For-profit

GateHouse Media

Website:

www.gatehousemedia.com

Type:

National Newspaper Publisher

Parent Company:

New Media Investment Group

Chief Executive Officer:

Michael Reed

Chairman:

Wesley R. Edens

Employees (2018):

10,638 [45]

Financials (2018):

Revenue: $1.53 billion

Net income: $18.2 million [46]

GateHouse Media is the largest publisher of daily newspapers in the United States, as measured by number of distinct publications. [1] It is owned by New Media Investment Group, and as of 2019 was publishing 146 daily newspapers with a combined paid circulation of 1.6 million. [2] [3]

New Media Investment Group owns and GateHouse manages the Austin American-Statesman, the Columbus Dispatch, and The Oklahoman, among other prominent publications. [4] As of the end of 2018 New Media employed 10,638 employees and reported total revenue of more than $1.53 billion, with net income of $18.2 million. [5]

In August 2019, New Media Investment Group acquired Gannett, which is the media company that owns USA Today along with 100 other publications and marketing services. [6]

New Media also owns subsidiaries that provide enterprise services to other businesses. New Media seeks to become a trusted local business in the communities where it purchases publications, and then leverage this connection to sell human resources, information technology, marketing and other services to local small- and medium-sized firms. New Media’s strategy assumes this revenue source will become the more lucrative replacement for declining advertising and circulation revenue. [7]

GateHouse daily newspapers’ editorial positions may be right-of-center or left-of-center, depending upon the newspaper. [8] [9] Wesley Edens is chairman of the board of New Media and has been a large donor to political committees promoting the Democratic National Committee and the 2016 presidential campaign of Hillary Clinton. [10] [11]

Background

GateHouse Media is the largest publisher of daily newspapers in the United States, as measured by number of distinct publications. [12] By the start of 2019, it published 146 daily newspapers with a combined paid circulation of 1.6 million. [13] It also has 331 weekly newspapers, and in total has a print media footprint in 37 states. [14] As of April 2019 there were six states that each contained ten or more daily newspapers produced by GateHouse: Florida (12 GateHouse dailies), Illinois (14), Kansas (10), Missouri (10), North Carolina (11) and Ohio (10). [15]

Since 2013 GateHouse Media has been an operating company of New Media Investment Group. [16] In 2013 GateHouse was restructured in a chapter 11 bankruptcy, with New Media created by GateHouse’s then-creditors to become the new owner. [17]

Wesley R. Edens, a former partner and managing director at the investment firm Lehman Brothers, is chairman of the board of New Media, and a principle at Fortress Investment Group, an affiliate of the firm that manages New Media. [18] Edens is a large donor to Democratic politicians and political committees, with total federal donations exceeding $140,000 during the 2016 election cycle – the majority of which went to political committees promoting the Democratic National Committee and the Presidential campaign of Hillary Clinton. [19]

The CEO of GateHouse Media since 2014 has been Kirk Davis, a professional newspaper executive and Associated Press board member who began working for GateHouse in 2006. Davis also serves as the COO of New Media. Michael Reed, also with professional experience managing in the newspaper industry, is the CEO of New Media and was previously the CEO of GateHouse. [20] [21]

As of the end of 2018 New Media employed 10,638 employees and reported total revenue of more than $1.53 billion, with net income of $18.2 million. [22]

Business Model

Unlike traditional print media organizations, advertising and circulation growth are not the revenue model New Media has been built to rely upon for the long term. Instead, using other divisions under the New Media umbrella, the company seeks to become a provider of human resources, information technology, financing assistance and other services to small and medium-sized businesses in the communities where it establishes a local print media presence. To that end, the company purchases print media properties (including daily newspapers) in medium and smaller markets where the publication has significant local market penetration and is a dominant source of local news. [23]

Explaining the strategy in June 2018, New Media CEO Mike Reed noted the objective of becoming a trusted local business that sells to other local businesses: “We’re never going to beat Google and Facebook in advertising. Let’s focus on what we can beat them at, and that’s being local and selling business owners something that they need terribly, that they want.” [24]

Central to this strategy is UpCurve, New Media’s enterprise services division. UpCurve provides business-to-business assistance in the areas of human resources, technology and software, marketing, and sales productivity. [25] This division produced $95.8 million in revenue for 2018, an increase of 34.4 percent over 2017. [26]

Similarly, GateHouse Live is an event production company targeted to the communities and businesses served by New Media’s print publications. [27] This division posted revenue of $45.7 million in 2018, an increase of 58 percent over 2017. [28]

Beginning with its launch as a public company in February 2014, through at least 2018, New Media averaged roughly $300 million in acquisitions per year. [29] Some noteworthy pickups of daily newspapers during this period include the Columbus Dispatch, the Austin American-Statesman, and The Oklahoman.

