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Gatehouse cuts jobs to the marrow while spending $100 million on stock

Friday, May 24, 2019

* Hmm

Shareholders of the parent company of newspaper chain GateHouse Media Inc., New Media Investment Group Inc., rejected a proposed compensation plan that includes $1.7 million for GateHouse CEO Kirk Davis.

The vote, which occurred Thursday, comes as shares of New Media Investment Group (NYSE: NEWM) are trading at all-time lows, and less than a month after the company’s longtime chairman, Wesley R. Edens, resigned from that role and was replaced by New Media CEO Mike Reed.

The vote also coincided with the eliminations of dozens of jobs at GateHouse-owned newspapers, including at least six journalists at the Providence Journal, another six at the Worcester Telegram & Gazette, and several more at the New Bedford Standard-Times and the Herald News in Fall River.

* That might seem satisfying to Gatehouse haters, but scroll down

In addition to the vote on compensation, shareholders on Thursday also approved the company spending $100 million to buy back its own stock, a measure that’s typically taken by companies to increase their share price.

* $100 million could employ a whole lot of Gatehouse reporters

Another major blow for newspapers. GateHouse Media, one of the largest publishers in the United States with 156 daily newspapers and 328 weeklies, slashed jobs across the country Thursday. The official number is unknown, but it appears to be at least several dozen. […]

The Columbus Dispatch cut six positions [Thursday], including feature columnist Joe Blundo, who volunteered to cut back to one column a week. […]

Six were laid off from the Worcester (Massachusetts) Telegram & Gazette and, in a tweet, Worcester Magazine’s Bill Shaner said the magazine’s editor, Walter Bird, and arts editor, Josh Lyford, were laid off, leaving Shaner as the only full-timer left.

At the Daily Commercial in Leesburg (Florida), two were let go, including executive editor Tom McNiff. The paper is now left with just six people to put out a seven-day-a-week paper. Three were let go at The St. Augustine (Florida) Record, including its executive editor. Other Florida papers impacted included the Gainesville Sun and Ocala Star-Banner.

The Beaver County (Pennsylvania) Times laid off an employee who had been at the paper for 35 years. That newsroom had 60 staffers in the early 2000s, but is now down to 12 to put out a three-section paper six days a week. […]

There were also cuts at the Canton (Illinois) Daily Ledger and Tuscaloosa (Alabama) News, including Ben Jones, who covered the University of Alabama football program. Other jobs were eliminated at the Hagerstown (Maryland) Herald-Mail and several papers in in Illinois, including the Peoria Journal Star and Rockford Register Star.

* WEEK TV

GateHouse Media is making another round of layoffs at newspapers across the country, and Central Illinois isn’t coming out unscathed.

Peoria Journal Star staff photographer Ron Johnson was informed of his layoff while covering the Greater Peoria Honor Flight in Washington, D.C., a source said. Two copy editors with decades of experience were also laid off Thursday. Pagination was recently outsourced from Peoria to GateHouse’s hub in Austin, Texas. […]

At the Canton Daily Ledger, sports editor Shelby Burget tweeted he was laid off at 1 p.m. Thursday. Pekin Daily Times executive editor Jeanette Brickner’s last day was Thursday. Galesburg Register-Mail columnist Tom Loewy was also eliminated.

* Rushton

“The thing that we always have to think about and remember is that our first objective is always what’s the best thing for our shareholders, since we’re a public company,” [Michael Reed, GateHouse chief executive officer] told Doctor. This month, New Media Investment Group, GateHouse’s holding company, paid nearly $100 million in dividends, mostly to institutional investors. At 38 cents per share, the dividend has risen while the stock price has declined, from $25 in 2015 to $10 today, with same-store revenue falling by more than 5 percent annually in 2017 and again in 2018. Lee Enterprises, which owns the St. Louis Post-Dispatch and 45 other papers, hasn’t paid a dividend since 2008. Gannett, second only to GateHouse in number of papers owned, sliced its dividend in 2015 and most recently paid 16 cents per share.

Against this backdrop, SJ-R editor Angie Muhs, once a GateHouse Editor of the Year, resigned this month and was walked out of the building. She reportedly told her staff she hoped her departure would save sufficient salary to prevent more layoffs. She might have been gone no matter what – GateHouse has signaled a move to centralized management that would have a single editor assigned to oversee multiple newspapers.

- Posted by Rich Miller        

17 Comments
  1. - Jeremy Karliin - Friday, May 24, 19 @ 11:18 am:

    At the Galesburg Register Mail they lost a long time columnist, Tom Lowey, and long time photographer, Steve Davis. Both had won numerous awards for their reporting. It appears there is now only one news reporter covering the whole area. So senseless.


  2. - HorseShoe - Friday, May 24, 19 @ 11:29 am:

    A reporter once told me that it was a myth that newspapers don’t make money and that it’s more like they don’t make enough to satisfy profit obsessed owners. They start cutting everything to increase short term profits and when the newspaper begins to fail long term they just move on to the next thing leaving a once we’ll respected newspaper as a shallow husk.

