Another Cold, Hard Look at the Pillaging of Newspapers

A lot of us have lived this story. This excerpt is what it was like for me, though I was lucky to avoid GateHouse.

Zenger’s newspaper, with a circulation of under 10,000, has been pillaged in classic private equity fashion. Its pre-GateHouse staff has been cut by 70 percent, and those who remain have not had a raise in almost ten years. The paper had its own in-house production and printing operation, and had won design awards, but GateHouse shut down and sold the press and fired the entire production staff. The paper is now laid out hundreds of miles away in Austin, Texas, along with most of GateHouse’s 770 papers. The printing is done in another city, at a GateHouse-owned shop, by harried press workers who are under constant pressure to cut costs by reducing quality.

Editors must send all the content, page by page, to the GateHouse design center via a cumbersome, laughably outmoded software interface and then wait, often for hours, to see what the pages look like on their computer screens. They are not allowed to speak to the designers, who can be contacted only by email. The designers follow strict rules that make creative layout solutions virtually impossible. GateHouse wages are so low and working conditions so high-pressured and unpleasant that turnover among layout staff is constant—so mistakes are rampant.

Although GateHouse management claims to be aggressively pursuing a “hyperlocal” digital ad strategy, its newspapers’ websites—all with close to identical design—are stunningly ugly, hard to use, and filled with dated, soft feature stories of zero local interest. Its subscriber services—all outsourced—are even worse. At Zenger’s office, the editors get calls from readers who are having trouble with their subscriptions and can’t reach anyone for help. “Sorry,” the editors have to say. “There’s nothing we can do.”

Cost-cutting measures at GateHouse are absurdly draconian, ranging from the fact that editorial staffers don’t even get complimentary subscriptions to having to buy their own coffee for the office machine. “Next it will be the toilet paper,” says one staff member, only half-joking.

The newspaper where Zenger works, sold to GateHouse a decade ago, has lost 40 percent of its circulation over that time, and nearly half its advertisers. At the Columbia Daily Tribune in Missouri, massive layoffs began one month after GateHouse took over. “You are expected to do the work that three people used to do, and you are not rewarded for it,” says one former employee. Across the company, employees complain of few resources and little tech support. A senior sales rep at a GateHouse paper in Massachusetts had his computer hard drive crash and couldn’t get a new one from the company for nine days. When he finally did get one, it wouldn’t accept his password.

The ruthless miserliness of GateHouse management has two effects: It destroys the newspaper’s capacity to do its fundamental job of covering the news, and it makes for miserable employees. “Everybody I know in the leadership of the corporation were financial people or ad directors,” says the editor of a GateHouse-owned paper. “They were never journalists—never covered a story in their life. This corporate stuff is killing local newspapers. I’m sweating bullets hoping some bean counter doesn’t say we’ve got to get another 17 percent profit out of this. How much more can these people cut? It becomes harder to do the right thing—to cover the city council meetings and find out what really did happen—when you had five people in the newsroom and now you’re down to two.”

Saving the Free Press From Private Equity

 

As shitty as it is, the alternative is the paper shutting down completely. I can't imagine there's enough revenue to run a newspaper correctly in a place that small anymore.

 

It's a long story, so there's a lot more analysis there. But this was a good hook for the thread.

 

My paper just got bought by GateHouse

 

GateHouse owns SEVEN HUNDRED SEVENTY papers?

Sheesh. I had no idea.

 

Owning even 70 is a bad idea for journalism. Of GateHouse's 770, "only" 130 are daily papers.

Products
130 daily newspapers
475 weekly newspapers
111 “shoppers”
over 260 locally-focused websites
seven yellow page directories
– Wiki

 

If you've been at the paper longer than 10 years, take the inevitable buyout when Gatehouse offers it.

It'll be a miserly sum, but it'll be worth it. Use it to fund your job search, or if you already have a solid savings, use it to take a vacation.

 

I don't understand from a business standpoint why Gatehouse will not invest in decent software. Is software that expensive. And I would think the software would lead to higher productivity at the central hubs and lead to higher profitability.

 

Sadly that is the money quote. A 40% drop in circulation and a 50% loss in advertisers is not pretty typical of the industry. I don't have time to look it up but it is similar to the revenue drops at McClatchy over that time span. And McClatchy was at one time known for having pretty good papers because the company would spend some money on editorial.

 

There's a lot of eerie similarity between this article and my shop, though I don't work for GateHouse. It's just a dying industry and the beancounters are doing what has to be done to keep it profitable until it's gone.

In other words, Shit happens.

 

Is there ANY print business that's thriving like it used to? Newspapers, magazines, shoppers, phone books, paper back novels?

 

From what I understand, to properly license stuff costs some $$ -- but if you're trying to bleed these papers dry and don't care if they survive, you aren't going to want to spend that money.

GateHouse was looking at a local marketing arm it has and for a while hoping that would make some cash. Propel, I think it's called.

I worked at a GateHouse paper about 10 years ago. It'd just been bought from Gannett and they actually added spots (including mine) for a couple months. Two months in, I get a call from the top guy on an off day. "Your job is going away." No warning whatsoever. Bunch of other people gone, too. For four days I was in limbo. Finally they find a spot for me. It was not a pleasant experience, but that "new" gig is why I have the job I have now. One of the few good things I have to say about the place.