Reminding GateHouse Media that good journalism is good business

Veteran State Journal-Register Dean Olsen reporter joined the United Media Guild contingent that ventured to New York City to attend the New Media Investment Group shareholders meeting.

New Media is the parent company of GateHouse Media, which operates the State Journal-Register and several other Illinois newspapers. Olsen, the UMG’s Springfield unit chair, passed our concerns directly to GateHouse CEO Kirk Davis.

The State Journal-Register is a profitable operation. Yet the company has continued cutting costs to maximize cash flow, which is used to pay dividends to shareholders, fund more acquisitions and reward top executives handsomely.

This is good for New Media/GateHouse in the near term, but the failure to reinvest in the company’s core product — quality local and regional content — will hurt in the long-term.

Cost-cutting at the State Journal-Register has caused the news-gathering operation to erode. Readers and advertisers have noticed this decline. Many have pledged their support of our campaign to Save the SJ-R by gaining a fair collective bargaining agreement that respects and rewards good journalism.

Here is Dean’s account of the shareholders meeting.

Here is the account from Shannon Duffy, business representative for UMG.

Here is the flyer we distributed at the meeting.

About those GateHouse efficiencies

The Boston Globe took a good look at the GateHouse growth. Top executives Michael Reed and Kirk Davis have done quite well for themselves.

Here is an excerpt about what this means to newspapers and the communities impacted:

“Reed and Davis set an ambitious goal: $1 billion of deals over three years. They’re paying for these deals with new debt, the sale of New Media stock, and operating cash flow. Reed has told analysts there’s at least $75 million available in debt to do more deals and at least $70 million in cash from his papers for acquisitions this year.

“Many journalists would rather see that money go back to their strapped newsrooms.

“Jeff Gordon, president of the United Media Guild in St. Louis, said labor actions are underway in Massachusetts, Rhode Island, and Illinois to protest working conditions at GateHouse papers. The union plans to launch a radio ad campaign in Springfield, Ill., this month.

” ‘They could have a long-term prosperity in these markets,” Gordon said. “But they could also be short-sighted and be so wrapped up in cash flow that they undermine the foundation of their business.’

“Then there’s the question of whether the GateHouse team is growing too quickly, again. Davis and Reed answer that by saying they’re being disciplined — buying profitable papers with beaten-down values — and they’re keeping the debt under control.

“There are other differences, with a digital marketing arm in Quincy now and a centralized page design desk in Austin, Texas. In less than a year since the design center opened in the spring of 2014, the company has built the workforce to 140 people, cranking out pages there.

“This growth, of course, has come at the expense of jobs across the country. The Providence Journal lost about a dozen copy editors last month, for example, and Jim Romenesko’s media blog this month reported layoffs at several Halifax Media papers acquired by New Media.

” ‘They are finding that even in 2015, there can be lots of efficiencies in these enterprises, which is somewhat surprising given that we’ve had cutting for seven or eight years now,” said Ken Doctor, a media analyst who runs the Newsonomics blog.
But some say it’s not just jobs that are being lost.

” ‘You get this homogenization effect,” said Thomas Caywood, a reporter who left the T&G post-acquisition after his request for a modest pay raise was denied. “Yes, it’s more efficient to have this design center in Austin. But I think you lose some of the regional individuality. GateHouse is to journalism like what Olive Garden is to Italian food.’


State Journal-Register organizes with Guild, fights for first contract

The State Journal-Register has suffered massive staffing cuts under the ownership of GateHouse Media. Copy editing jobs were sent out of state. Although the SJ-R has remained highly profitable, many surviving reporters, editors and photographers have gone more than seven years without a raise.

The parent company is siphoning off profits to pay dividends to shareholders and purchase other properties. By refusing to reinvest in the SJ-R, GateHouse has  triggered constant staff turnover, diminished the news gathering operation and left the state capital with a much lesser newspaper.

Reporters, editors and photographers at the State Journal-Register organized in 2012 with the United Media Guild, a local within the The News Guild-Communications Workers of America. We are negotiating a first contract that will encourage staff retention and ensure the first-rate journalism Springfield deserves.

Please join our efforts to convince GateHouse Media that Springfield deserves a great newspaper. Help us save the SJ-R.

Springfield has rallied to support our quest for a great newspaper.
Springfield has rallied to support our quest for a great newspaper.