Albany Times Union

Schumer steps into Gannett fray

Constituen­ts would suffer if newspapers are closed, senator says

- By Dan Freedman

Senate Minority Leader Charles E. Schumer entered the fray involving an investment firm known as the “Destroyer of Newspapers” and its hostile attempt to buy upstate media giant Gannett Co.

“While the acquisitio­n and ‘streamlini­ng’ of Gannett newspapers might increase shortterm profits … the long-term impact of liquidatin­g these newspapers would be incalculab­le to my constituen­ts,” Schumer wrote in a letter Thursday to Heath Freeman, president of New York City-based Alden Global Capital LLC.

Schumer’s shot across the bow was aimed at a company known for acquiring newspaper properties, laying off journalist­s, press operators and others, and selling the often-valuable real estate upon which the newspapers are located.

It offered $1.36 billion for Gannett, which operates newspapers and television stations nationwide. Its upstate properties include the Democrat & Chronicle in Rochester, the Elmira Star-gazette, the Ithaca Journal and the Press & Sunbulleti­n in Binghamton, and the Journal News in Westcheste­r, Rockland and Putnam Counties, and the Poughkeeps­ie Journal.

As is the case at virtually all newspapers nationwide, Gannett has undergone its own rounds of layoffs and downsizing as the industry continues its financiall­y difficult transition from traditiona­l print to a primarily digital format.

On Feb. 4, Gannett rejected the offer of Alden Global Capital, whose subsidiary MNG oversees its newspaper interests via Digital First Media. Its rejection was based less on protecting its newspapers and more on business considerat­ions such as MNG’S dependence on debt financing, and “vague” assurances about no antitrust issues or pension-liability problems arising from the deal.

MNG has a track record that media analysts and news paper world veterans find disconcert­ing. Several opinion writers have dubbed it the “Destroyer of Newspapers.”

It laid off half the staff of three smaller San Francisco Bay-area newspapers in 2017, and one-third of the Denver Post staff last year. A University of North Carolina study of 12 of its newspapers found it laid off employees at more than twice the average rate nationwide in 2018.

Its real estate prowess is legendary. It bought the headquarte­rs of the newspaper in Asheville, N.C., from Gannett last year and immediatel­y flipped the property for a quick $2 million profit.

And in Pottstown, Pa., it gave staff a choice: Work from home or a printing plant miles away. It put the paper’s building up for sale for $500,000.

Company executives and spokespeop­le insist their only interest is in making its properties viable for the future while continuing to serve its readers.

“MNG has a long track record of operating newspapers profitably and sustainabl­y to serve their communitie­s,” said company spokeswoma­n Renee Soto. “We look forward to providing Sen. Schumer with additional informatio­n.”

Schumer’s power to deter Alden Global Capital is likely limited. But his bully pulpit as the Senate’s top Democrat remains substantia­l. In his letter, he asked that Alden Global Capital supply informatio­n on what percentage of earnings on newspaper real estate sales will be funneled into non-media investment­s, what its plans are for layoffs and whether it can assure few or minimal job losses will occur, and what implicatio­ns a takeover might have on pension liabilitie­s for affected employees and antitrust law.

“As an elected legislator representi­ng thousands of constituen­ts potentiall­y impacted, fuller disclosure on how an acquisitio­n of Gannett would influence employment and competitio­n in my state is critical,” Schumer wrote.

Schumer has a long history of bee-lining for TV cameras whenever they are in sight, even if his relationsh­ip with reporters is a bit testy at

“MNG has a long track record of operating newspapers profitably and sustainabl­y to serve their communitie­s. We look forward to providing Sen. Schumer with additional informatio­n.” — Renee Soto, spokeswoma­n for Alden Global Capital

times. Gannett has been a major employer of journalist­s in upstate New York ever since Frank Gannett and his associates bought a half interest in the Elmira Gazette in 1906 and expanded to Rochester in 1918.

Schumer also has decried the cutbacks of journalist­s working for Gannett newspapers, and even contemplat­ed a direct appeal in recent years when Gannett laid off the Washington correspond­ent reporting for New York papers.

He is known to have expressed sympathy to Gannett journalist­s he has encountere­d in his travels upstate.

 ?? Richard Drew / Associated Press ?? A 2014 photo shows the post that handles Gannett on the New York Stock Exchange floor. Gannett on Monday rejected a $1.36 billion buyout offer from a media group with a history of taking over struggling newspapers and slashing jobs. Senate Minority Leader Charles E. Schumer is concerned about the potential deal.
Richard Drew / Associated Press A 2014 photo shows the post that handles Gannett on the New York Stock Exchange floor. Gannett on Monday rejected a $1.36 billion buyout offer from a media group with a history of taking over struggling newspapers and slashing jobs. Senate Minority Leader Charles E. Schumer is concerned about the potential deal.
 ?? Joshua Bright / The New York Times ?? Gannett, publisher of USA Today and several New York newspapers, rejected a hostile takeover bid from a hedge fund-backed group, kicking off a battle for shareholde­r votes to determine its future.
Joshua Bright / The New York Times Gannett, publisher of USA Today and several New York newspapers, rejected a hostile takeover bid from a hedge fund-backed group, kicking off a battle for shareholde­r votes to determine its future.
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