already owns in Eastern Massachusetts are strictly barebones operations.

In a full-page ad in today’s Journal aimed at reassuring his new employees, customers and the community of the company’s good intentions, GateHouse chief executive officer Kirk Davis concludes:

We know The Providence Journal plays an indispensable role in helping you live your life in and around Rhode Island. We look to uphold these great traditions and make the investments needed to thrive in the new multimedia world. The purchase is expected to close later this summer. We are looking forward to welcoming the readers, advertisers and employees of The Providence Journal to our family.

At $46 million, New Media/GateHouse paid a surprisingly high price for the Journal. Although Belo is keeping the pension liabilities, it’s also keeping the downtown property. By way of comparison, John Henry paid $70 million for the Globe, the Telegram & Gazette and all associated properties — then turned around and sold the T&G for $17.5 million, according to a source involved in the sale. One possible explanation is that the New York Times Co. sold the Globe and the T&G to the low bidder, as one of the spurned suitors, “Papa Doug” Manchester, complained at the time. New Media/GateHouse, by contrast, was presumably the high bidder for the Journal.

Another possible explanation is that the Journal is worth more to GateHouse than to other buyers because it gives the company new territory for its Propel Marketing subsidiary. According to a perceptive analysis of the deal by Jon Chesto in the Boston Business Journal, Propel is seen by GateHouse executives as “the primary engine for growth at the company.”

Yet another wrinkle: The Globe has developed a nice side business printing other newspapers, including the Boston Herald and GateHouse properties such as The Patriot Ledger of Quincy and The Enterprise of Brockton. At a time when Henry is getting ready to sell the Globe’s Dorchester plant and move printing operations to a former T&G facility in Millbury, the prospect of losing GateHouse’s business has got to be disconcerting.

BBJ: Henry is close to selling Worcester paper

The indispensable Boston Business Journal reports that John Henry may be close to selling the Telegram & Gazette of Worcester, the “other” newspaper he acquired when he purchased The Boston Globe.

Craig Douglas writes that the T&G may end up in the hands of GateHouse Media, which recently implemented cuts at its two newest Massachusetts properties, the Cape Cod Times and The Standard-Times of New Bedford.

I’d like to think that Henry would sell to local owners if he could find any. The T&G may be a tough acquisition at this point, and GateHouse may be among the few prospective buyers willing to take it on.

My hope is that GateHouse, which is going through a structured bankruptcy aimed at getting $1.2 billion in debt off its back, will prove to be a better steward of the T&G than we’ve come to expect.

GateHouse’s recent move at its weekly papers in Massachusetts — reallocating resources from weaker to stronger papers rather than engaging in out-and-out cuts — offers some reason for optimism.

Update: Henry has what sounds like good news, according to the T&G — no sale before 2014, plus he’s hoping for a local buyer.

The reaper visits Cape Cod, New Bedford papers

In September I asked (here and here) whether Rupert Murdoch’s 33 Dow Jones community newspapers might face cuts once they were sold to Newcastle Investment Corp., which is affiliated with GateHouse Media. Over the weekend we got the answer: yes, indeed.

Screen Shot 2013-11-04 at 10.05.19 AMLocally, the Cape Cod Times and The Standard-Times of New Bedford, both of which enjoy excellent reputations, will have to make do with a lot less. Seven full-time and 10 part-time employees have been cut at the Cape Cod Media Group, which comprises the Times and several affiliated publications. Twelve newsroom jobs were eliminated, with 10 people being laid off.

Similarly, four full-timers and four part-timers were let go at the SouthCoast Media Group, which is dominated by The Standard-Times. The story does not say how many of those employees were on the news side.

Peter Meyer, the publisher of both papers, was quoted in The Standard-Times as saying:

It is important to know that new ownership is not at fault for today’s actions. Any buyer would have taken similar measures based on financial realities. This was a painful but necessary step to position the SouthCoast Media Group for future success.

Essentially the same statement ran in the Cape Cod paper. Yet Meyer also says the papers in both groups remain profitable, though not as profitable as they were in 2009. Which means that the new owners could have invested in growth — admittedly, a dicey proposition — rather than bet on continued shrinkage.

