Schumer steps into Gannett fray
Constituents would suffer if newspapers are closed, senator says
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.