Tuesday, August 6, 2019

Commercial Appeal Ownership to Change (Again)

Posted By on Tue, Aug 6, 2019 at 12:09 PM

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New Media Investment Group, parent company of GateHouse Media, and Gannett, the corporation that currently owns and publishes the Memphis Commercial Appeal, have announced a merger.

A New Media Investment Group spokesman said that the company had arrived at an agreement to acquire Gannett (GCI) for a combination of stock and cash. Gannett publishes USA Today, in addition to many well-known local newspapers, including most major Tennessee dailies. GateHouse Media operates in 612 markets in 39 states.

According to the press release announcing the merger, Gannett shareholders will own 49.5 percent of the new company, and New Media shareholders will own 50.5 percent.

The deal is reportedly worth $1.38 billion. The combined company will be called Gannett and will be based at Gannett's headquarters in McLean, Virginia. The merger means that the new company will own around one-sixth of all newspapers in the United States.

The press release said the merger will mean estimated annual savings of around $275 to $300 million and would help the new Gannett save on technology and human resources, and accelerate its "digital transformation." Saving on "human resources" has often meant layoffs in newspaper company mergers.

"We believe this transaction will create value for our shareholders, greater opportunities for our employees, and a stronger future for journalism," said Michael Reed, chief executive of New Media.

Both companies issued memos to their employees Monday. The Poynter Institute published copies of them here.

Daniel Connolly, president of the Memphis Newspaper Guild at The Commercial Appeal said: “Here in Memphis, we haven’t had a chance yet to meet and discuss the merger news as a local labor union, though I know from talking with some of our members individually that they’re very interested in it.

The obvious question is whether we’ll have additional job cuts here in Memphis. Right now, we don’t know.

At the national level, The NewsGuild leadership is following this issue very closely and studying what it means for our unions and employees. We’ll need to get a briefing on this merger from the subject-level experts who are reviewing it, and we may be able to stake out a more definite position once we learn more.”

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