Wednesday, November 20, 2019

Gannett Pledges to Avoid Cutting Journalism Jobs


The chief executive of the newspaper giant formed by the merger of USA Today publisher Gannett Co. and GateHouse Media said the new company would make deep cost reductions across its organizations, but pledged to avoid big layoffs of journalists, reports The Wall Street Journal.

The deal, which was agreed to in August and closed Tuesday, creates a local-news colossus that will control 261 daily newspapers and hundreds more weeklies in 47 states. The combined company would publish about 30% of all newspapers sold in the U.S. every day, according to data from Pew and the Alliance for Audited Media. The hope is that such scale will help the company survive amid rapid declines in print advertising and circulation while allowing it to better compete in a digital advertising market dominated by tech giants like Alphabet Inc. ’s Google and Facebook Inc.

A lot is riding on the deal: If even a newspaper owner of that size can’t succeed in the unforgiving publishing industry in coming years, the prospects for smaller local-news companies would appear even more grim.

When the acquisition of Gannett by GateHouse’s parent company, New Media Investment Group, was announced, the companies projected cost savings of up to $300 million, including significant job reductions. The new company said it intends to focus the cuts outside of its newsrooms.

“We are looking to protect as many of these jobs as possible,” Paul Bascobert, chief executive of the newly formed operating company, Gannett Media Corp., said in an interview. GateHouse has a record of making substantial editorial cuts at papers it owns. Gannett also has carried out major newsroom layoffs. The projected cuts amount to approximately 8% of the two companies’ combined 2018 operating costs of $3.75 billion. Together, the firms say they employ about 24,000 people, with some 5,000 in newsroom roles, half of which are involved directly in newsgathering and editing. Across the industry, editorial jobs in the U.S. have been nearly halved over the past decade, from 71,000 in 2008 to 38,000 in 2018, according to the Pew Research Center.

Bascobert and Michael Reed, who will be chairman and chief executive of the new Gannett Co. Inc., the publicly traded holding company that owns the operating business, said they believe most of the cuts will come from eliminating duplicate functions on the corporate and back-office level and from consolidating regional printing, distribution and copy-editing roles.



USAToday reports Bascobert outlined a strategy based on lead generation in local markets – similar, he said, to the approach taken by home services site Angie's List and Yelp, a reviews and directory service.

Need a plumber, for example? A Gannett publication could help you find one and then earn a fee for helping make that connection.

"This is really us beginning this pivot toward more of what I would call a software-based business model" rather than "an advertising-based business model," said Bascobert, who pursued a similar model while president of XO Group, owner of wedding planning site The Knot.

His vision would represent a significant overhaul. In the first nine months of 2019, more than 51% of the combined company's revenue came from advertising and marketing services.

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