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The proposed merger of Gannett and GateHouse, which affects a majority of the daily newspapers in New Jersey, would cuts jobs and drive down wages, according to a report from the nation’s top newspaper unions.
“This merger will hurt the communities these media organizations serve,” said Bernie Lunzer, the president of The News Guild-CWA (TNG-CWA). “To fund the merger, local papers will likely disappear, jobs will be slashed, and journalism will suffer.”
None of the New Jersey-based daily newspapers affected by the proposed merger, which is set for a shareholders vote on November 14, covered complaints about the deal from the union in their newspapers.
The $1.34 billion deal create the largest print media chain in the U.S. would cut jobs to benefit Wall Street investors, according to an analysis prepared by the union.
“It’s hard to see how anyone can see this as anything more than a callous piece of financialization meant to create short-term profit at the expense of the newspapers whose employees strive every day to shed light on darkness,” said Lunzer. “Gannett investors should look at our information and take it seriously. It is hard to see anything of value in this deal, and we believe it is fatally flawed.”
GateHouse has been discarding employees since it went public five years ago, TNG-CWA claims, especially upon acquiring new newspapers.
“Typically, GateHouse consolidates copy editing and page design at its Austin, Texas, shared services unit. It then targets experienced and older — and therefore more expensive — reporters for layoff or buyouts,” the report said.
That could mean pink slips for aging veterans of New Jersey journalism, like The Record’s Mike Kelly or the Asbury Park Press’ Randy Bergmann.
According to Penelope Muse Abernathy, an academic and an expert on the business of print journalism, “GateHouse-owned newsrooms are often half the size within a matter of months” of acquisition.
The report notes that GateHouse “does not announce the precise numbers or track job cuts accomplished through layoffs and buy-outs.”
“Already in 2019, GateHouse has had significant job cuts in February, May, and August,” the report claimed.
If the deal wins shareholder approval, the two chains would operate under the Gannett name.
It would also mean 15 of 17 New Jersey daily newspapers would be under the control of two national media chains.
TNG-CWA represents 1,200 members from 33 newspapers owned by Gannett ad Gatehouse.
The report says that the cost savings touted by Gannett and GateHouse would reduce the headcount of their newspapers by 10% — nearly 2,500 journalism jobs nationally. It said that Gannett’s claim that cuts would come mostly from outside the newsroom would “still weaken news organizations.”
“For those stakeholders concerned about the fate of journalism, the GateHouse approach to news has to be worrisome,” the union report said. “Stripping news staffs to bare bones – in ways that mimic the behavior of Alden Global Capital – means certain activities are no longer funded and news organization cannot play the role of independent oversight of elected officials and private organizations.”
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 and is in the process of purchasing 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 takeover bid by Digital First Media earlier this year.
Executives from Gannett and other large newspaper chains were in Washington in September to seek a four-year immunity from anti-trust laws to help them battle competition from tech platforms like Facebook and Google.