The New Media Center for News and Design in Austin, Texas, is the company’s centralized hub that provides copy-editing, print page design, web development, editorial cartoons and other production infrastructure for many of the hundreds of publications under GateHouse management. [30] This has led to a reduction in some jobs at local print publications acquired by New Media, a development that New Media CEO Reed argues has improved the local products and made the overall business more financially competitive: [31]

“The design center allows us to take some of the work out of the local market that doesn’t have to be done by the local market. It allows us to have a more educated, more highly paid person doing that work, sitting in Austin and spreading that across a few markets. None of those markets could afford that person on their own, because of revenue trends. We can actually improve the editing and design of the paper, and therefore the quality of the output can be better [from] Austin than it can be locally.”

Reed also argues the economies of scale of running many publications allows content sharing across the news providers, improved local content and other efficiencies the papers could not provide when they were independent organizations: [32]

“Scale matters, and the more that we have, the better the opportunity becomes for us to execute on our operational strategy — which, in turn, makes all of these individual newspapers better and stronger and able to do more local journalism and investigative journalism.”

GateHouse operates a National Data & Investigations Team to provide some of this content sharing. As of April 2019, it listed seven current staffers and an open hiring solicitation to fill slots for regional editors, investigative reporters, data researchers, videographers, and copy editors. [33] [34]

Editorial Positioning

As of 2019 the GateHouse daily newspapers appeared to have a conventional range of editorial opinions, skewing both to the center-right and center-left, depending on the publication.

Bill Thompson is the editorial page editor of The Ledger, a mid-sized GateHouse daily newspaper publishing in and around Lakeland, Florida. On April 13, 2019, the paper posted his column criticizing the “elite media” for turning journalism into “liberal activism” with what he alleged was biased coverage regarding the investigations into the interventions into the 2016 election process by Russian military intelligence and other stories involving accusations against right-of-center figures. “Gone, perhaps forever,” he wrote, “is the elite media’s reputation for being objective truth-tellers, traded for the justifiable perception of being partisan political hacks.” [35]

Similarly, on April 4, 2019, The Ledger’s editorial board criticized Democrats in the Florida Legislature for introducing bills to impede firearms possession, arguing that “despite the good intentions that supposedly accompany such legislation, denying the right of self-defense via guns is ill-advised.” [36]

Conversely, during the same early months of 2019 the editorial page of the Topeka Capital-Journal in Kansas was promoting a left-of-center agenda. In March the editorial board denounced “ultra-conservative” state lawmakers for proposing vouchers to rescue students being bullied in private schools, while praising the recently-elected Democratic governor and “fellow moderates” for their education agenda. [37] During Februrary the editors criticized former Republican Gov. Sam Brownback and his “fellow ultraconservatives” for cutting the state income taxes in 2012. [38]

In July 2018, Liz Beavers, the managing editor of the Mineral Daily News-Tribune in Keyser, West Virginia, posted a response to a reader who had complained that the GateHouse newspaper’s editorial cartoons had been slanted against President Trump and Republicans. Beavers both agreed the cartoon bias had occurred and recounted her discussions with the GateHouse Media staffer responsible for shared content such as the cartoons. “To my surprise,” Beavers wrote, “he [the GateHouse staffer] also agreed that the material they provide has definitely been slanted. And he assured me they are now looking into a more conservative cartoonist to add to the mix.” [39]

Controversies

Staff Reductions

Since its emergence from bankruptcy in 2013 and resulting reorganization under New Media Investment Group, GateHouse has been criticized for reducing staff at the publications it purchases.

