Saturday, March 25, 2017

Gatehouse Media cuts jobs at Carthage Press, Neosho Daily, spending $200 million to buy more newspapers

At the same time that it is chopping the Carthage Press, Neosho Daily News, and its other newspapers to mere skeletons of what they once were, Gatehouse Media is moving full speed ahead on its plan to buy as many newspapers as it can.

In a February 17 filing with the Securities and Exchange Commission (SEC), Michael E. Reed, CEO of New Media Investment, Gatehouse's parent company, and former Gatehouse CEO, made it clear his company was ready to spend big money- $200 million- to add to its collection of hundreds of newspapers, including 15 in Missouri.

“During the quarter, we successfully closed our previously-announced acquisitions of the Columbia Daily Tribune and Rochester Business Journal, and announced and closed the acquisition of Harris Enterprises for $20.4 million. The Harris papers are a great complement to our footprint in Kansas and Iowa and have been serving their communities with quality local news and information for over a century. We were also pleased to recently announce and close our first deal for 2017, the acquisition of the publishing division of the Wooster Republican Printing Company for $21.2 million. This Ohio based group is a great strategic fit with our existing Ohio cluster. With this acquisition, we have now completed over $735 million of transactions since inception, completing eight transactions in 2016, the highest number of acquisitions we have done in any single year. With over $200 million in liquidity, New Media is well positioned to take advantage of more great acquisition opportunities at attractive valuations in 2017.

At the same time it was announcing that it was willing to spend hundreds of millions on newspapers when it has shown no ability to run the ones it already has, Gatehouse also announced it had a 
$27 million "cost reduction program" for 2017.

That "cost reduction program" includes the decision to cut the Carthage Press to one day a week, the Neosho Daily and the Miami News-Record to twice a week and the Pittsburg Morning Sun to five times a week.

It also led to the elimination of jobs including the job of Press reporter Becca Haines.

Also losing their jobs, though technically they do not work for the Press, but are legally considered to be independent contractors, those who have delivered the Press to homes all over Carthage and the surrounding area, have been told their services are no longer needed.

3 comments:

Anonymous said...

And your suggestions for how to fix declining subscriptions and decreased ad revenue?

Paul Wilson said...

The Carthage Press could survive, swimmingly, on a stand alone basis. But it can not endure the corporate overheads charged against it by its parent.
They operate from a building 5 times bigger than they need, are charged above market rates to be there and have no choice but to stay.
In a real world, they could lease 700sq ft on the satiate for $500 a month, slash their rent and utilities to a fraction of what they are today.
A myriad of things could change and make them viable, successful, but they are powerless to change it as they aren't in control of their destiny.
That leaves you pretty powerless and hopeless.

Anonymous said...

@ Paul,

Carthage is a victim of Sheldon Adelson and the oligarchs running this country. Gatehouse doesn't pay taxes on earnings because of the bankruptcy they filed in 2013 over their losses. Ala Donald Trump, they carry no tax burden as a result. The private equity firm controlling Nee Media certainly had no problem wiping out the Las Vegas Review Journal's readership, employees, and reputation to allow billionaire Adelson the forum to go after a judge until the reporters refused. The slash and burn takeovers result in dividends for the equity firm, whose investors will sell the inflated stock prices to a hungry market, removing theirselves from risk when the house of cards falls. Folks nostalgic for the feel and smell of the hometown newspaper must now rely on their local news from bloggers like Randy. I am encouraged by local advertising seen on this site and am hopeful for its growth.