With­out in­vest­ment in jour­nal­ism, Gate­House model won’t yield long-term suc­cess

Newspapers & Technology Magazine - - News - Ta ra mcmeekin Editor-in-chief

One bil­lion dol­lars in ac­qui­si­tions in a three-year pe­riod seemed like a lofty goal when New Media In­vest­ment Group CEO Mike Reed made the procla­ma­tion ear­lier this year, but it ap­pears the com­pany will hit its mark.

In just the past year, the Gate­House Media par­ent has shelled out ap­prox­i­mately $476 mil­lion for Stephens Media LLC and its flag­ship Las Ve­gas Re­view-Jour­nal, Hal­i­fax Media, the Providence (R.I.) Jour­nal and, most re­cently, The Colum­bus (Ohio) Dis­patch and its Dis­patch Print­ing Co. It’s funded the deals through a mix of new debt, stock sales and op­er­at­ing cash flow.

Buy­ing The Dis­patch may prove to be its best move yet. Aside from its mar­ket po­si­tion and size, the pa­per so­lid­i­fied its fu­ture three years ago when it be­came the first in the world to com­mit to a three-around print­ing plat­form. The move trans­formed the daily into a fully sec­tioned com­pact broad­sheet, shav­ing some 33 per­cent off of its newsprint bill and land­ing it a con­tract with Gan­nett Co. Inc. to print The Cincinnati In­quirer and Ken­tucky En­quirer. All of that con­sid­ered, the pur­chase price of $47 mil­lion cer­tainly ap­pears to be a steal.

In this era where we talk end­lessly about dig­i­tal and mo­bile growth Gate­House, has po­si­tioned it­self for suc­cess by snap­ping up pa­pers with lit­tle mar­ket com­pe­ti­tion, whose dig­i­tal prof­its have nowhere to go but up and whose print prod­ucts are still strong.

What re­mains to be seen, how­ever, is whether or not Gate­House will change its pat­tern of hand­ing down lay­offs at the pa­pers it buys. The com­pany con­tin­ues to make ma­jor cuts in copy-edit­ing and de­sign across ti­tles since it shifted those func­tions to its Cen­ter for News and De­sign in Austin in 2013. De­spite all of Gate­House’s re­cent suc­cesses, dis­re­gard­ing the core busi­ness of news­pa­pers — jour­nal­ism — won’t foster any real suc­cess long term.

Be sure to check out our page-6 story for more on Gate­House’s re­cent pur­chases and an in-depth look at the chang­ing face of news­pa­per own­er­ship.

This is­sue also takes a look at how news­pa­pers’ pay­wall ini­tia­tives have evolved since N&T first be­gan cov­er­ing dig­i­tal sub­scrip­tions nearly a decade ago. It was fas­ci­nat­ing to take a look back at news­pa­pers early strate­gies, the lessons they’ve learned and what’s work­ing now.

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