I could not find any announcement for the Portsmouth (N.H.) Herald, the third major local daily that Dow Jones sold in September. But Jim Romenesko reports that the Times Herald-Record of Middletown, N.Y., got rid of all four of its staff photographers and will now rely on freelancers — reminiscent of the move made by the Chicago Sun-Times earlier this year. Three newsroom managers were let go as well.

“I’m getting reports today of ‘bloodbaths’ at some of the former Dow Jones papers,” Romenesko wrote on Friday.

GateHouse, currently going through a structured bankruptcy, owns about 100 community newspapers in Massachusetts, most of them weeklies.

Murdoch sells local papers to GateHouse investor

MA_CCTRupert Murdoch is selling The Middleboro Gazette, the weekly that covers the Southeastern Massachusetts town where I grew up. I’m not sure Murdoch ever knew he owned it in the first place. It’s just something that was thrown in when his News Corporation bought The Wall Street Journal and Dow Jones in 2007.

Earlier today, Dow Jones’ chain of local newspapers — formerly the Ottaway group — was acquired by an affiliate of Fortress Investments, the majority owner of GateHouse Media, which will manage the papers. I’m not sure why GateHouse itself isn’t buying the papers, but perhaps we’ll learn more in the days ahead. Jim Romenesko has more.

Dow Jones’ regional properties include some high-quality, well-known dailies such as The Standard-Times of New Bedford, the Cape Cod Times and the Portsmouth Herald of New Hampshire.

Two questions spring to mind:

  • In general, the Ottaway papers have been spared some of the cuts that the financially struggling GateHouse chain has implemented. Will downsizing now commence? Or will the Ottaway papers’ odd status as non-GateHouse papers spare them?
  • What happens to Boston Herald owner Pat Purcell, who’s been running the Ottaway papers for Murdoch since 2008? Will he content himself with running the Herald? Or will Murdoch come up with a new assignment for him?

The deal includes 33 publications, eight of them daily papers. Romenesko reports that financial terms were not disclosed. But given that The Boston Globe recently went for $70 million — not much more than the value of its land — I can’t imagine that a significant amount of money is changing hands.

Update: From Wednesday’s New York Times:

The details of the transaction were not released, but the money involved was evidently relatively small, because if it had been bigger (or, in financial terms, material to the company) News Corporation would have had to disclose more financial information.

Ouch.

Update II: Shows you what I know. Fortress paid $87 million for the Dow Jones papers, which may be a fraction of what they were worth a few years ago, but is more than I had imagined.

According to Tiffany Kary of Bloomberg BusinessWeek, an enormously complicated reorganization is now under way. The long-in-the-making bankruptcy of GateHouse Media is now a reality, and the company will be absorbed into a new company to be created by Fortress called New Media.

Update III: Jon Chesto of the Boston Business Journal has posted a must-read analysis of what’s going on. Talk about failing up. GateHouse is going bankrupt and will become part of something bigger. And it looks like GateHouse chief executive Mike Reed isn’t going anywhere.

Turning seed corn into junk food

This will probably be my last post until after Christmas. But I wanted to note that the Standard-Times of New Bedford will erect a pay wall around its Web site starting Jan. 12.

As Jon Chesto of the Patriot Ledger notes, it’s not entirely unanticipated, since the Standard-Times’ owner is Rupert Murdoch, who has launched a crusade against free content. Murdoch’s man in New Bedford is Boston Herald owner Pat Purcell, who says he’ll unveil his own paid-content system sometime next year as well.

Though I think pay walls are a bad idea, the Standard-Times’ system is better than some: you’ll be able to read up to 10 stories a month without paying, which means the paper won’t be completely closing itself off to the outside blogosphere.

Still, it’s hard to imagine that the Standard-Times’ fine Web site, South Coast Today, won’t deteriorate under the new system. It’s a shame, because the paper’s original Web site, http://www.s-t.com, was a pioneering effort that garnered national attention back in the mid-1990s.

The print edition may well realize some short-term gains — no longer will local readers be able to catch up on news in Southeastern Massachusett for free. But Murdoch and Purcell are turning their seed corn into Fritos.

Photo (cc) by Daniel R. Blume and republished here under a Creative Commons license. Some rights reserved.