Update: Shareholders of New Media Investment Group, which owns GateHouse, voted this morning to approve the purchase of Gannett. Gannett votes at 10 AM.
Good morning, New Jersey. It’s Election Day, again.
Gannett shareholders will vote today on a proposed sale to GateHouse Media, which will merge the two companies into the largest chain of daily newspapers in the nation.
It could also mean layoffs and buyouts for a number of familiar faces in New Jersey, which has ten Gannett dailies, plus two already owned by GateHouse.
The deal hit a snag on Wednesday when Gannett stock plunged to $7.13 — much less than the $10.70 price GateHouse. That reduces the value of the deal from $1.34 billion to about $1.1 billion.
The Poynter Institute for Media Studies reported on Wednesday that newsroom staff cuts could come as early as next week.
“The advisory to editors is that 65% of the savings come from compensation to staff or stringers,” according to Poynter.
That could be bad news for aging veterans of New Jersey journalism, like The Record’s Mike Kelly or the Asbury Park Press’ Randy Bergmann.
The interest on the deal is 11.5%, which guarantees huge budget cuts.
The News Guild-CWA, the nation’s top newspaper union, has opposed the deal and claimed it would cut jobs and drive down wages.
“This merger will hurt the communities these media organizations serve,” said union president Bernie Lunzer. “To fund the merger, local papers will likely disappear, jobs will be slashed, and journalism will suffer.”
Gannett currently operates The (Bergen) Record, the Herald News, the Daily Record, the Courier News, the Home News Tribune, the Asbury Park Press, the Courier-Post and the Daily Journal. GateHouse owns the Burlington County Times an the New Jersey Herald.
Within the last 27 years, New Jersey has dropped from 23 daily newspapers – all with local news bureaus and individual editorial boards – to 17 with staffs that are a fraction of the size of their past and in many cases, without editorial writers commenting on local issues.
Over the last fifteen years, the U.S. has lost about 1,800 local newspapers, with newsroom staff just 75% of what it was, according to a University of North Carolina study.
Gannett fought off a hostile $12 per share takeover bid by Digital First Media earlier this year. The hedge fund that owns Digital First — and 8.5% of Gannett — has said they will vote for the deal