GateHouse Media, formerly Liberty Group Publishing, was a doomed scheme from the beginning. The company continued to buy one property after another, trim costs as much as possible (often by eliminating the newspapers' community ties) and continued to go further and further into debt buying one newspaper after another, rarely adding quality to any of their products.
Now communities across the U. S. wait for the ax to fall on their daily and weekly newspapers and it is all happening because of the greed.
The company, in fact, started because of the greed of one man, Conrad Black, who is now residing in a federal prison after being convicted of fraud for fleecing his former company Hollinger.
Liberty Group Publishing was formed in 1998 when Hollinger made the decision to sell its smaller daily and weekly publications to California investment firm Leonard Green & Partners.
As I wrote in the Sept. 3, 2004, Turner Report:
The 1998 sale of The Neosho Daily News, The Carthage Press, and other newspapers that belonged to American Publishing (a subsidiary of the Canadian company Hollinger) to the newly-formed Liberty Group Publishing marked the start of a long period in which Hollinger CEO Conrad Black looted his company coffers, according to a report filed with the federal Securities Exchange Commission earlier this week.
Most of American's community newspapers were sold to a California-based leveraged buyout firm, Leonard Green and Associates to $310 million with $31 million going toward a "non-compete" clause.
What was never explained is why Hollinger should have been paid a non-compete clause when it is almost impossible to start a newspaper in a small community which already has one and make it financially successful. One of the selling points for these newspapers, which Liberty is using now that it has them on the block, is that they have no competition.
Liberty officials appear to be lucky. As Hollinger continued to sell off the remainder of its community newspapers in the late 1990s and early this century, even more money went into these non-compete clauses, according to the report, and most of this money made its way into the personal bank accounts of Lord Black and two or three other high-ranking company officials. Buyers were also required to pay non-compete money to another publishing concern, which was totally owned by Lord Black and this handful of confederates.
The report indicates these robber barons took Hollinger for more than $400 million over the past five years.
I was lucky to be in on only the first year of Liberty Group Publishing's ownership of The Carthage Press, and apparently, I was with one of the few newspapers which actually was allowed, albeit for a brief time, to actually add quality to the newspaper.
With Ralph Bush as publisher, the company opened the purse strings slightly to add three solid reporters, Jo Ellis, who had just received a buyout from the Joplin Globe, John Hacker and Rick Rogers, joining Ron Graber and me. That arrangement, however, only lasted nine months before Hacker and I were shown the door.
Liberty and its predecessor, American Publishing, had already begun to inflict the damage on The Carthage Press that has left it a mere shell in 2009.
As I have written numerous times in The Turner Report, when American Publishing bought The Carthage Press, it was a stronger paper than the Neosho Daily, with a better news staff, better advertising sales, and a solid printing business that included the Webb City Sentinel, the Wise Buyer, other weeklies, and nearly every high school newspaper in the area.
The company shut down the printing operation, sold our printing press, sent the print jobs to Neosho, where then-publisher Valerie Praytor scrapped nearly all of them, and forced us to have unrealitically early deadlines for an afternoon newspaper.
The dismantling of The Carthage Press continued over the years with the elimination of the inserters, the composing room, and everything except basic news and advertising positions, was farmed to Neosho.
Eventually, with nothing left to fill up the historic three-story building it had occupied for half a century, the Press was moved to a site that was more suitable for a fast food place. Its files and bound copies were sent to the Courthouse Annex and the newspaper's publisher and editor are both from Neosho.
Naturally, those moves have not pleased the community and last I looked, The Carthage Press, thanks more to the moves made by Liberty and not the economy, had lost more than 60 percent of the readership it had when I left nearly 10 years ago.
Sadly, The Carthage Press is not the only newspaper that GateHouse Media has destroyed in its misguided attempt to corner the small newspaper market, and at least, for now, the newspaper still has a chance, albeit slim, to bounce back.
That option is no longer available to the Derby Reporter, the Kansas City Kansan, and most likely, the Girard Press.