Gannett-GateHouse merger: survival or downfall?
The country’s leading newspaper union issued an analysis of the proposed Gannett-GateHouse merger Friday, saying the deal would drive down wages and employment for journalists at the 250 daily newspapers.
They also said that hundreds of weekly and community papers the combined companies would own would also suffer the same fate, and would overcompensate GateHouse’s private equity backers, according to reports.
Some of the newspapers that would take the brunt include The Indianapolis Star, Journal and Courier in Lafayette, Star Press of Muncie, Palladium-Item of Richmond and Evansville Courier & Press; all owned by Gannett.
Others include, the South Bend Tribune, Times Mail of Bedford, Evening World of Spencer, Herald-Times of Bloomington, Hoosier Topics of Cloverdale, Reporter-Times of Martinsville and Mooresville-Decatur Times, all GateHouse owned.
The 11-page analysis produced by the union argues that the deal GateHouse and Gannett reached will unnecessarily lead to more cuts to the benefit of Wall Street investors. The deal calls for GateHouse parent New Media Investment Group to purchase McLean-based Gannett for $12.06 in cash and stock per share.
The union suggests in its report that private equity giants Fortress Investment Group and Apollo Global Management are getting the best of the deal.
When the companies announced the deal in August, New Media Chairman Michael Reed told shareholders that, should the deal be approved, it will “not only preserve but actually enhance the journalism in our local markets.” Gannett Chairman Jeff Louis said that “together, we will deliver on our shared commitment to journalistic excellence.”
The newspaper industry has been in steep financial decline for more than a decade and both companies have independently enacted a series of deep cuts to newsrooms in recent years, as have nearly all other publishers.
Fearing additional newsroom cuts, staff members at one of Gannett’s largest publications, the Arizona Republic, voted to unionize in Sep. in advance of the deal.
“If we had a vote, we would vote no,” Lunzer said in the union’s statement.