New Media to Buy USA Today-Owner Gannett in $1.4B Deal

Press & Sun-Bulletin Owner Acquired in

The nation's two largest newspaper companies are seeking to join forces.

New Media Investment Group said it will buy USA Today-owner Gannett Co.in a US$1.4 billion deal, creating the biggest newspaper owner in the United States, Reuters reports. The combined company would have more than 260 daily papers in the US along with more than 300 weeklies. New Media and Gannett are the largest USA newspaper owners by circulation, according to Statista.

GateHouse and Gannett share a steadfast commitment to journalism with impact.

Jeff Jarvis, a professor at the City University of NY journalism school, said the new company needs a better vision more than cost savings.

The merger will result in an estimated annual savings of approximately $275 to $300 million, the companies said in a press release.

Newspaper consolidation has picked up as local papers find it hard to grow digital businesses and replace declines in print ads and circulation. Whatever the ownership structure of newspapers, so many of them have closed in recent years that there are at least 1,800 fewer newspapers in America than there were in 2004, according to a study by the University of North Carolina.

According to a study by the University of North Carolina cited by the Associated Press, the USA has lost nearly 1,800 local newspapers since 2004 and newsroom employment fell by a quarter from 2008 to 2018, according to Pew Research. GateHouse is known for a near-constant acquisition of papers; it bought the Akron Beacon Journal in May and sold its Alaska holdings to the Beacon Journal's owner.

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In a press release, New Media Investment Group CEO Michael Reed said combining will allow the companies to "accelerate our shift from print-centric to dynamic multimedia operations" and expand "comprehensive, hyperlocal coverage for consumers".

But it's no panacea.

The GateHouse-Gannett combination "will exert a profound impact on the news industry itself, hundreds of communities, millions of readers, and on the very future of the craft of journalism", Doctor writes. That will have to be paid back. Media executive Paul Bascobert has been named chief executive of the combined company.

Under terms of the agreement, the fee deal will sunset in two years. The companies expect it to close this year. The company also has a reputation for consolidating operations where possible, which often leads to staff cuts. Fortress, in turn, is owned by Japanese tech giant SoftBank.

While New Media reported revenue of US$404 million in its second quarter on Monday, Gannett had revenue of US$660 million.

GateHouse's Florida newspapers include The Daytona Beach News-Journal, Panama City News Herald and others. It publishes 156 daily newspapers, most in small- and mid-sized towns.

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