    Companies like gatehouse are vampires. They don’t care about what industry they are in, it’s just satisfying increasingly higher demands of profits. And you see this in more then just the newspapers.


  3. - Rabid - Friday, May 24, 19 @ 11:34 am:

    Artificial boosting to get out leaving the rest holding the empty bag


  4. - Honeybear - Friday, May 24, 19 @ 11:39 am:

    This is what should have been done years ago.
    It’s about time the owner/investors have their say.
    Buying back stock and dividends are the way to go.
    There’s plenty more to suck out of these companies before we move on.
    Besides these new Journalism grads practically work for free
    And even then you can score Journalism students
    for free as, get this, “Unpaid Interns”
    When those run dry don’t forget, there are a lot of great High School newspaper kids producing great stuff.
    Besides who reads newspapers anyway?
    s/

    And we wonder
    how we got to this point

    Capitalism
    boils frogs in the pot
    slowly


  5. - Not a Billionaire - Friday, May 24, 19 @ 11:51 am:

    Well here is something that can be done . Illinois pension funds have a lot of investments in these but out funds. They need to take a hard look at them including the new media. All I can say is what they tell the IRS looks nothing like what the tell the SEC. There will be a lot of crying here if it turns out a lot of these outfits are…..


  6. - Jocko - Friday, May 24, 19 @ 11:56 am:

    Meanwhile, Mark Zuckerberg is fine with continuing to use political ads on his platform despite either getting played (or taking part in gaming) the American political system


  7. - Da Big Bad Wolf - Friday, May 24, 19 @ 12:07 pm:

    When Gatehouse cuts journalism jobs, that’s their product. How much value can their stock retain if they deliver less product? Who will advertise in a paper less people read?


  8. - lakeside - Friday, May 24, 19 @ 12:07 pm:

    ==our first objective is always what’s the best thing for our shareholders==

    I understand (though do not agree with) the strip mining of assets, etc. that these vultures engage in, but what is the endgame? Eventually there won’t be any pieces left and then won’t the share price collapse? Or do they then just declare bankruptcy and run away with what’s left?

    I guess I just fundamentally don’t understand getting into business without the goal to grow the business. Guess that’s why I don’t have a mansion.


  9. - wordslinger - Friday, May 24, 19 @ 12:15 pm:

    –In addition to the vote on compensation, shareholders on Thursday also approved the company spending $100 million to buy back its own stock, a measure that’s typically taken by companies to increase their share price.–

    Legal pump-and-dump, just another tool of the self-dealing vampire capitalist class.

    They ain’t builders in it for the long run. They’re bustout artists.


  10. - Shemp - Friday, May 24, 19 @ 12:40 pm:

    So if capitalism is the scourge, the alternative is a government subsidized “free” press? The ease of information sharing has helped kill newspapers and other news media. I don’t know what the model is that saves local journalism, but I hope someone figures it out soon. I just know it has to be a solution born in capitalism, otherwise it will never be a free press.


  11. - Cheryl44 - Friday, May 24, 19 @ 12:50 pm:

    Even shareholders benefit from a strong, free press.


  12. - Millennials v. Paywalls - Friday, May 24, 19 @ 12:50 pm:

    “At the SJ-R, circulation has plummeted to less than 19,000; in 2010, more than 50,000 people paid to read the paper each day.” -Rushton

    Even local news is mostly free on the intertubes’ google-machine….am sure some new generation will figure a better way for print to make money at some point


  13. - Anon221 - Friday, May 24, 19 @ 12:55 pm:

    It’s happening across the country, too.

    https://blogs.mprnews.org/newscut/2018/05/big-profits-at-pioneer-press-as-corporate-parent-destroys-it/

    My view- this method is just one more way to limit access to knowledge, in-depth reporting, and uncovering what may some what covered up. That’s what reporters and journalists do best. They help educate the public. They bring to light problems within communities. They present the varying views and voices of a story. Instead these hedge funders and vulture capitalists would rather cultivate the public as “mushrooms” while they pocket the profits of their “composting”.


  14. - Wylie Coyote - Friday, May 24, 19 @ 12:58 pm:

    I’d guess that by this time next year Peoria, Lincoln, Canton and Springfield will merge into one regional paper and you’ll never know the difference since the best columnist in the Springfield paper is based in Peoria and the only Springfield-based columnist is so one-sided he could PO the readers of all four papers…… combined…..


  15. - Leave a light on George - Friday, May 24, 19 @ 1:07 pm:

    How many commenters on here sole source of news is this blog? Hmmm…


  16. - Da Big Bad Wolf - Friday, May 24, 19 @ 1:39 pm:

    ==How many commenters on here sole source of news is this blog?==
    I don’t know. Folks here seem rather well read.


  17. - Anyone Remember - Friday, May 24, 19 @ 1:45 pm:

    Showing my age - who remembers, pre-Reagan, when corporate stock buybacks were illegal stock price manipulation?


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