SEC examining GateHouse Media management structure

The Securities and Exchange Commission is examining the new management structure of GateHouse Media, the company that owns the Carthage Press, Neosho Daily News, Pittsburg Morning Sun and more than 300 newspapers.

SEC documents indicate the agency is interested in knowing just what GateHouse hoped to accomplish with its reorganization of its newspaper properties into three categories: Small Community Newspapers, Large Daily Newspapers, and Metro Newspapers.

In a letter from SEC Branch Chief Linda Cverkel to GateHouse CFO Melinda Janik dated September 13, the purpose of the change was the focus:

We also note the new reporting units, Small Community Newspapers, Large Daily Newspapers, and Metro Newspapers, have all been aggregated into one reportable business segment.  As these reporting units appear to target different markets, advertising packages, and circulation patterns, please explain to
us how management considered each factor in ASC Topic 280-10-50-11 in determining that the aggregation of all operating segments into one reportable segment is appropriate.  As part of your response, please provide us with an organizational flowchart of the reorganized management structure and tell us how resources are allocated to the operating segments.  Please also provide us with discrete separate financial information for each operating segment and a representative copy of the discrete financial information that is regularly furnished (on a quarterly or annual basis) to the CODM.  We may have further comment upon receipt of your response. 

Ms. Janik responded to the SEC letter with a lengthy, convoluted explanation of the change.

A Nov. 14 letter from Ms. Cverkel to Ms. Janik indicated the review of GateHouse has been completed.

We remind you that our comments or changes to disclosure in response to our comments do not foreclose the Commission from taking any action with respect to the company or the filings and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.  We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings to be certain that the filings include the information the Securities Exchange Act of 1934 and all applicable rules require.