The NewsGuild, a Communications Workers of America affiliate representing staffers at 16 GateHouse newspapers, used a 2017 New Media shareholder meeting to try and block New Media’s policy of economizing overhead by centralizing design, information technology, and copy-editing work. A news release from the union alleged that New Media had “demoralized its workforce” and “weakened the ability of local papers to produce quality news.” [40]

Similarly, the first sentence of a 2018 Texas Monthly report regarding the purchase of the Austin American-Statesman referred to New Media as “the publishing company that is developing a bad reputation for buying newspapers and gutting their operations.” [41]

Directly addressing these criticisms in 2018, New Media CEO Michael Reed countered that consolidating non-reporting work in a central location allows reporters who remain to “focus on generating content.” But he said reporters inherited by New Media are held to a standard: “We’re going to do great local journalism here, and you’re going be a part of that, but you got to write four stories a week. You can’t write one every two weeks.” [42]

Reed noted that when that standard is not met, staff reductions are necessary to improve the news product: [43]

“If I acquire Columbus, Ohio, and I have three guys in there that have been in the newsroom for 30 or 40 years and each of them shows up a couple times a week and they produce a story every two or three weeks… That’s we found that in Columbus. [sic] So, what we said is, “Okay. We should take those three jobs, make it one job, and have that person do four stories a week.” We can have a really good reporter do four stories a week, so over the course of three weeks, you get 12 stories, where before, I had three guys coming in, doing one story every two or three weeks.”

Sale of Las Vegas Review-Journal

In 2015 New Media sold Nevada’s largest daily newspaper – the Las Vegas Review-Journal – to a then-little-known firm in Delaware whose primary backer was later revealed to be Las Vegas billionaire and right-of-center mega-donor Sheldon Adelson. When Adelson’s role in the purchase was revealed, the newspaper’s editorial board published an opinion piece alleging the secrecy surrounding the sale damaged the newspaper’s “ability to demand transparency from others.” New Media had owned the Review-Journal for less than a year and estimated the quick turnaround and sale to Adelson would reap a 69 percent annualized profit. [44]

