The Reporter (Lansdale, PA)

Newspaper chain GateHouse buying Gannett


NEW YORK >> Two of the country’s largest newspaper companies have agreed to combine in the latest media deal driven by the industry’s struggles with a decline in printed editions.

GateHouse Media, a chain backed by an investment firm, is buying USA Today owner Gannett Co. for $12.06 a share in cash and stock, or about $1.4 billion.

The combined company would have more than 260 daily papers in the U.S. along with more than 300 weeklies. It would be the largest U.S. newspaper company by far, with a print circulatio­n of 8.7 million, 7 million more than the new No. 2, McClatchy, according to media expert Ken Doctor.

The companies said Monday that the deal will result in up to $300 million in annual cost savings and help speed up a digital transforma­tion.

Newspaper consolidat­ion has picked up as local papers find it hard to grow digital businesses and replace declines in print ads and circulatio­n. Although papers with national readership­s like The New York Times and The Washington Post have had success adding digital subscriber­s, local papers with local readership­s are having a difficult time. Hundreds of such papers have closed, and newsrooms have slashed jobs.

According to a study by the University of North Carolina, the U.S. has lost almost 1,800 local newspapers since 2004. Newsroom employment fell by a quarter from 2008 to 2018, according to Pew Research, and layoffs have continued this year.

Both GateHouse and Gannett are known as buyers of other papers.

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