It takes some nerve for GateHouse Media CEO Michael Reed to brag that his company was planning to initiate further cost cutting moves...when he received a half million dollar bonus the same day and other company officials received $650,000 in bonuses, for a total of $1,150,000.
i am sure that news will not please Carthage Press Editor John Hacker or the many other hard working newspeople in GateHouse who have seen their staffs cut to the bone and their newsrooms bombarded with orders from people who wouldn't know news if they saw the word in the dictionary.
I wrote about this in my latest Daily Kos post, which is reprinted below:
My 22-year career in journalism ended in May 1999 when I was fired as managing editor of The Carthage Press, a small Southwest Missouri daily, on the same day that a $750 million libel suit filed against me by Clinton opponent Terry Reed (he of the infamous Mena Airport story) was dismissed in federal court.
That story is documented in my book, Newspaper Days, which also notes how I finally opted to go into teaching rather than take a job with another newspaper company and continue to fight a losing battle against the corporate incompetents who have dragged print journalism into the gutter.
Still, as anyone who has ever been in journalism knows, you never quite get it out of your system, which is why I have been blogging for the past seven years. I have watched with pride as journalists at some of the most poorly operated chains in the U. S. somehow manage to occasionally turn out excellent stories despite the people who make the business decisions.
Some of those excellent stories are even done by reporters at my old company, Liberty Group Publishing, now known as GateHouse Media.
How they do it, I don’t know. The staffs have been cut to the bone and are required to write far more advertorial copy than real news. Advertising salespeople have long since stopped trying to sell the newspaper as a quality vehicle for a company to increase its sales. Now one special section after another, and one promotion after another, are foisted upon increasingly irritated business owners, who are encouraged to advertise not because it will help them but because it will help the community. And what a laugh that is, since nearly all of the money that comes into the newspaper’s coffers is shipped out of state.
The reporters continue to live on subpar wages and are treated with little or no respect, because they really have nowhere to go if they want to continue doing something they truly love.
And how do GateHouse Media officials reward them for their sacrifices?
They don’t. At least not based on what they filed in their annual report to the Securities and Exchange Commission Thursday.
CEO Michael Reed was ecstatic because GateHouse lost less money than the year before:
“Our fourth quarter same-store revenue declines were 10.5% compared to 14.9% in the third quarter. This trend has continued into our first quarter.”
Reed is not talking about profits any time in the future, which is not surprising since the company owes more than a billion dollars, according to SEC filings.
Reed also trumpeted the news that further cost cutting is in store for the beleaguered newspapers in his company.
“We are in the process of implementing additional cost saving initiatives in order to better align our overall cost structure with current revenue trends.”
Of course, there was one thing that Reed did not include in the news releases he filed with the SEC- the $1,150,000 in bonuses he and the other top officials at GateHouse will receive this quarter.
According to the annual report, Reed will receive a half million dollars, while five other officials will receive a combined $650,000.
While that may not seem like much compared to the outrageous bonuses in the banking institutions we have heard about, it is a slap in the face to the hundreds of small towns that have seen their newspapers raped and ravaged at the hands of GateHouse Media.
So looking back at the day that my newspaper career ended, I can now realize it was the best thing that ever happened to me. Not only can I make a living as a teacher, doing something that I truly love…but instead of working for the faceless suits that run today’s failing newspapers, I can reveal them to be the robber barons they truly are.
Get out your calculators. In 2009, GateHouse lost 530.6 or 454.5 million (with a capital "M") dollars, depending on which report number you want to use. Losing almost a half a billion dollars in one year is staggering. As of March 23, 2010, Yahoo Finance reported GateHouse's market capitalization at $6.97 million dollars. Long term debt is reported at 1.195 BILLION dollars. Although principal payments are not due till 2014, the interest payments add up! The strategy for cutting expense laid out in the SEC report GateHouse filed at the end of last year, calls for consolidating as many administrative and management jobs as possible. Gauging from the comments in the SEC plan and looking at the total number of properties, I would predict 30-40% of Gatehouse employees will lose their jobs in 2010. The question is, can the company survive? It's an extremely big ship. Although water logged, the crew has time to do damage control. Personally, I think chances are slim at best that this company will stay afloat. My advice to any prospective job applicants would be to run away from this company as fast as you can.
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