References

  1. “Home.” GateHouse Media. Accessed April 15, 2019. http://www.GateHousemedia.com/ ^
  2. “About Us.” GateHouse Media. Accessed April 15, 2019. ^
  3. “About Us.” New Media Investment Group. Accessed April 15, 2019. http://www.newmediainv.com/about-us/ ^
  4. “Our Markets.” GateHouse Media. Accessed April 15, 2019. http://www.GateHousemedia.com/our-markets/ ^
  5. Seiffert, Don. “GateHouse Media’s second-in-command departs as COO role is eliminated.” Boston Business Journal. March 20, 2019. Accessed April 15, 2019. https://www.bizjournals.com/boston/news/2019/03/20/GateHouse-media-s-second-in-command-departs-as-coo.html ^
  6. Bomey, Nathan. “GateHouse Media Owner to Acquire USA TODAY Owner Gannett.” USA Today. Gannett Satellite Information Network, August 6, 2019. https://www.usatoday.com/story/money/2019/08/05/gannett-gatehouse-media-new-media-investment-group/1902550001/. ^
  7. Doctor, Ken. “Newsonomics: GateHouse Media thinks services for small local businesses can help replace long-gone advertising.” NiemanLab. June 20, 2018. Accessed April 16, 2019. https://www.niemanlab.org/2018/06/newsonomics-GateHouse-media-thinks-services-for-small-local-businesses-can-help-replace-long-gone-advertising ^
  8. Thompson, Bill. “Russiagate the latest in elite media’s attempts to turn journalism into liberal activism.” The Ledger. April 13, 2019. Accessed April 16, 2019. https://www.thedestinlog.com/news/20190413/thompson-russiagate-latest-in-elite-medias-attempts-to-turn-journalism-into-liberal-activism ^
  9. “Senate leader leading Kansas down wrong path.” Topeka Capital-Journal. February 12, 2019. Accessed April 16, 2019. https://www.cjonline.com/opinion/20190212/editorial-senate-leader-leading-kansas-down-wrong-path ^
  10. “Individual Contributions: Wesley Edens: 2015-2016.” Federal Election Commission. Accessed April 15, 2019. https://www.fec.gov/data/receipts/individual-contributions/?two_year_transaction_period=2016&min_date=01%2F01%2F2015&max_date=12%2F31%2F2016&contributor_name=Wesley+Edens ^
  11. “Board of Directors.” New Media Investment Group. Accessed April 15, 2019. http://www.newmediainv.com/about-us/#board ^
  12. “Home.” GateHouse Media. Accessed April 15, 2019. http://www.GateHousemedia.com/ ^
  13. “About Us.” GateHouse Media. Accessed April 15, 2019. ^
  14. “About Us.” GateHouse Media. Accessed April 15, 2019. ^
  15. “Our Markets.” GateHouse Media. Accessed April 15, 2019. http://www.GateHousemedia.com/our-markets/ ^
  16. “About Us.” New Media Investment Group. Accessed April 15, 2019. http://www.newmediainv.com/about-us/ ^
  17. Beaudette, Marie. “GateHouse Files for Chapter 11 Bankruptcy Protection.” Wall Street Journal. September 27, 2013. Accessed April 15, 2019. https://www.wsj.com/articles/GateHouse-files-for-chapter-11-bankruptcy-protection-1380304281 ^
  18. “Board of Directors.” New Media Investment Group. Accessed April 15, 2019. http://www.newmediainv.com/about-us/#board ^
  19. “Individual Contributions: Wesley Edens: 2015-2016.” Federal Election Commission. Accessed April 15, 2019. https://www.fec.gov/data/receipts/individual-contributions/?two_year_transaction_period=2016&min_date=01%2F01%2F2015&max_date=12%2F31%2F2016&contributor_name=Wesley+Edens ^
  20. “Executive Management.” New Media Investment Group. Accessed April 15, 2019. http://www.newmediainv.com/about-us/ ^
  21. “Executive Leadership.” GateHouse Media. Accessed April 15, 2019. http://www.GateHousemedia.com/about-us/executive-leadership/ ^
  22. Seiffert, Don. “GateHouse Media’s second-in-command departs as COO role is eliminated.” Boston Business Journal. March 20, 2019. Accessed April 15, 2019. https://www.bizjournals.com/boston/news/2019/03/20/GateHouse-media-s-second-in-command-departs-as-coo.html ^
  23. Doctor, Ken. “Newsonomics: GateHouse Media thinks services for small local businesses can help replace long-gone advertising.” NiemanLab. June 20, 2018. Accessed April 16, 2019. https://www.niemanlab.org/2018/06/newsonomics-GateHouse-media-thinks-services-for-small-local-businesses-can-help-replace-long-gone-advertising ^
  24. Doctor, Ken. “Newsonomics: GateHouse Media thinks services for small local businesses can help replace long-gone advertising.” NiemanLab. June 20, 2018. Accessed April 16, 2019. https://www.niemanlab.org/2018/06/newsonomics-GateHouse-media-thinks-services-for-small-local-businesses-can-help-replace-long-gone-advertising ^
  25. “About Us.” UpCurve. Accessed April 16, 2019. https://upcurve.com/about-us/ ^
  26. “New Media Announces Solid Fourth Quarter & Full Year 2018 Results, Dividend of $0.38 per Common Share.” New Media Investment Group. February 27, 2019. Accessed April 16, 2019. http://ir.newmediainv.com/Cache/1500117714.PDF?O=PDF&T=&Y=&D=&FID=1500117714&iid=4426551 ^
