The merger of Gatehouse Media and Gannett is just a bigger coffin in the death of newspapers. Let’s be realistic. It is not an optimistic development but the opposite. It means more consolidation and fewer independent voices. There will be more newsroom layoffs.
Each company has grappled with sharp declines in circulation and ad revenues caused by Cable TV, online news, and social media. The merger is another sign that the stakes are high for the fate of for-profit print journalism, which hangs in the balance as the newspaper industry staggers from the blows of the new digital world of Google, Facebook and smartphones.
The combined operation hopes to cut costs by $275 to $300 million dollars in the next two years and have the time to build sustainable online digital operations for the papers it owns.
Gatehouse brings 154 daily newspapers in small and medium markets to the new company while Gannett adds USA Today, which is distributed nationally, plus 100 or so more medium sized regional papers for a total of 260 daily papers. The two companies also own some 1,600 weeklies. Gatehouse will own 50.5 per cent of the new company and Gannett 49.5 per cent but the combined company will take the Gannett name and the headquarters will be at the current Gannett offices in McLean, VA.
The new company will begin with a combined print circulation of 8.7 million readers, the largest by a single owner in the United States. Based on the histories of Gannett and Gatehouse, I would say that the new company will be slightly right of center in editorial policy.
The big question is digital operations. Can the combined company make a successful transformation to a mainly digital operations in the two-year window it is giving itself to do so? Presently, Gannett papers have about 561,000 digital subscribers with the bulk of them, 504,000, at USA Today. The Gatehouse papers have 174,000 digital subscribers.
It seems to me that building a healthy digital base in two years will be a tough hill to climb.
So, it goes!