Gannett, Now Largest U.S. Newspaper Chain, Targets ‘Inefficiencies’

Mr. Reed and Mr. Bascobert, who spoke with The New York Times at the USA Today office in Midtown Manhattan, said the savings they had in mind amounted to 8 percent of annual costs. “So it’s not an overwhelming number — very achievable,” Mr. Reed said.

The News Guild, which represents journalists at many of the company’s newspapers, has been critical of the merger. The union “intends to hold managers of the new Gannett to the promises they have made,” the News Guild president, Bernie Lunzer, said in a statement. “We will continue to demand that they fund high-quality journalism.”

Mr. Reed said he would make newsroom decisions with the help of data that tracked reader interest and the output of journalists. “The ability to measure production at the reporter level allows us to get stronger and healthier and do more quality local journalism with the same amount of resources, potentially,” he said.

He seemed aware that his stats-based approach to newsroom management was not likely to sit well with the union. “The Guild would fight me on that, and say, ‘We should do business like it’s 1950,’” Mr. Reed said, adding, “I frankly think the Guild’s a big problem, and until we can get them to sit at a table and have a real discussion about where the world is today, there’s going to be inefficiencies.”

Douglas Arthur, an analyst at Huber Research Partners, questioned Gannett’s approach, noting that New Media Investment Group and Gannett had missed revenue projections in the most recent quarter. “The only way they can support it,” Mr. Arthur said, speaking of the newspaper industry in general, “is to cut costs. And it feeds on itself: Subscribers go down, advertisers pay less.”

The merger raises another question: What does it mean that the beleaguered newspaper industry, considered essential to democracy, is controlled by ever fewer corporations, many of them with a focus on finance rather than covering the news?

The supersize version of Gannett has a byzantine corporate structure. It will be managed, under an agreement that lasts two more years, by Fortress Investment Group, a private equity firm in Manhattan. Fortress was the entity that controlled New Media Investment Group, the parent of GateHouse Media.

Article source: https://www.nytimes.com/2019/11/19/business/media/gannett-gatehouse-merger.html?emc=rss&partner=rss