  27. “GateHouse Live.” New Media Investment Group. Accessed April 16, 2019. http://www.newmediainv.com/commercial-services/#1458536315895-5cd1dbef-c03f ^
  28. “New Media Announces Solid Fourth Quarter & Full Year 2018 Results, Dividend of $0.38 per Common Share.” New Media Investment Group. February 27, 2019. Accessed April 16, 2019. http://ir.newmediainv.com/Cache/1500117714.PDF?O=PDF&T=&Y=&D=&FID=1500117714&iid=4426551 ^
  29. Doctor, Ken. “Newsonomics: GateHouse’s Mike Reed talks about rolling up America’s news industry.” NiemanLab. June 20, 2018. Accessed April 16, 2019. https://www.niemanlab.org/2018/06/newsonomics-GateHouses-mike-reed-talks-about-rolling-up-americas-news-industry/ ^
  30. “Center for News and Design.” New Media Investment Group. Accessed April 16, 2019. http://www.newmediainv.com/commercial-services/#1458535912312-d3e83724-f7bf ^
  31. Doctor, Ken. “Newsonomics: GateHouse’s Mike Reed talks about rolling up America’s news industry.” NiemanLab. June 20, 2018. Accessed April 16, 2019. https://www.niemanlab.org/2018/06/newsonomics-GateHouses-mike-reed-talks-about-rolling-up-americas-news-industry/ ^
  32. Doctor, Ken. “Newsonomics: GateHouse’s Mike Reed talks about rolling up America’s news industry.” NiemanLab. June 20, 2018. Accessed April 16, 2019. https://www.niemanlab.org/2018/06/newsonomics-GateHouses-mike-reed-talks-about-rolling-up-americas-news-industry/ ^
  33. “Hiring.” GateHouse News. Accessed April 16, 2019. http://GateHousenews.com/hiring/ ^
  34. “Meet the Team.” GateHouse News. Accessed April 16, 2019. http://GateHousenews.com/meet-the-team/ ^
  35. Thompson, Bill. “Russiagate the latest in elite media’s attempts to turn journalism into liberal activism.” The Ledger. April 13, 2019. Accessed April 16, 2019. https://www.thedestinlog.com/news/20190413/thompson-russiagate-latest-in-elite-medias-attempts-to-turn-journalism-into-liberal-activism ^
  36. “Gun bills overlook that guns are sometimes needed.” The Ledger. April 4, 2019. Accessed April 16, 2019. https://www.theledger.com/opinion/20190404/editorial-gun-bills-overlook-that-guns-are-sometimes-needed ^
  37. “House education bill going wrong way.” Topeka Capital-Journal. March 18, 2019. Accessed April 16, 2019. https://www.cjonline.com/opinion/20190318/editorial-house-education-bill-going-wrong-way ^
  38. “Senate leader leading Kansas down wrong path.” Topeka Capital-Journal. February 12, 2019. Accessed April 16, 2019. https://www.cjonline.com/opinion/20190212/editorial-senate-leader-leading-kansas-down-wrong-path ^
  39. Beavers, Liz. “FROM THE EDITOR’S DESK: Yes, there has been a slant!” Mineral Daily News-Tribune. July 24, 2018. Accessed April 16, 2019. https://www.newstribune.info/news/20180724/from-editors-desk-yes-there-has-been-slant?template=ampart ^
  40. “Workers at GateHouse Publications Win Stunning Victory at Shareholders Meeting.” The NewsGuild – Communications Workers of America. June 1, 2017. Accessed April 16, 2019. http://newsguild.org/mediaguild3/workers-at-gatehouse-publications-win-stunning-victory-at-shareholders-meeting/ ^
  41. Ratcliffe, R.G. “New Media Buys the ‘Austin American-Statesman.’” Texas Monthly. March 6, 2018. Accessed April 16, 2019. https://www.texasmonthly.com/news/new-mediagatehouse-buys-the-statesman/ ^
  42. Doctor, Ken. “Newsonomics: GateHouse’s Mike Reed talks about rolling up America’s news industry.” NiemanLab. June 20, 2018. Accessed April 16, 2019. https://www.niemanlab.org/2018/06/newsonomics-GateHouses-mike-reed-talks-about-rolling-up-americas-news-industry/ ^
  43. Doctor, Ken. “Newsonomics: GateHouse’s Mike Reed talks about rolling up America’s news industry.” NiemanLab. June 20, 2018. Accessed April 16, 2019. https://www.niemanlab.org/2018/06/newsonomics-GateHouses-mike-reed-talks-about-rolling-up-americas-news-industry/ ^
  44. Hagey, Keach; and Gregory Zuckerman. “Sheldon Adelson Behind Purchase of LVRJ.” Wall Street Journal. December 16, 2015. Accessed April 16, 2019. https://www.wsj.com/articles/sheldon-adelson-behind-purchase-of-lvrj-1450319641 ^
  45. Seiffert, Don. “GateHouse Media’s second-in-command departs as COO role is eliminated.” Boston Business Journal. March 20, 2019. Accessed April 15, 2019. https://www.bizjournals.com/boston/news/2019/03/20/GateHouse-media-s-second-in-command-departs-as-coo.html  ^
  46. Seiffert, Don. “GateHouse Media’s second-in-command departs as COO role is eliminated.” Boston Business Journal. March 20, 2019. Accessed April 15, 2019. https://www.bizjournals.com/boston/news/2019/03/20/GateHouse-media-s-second-in-command-departs-as-coo.html  ^
  See an error? Let us know!