MASS. PAPERS IN $3.3B DEAL
Analysts don’t expect drastic changes
The fate of more than 100 Massachusetts newspapers might be tangled up in a $3.3 billion corporate deal between Tokyo’s SoftBank and New York private equity firm Fortress Investment Group — but media experts say the grand strokes of the deal are not expected to affect newsrooms or morning papers anytime soon.
Gatehouse Media — parent company of the Patriot Ledger, the Worcester Telegram, the Cape Cod Times, the New Bedford Standard Times, the Brockton Enterprise, the MetroWest Daily News, the Providence Journal and more than 400 newspapers and websites in 31 states — is run by Fortress, whose bosses will reside half a world away in Japan if the merger is approved.
The tectonic changes are likely to keep the status quo intact, if only because the approximately $20 million Gatehouse pays Fortress every year pales in comparison to SoftBank’s $16 billion in revenue, Boston University journalism professor Lou Ureneck told the Herald.
“The value of Gatehouse is a tiny, tiny fraction of the values (of) these companies,” Ureneck said. “My sense is that it’s going to be more of the same: extremely lean news budgets and an emphasis on improving profit margins by reducing the number of reporters and editors.
“I would be shocked if there was any reinvestment in these organizations as a consequence of this ownership change. … If Fortress remains in the driver’s seat with Gatehouse Media, we’ll see this continued policy of squeeze, squeeze, squeeze,” he added.
Rick Edmonds, media business analyst for The Poynter Institute, said Gatehouse — known as the New Media Investment Group — has been chugging along, producing decent money for investors and expanding its footprint.
“I wouldn’t necessarily expect any changes,” Edmonds said. “If New Media Investment had been sold as a piece to somebody else, that would be a different story.”
For its part, SoftBank said it plans to leave senior employees at their posts and Fortress will be run “within SoftBank as an independent business headquartered in New York.”
SoftBank CEO Masayoshi Son said Fortress will help it invest at a time when the company is launching an ambitious $100 billion fund that’ll invest in technology companies around the globe — half of which Son promised President Trump he’d spend in the United States.
Fortress shareholders need to approve the deal, which is also subject to regulatory approvals. It is expected to close in the second half of this year.