Other GateHouse newsrooms follow the SJ-R’s lead and join the Guild

Journalists at the State Journal-Register started something when the stood up to the asset-stripping managers at GateHouse Media and voted to join The NewsGuild.

Their colleagues at the Rockford Register Star followed that lead and also voted in the Guild. They joined the Guild-represented Peoria Journal Star and Pekin Daily Times in the battle against GateHouse.

Recently newsroom employees at the Lakeland Ledger voted to join the Guild, their GateHouse colleagues at the Sarasota Herald-Tribune voted to do the same.

Unionization is unheard at Florida newspapers, so these votes underscore the severity of journalists’ concerns with GateHouse management.

Of course, the company is not happy about this. The organizing drive in Sarasota met with particularly heavy resistance from Herald-Tribune executive editor Bill Church.

In fact, management’s attempts to intimidate our activists there led to an Unfair Labor Practice charge against the company and strengthened the resolve of the journalists seeking representation.

Church subsequently got promoted to Senior Vice President for News at GateHouse Media. He will move to Austin to oversee the company’s Center for News & Design.

GateHouse CEO Kirk Davis trumpeted Church’s ascension as proof that the company cares about journalism.

“It is essential for GateHouse to have a corporate advocate for its news employees, enterprise-wide, who appreciates the diversity of our markets, who can engage our news leaders in the ‘conversation’ about how we evolve our news organization, and who possesses the ability to communicate effectively and consistently about our journey,” Davis said in a GateHouse memo.

Church’s promotion further cleansed the company of its ugly Las Vegas stain, which involved one of the most egregious lapses in journalism ethics in memory.

Journalists across the company hope Church’s ascension will create more opportunity to do vital enterprise reporting. They hope this move is more than just a PR gesture.

But if the GateHouse reality remains the same — eternal pay freezes, staffing cuts, journalists hiring on for less than a living wage — then news-gathering operations will continue eroding and communities will keep suffering.

And more newsrooms will follow the SJ-R lead and join the Guild. As industry analysts Rick Edmonds told the Columbia Journalism Review, “I don’t know if this is two in a series of two or two in a series of 12. But it’s not a good thing for your business if your journalists are saying, ‘We can’t really serve our community.’”

Attention Mike Reed: The battle escalates

Earlier this month United Media Guild business representative Shannon Duffy sent this letter to Mike Reed, the CEO of New Media Investment Group — the parent company of GateHouse Media and its four newspapers that we represent in Illinois:

Dear Mike,

Thanks for taking the time to meet with Phil Luciano and me at the New Media Investment Group shareholders meeting on May 25.

As we told you in New York City, we are concerned about the future viability of the Peoria Journal Star, State Journal-Register, Rockford Register Star and the Pekin Daily Times in the face of eternal wage freezes and newsroom cuts. Excessive cost-cutting is taking a heavy toll in the workplaces where the United Media Guild represents journalists.

That is taking a toll on the news product which, in turn, will cause premature loss of readers and advertisers.  This is troubling to our members who love their craft, their newspaper and their communities.

Recently the State Journal-Register imposed its “last, best and final” offer on our members at that newspaper, which will extend the current wage freeze to nearly 12 years. That seems an absurd working condition, particularly at a newspaper that has helped fund New Media Investment Group purchases and dividend payments with its positive cash flow.

Your employees have never been more important. Newsrooms must innovate and evolve on the fly to compete in a rapidly changing landscape. The business side must do the same in the face of staggering print revenue decline.

Rather than belabor the fairness issue, I’d like to caution you that maintaining an eternal wage freeze at New Media/GateHouse newspapers could cost the company far more in the long run than a relatively modest re-investment in its employees.

Here are some of the inevitable consequences:

  • Declining morale and productivity – and at a time when employee productivity has never been more important.
  • Accelerated churning of salespersons, journalists, editors, publishers and New Media/GateHouse executives.
  • Increased levels of union activism in various workplaces and communities.
  • Economic actions against individual newspapers, targeting subscribers and advertisers.
  • A national corporate campaign against New Media/GateHouse management targeting analysts and shareholders.

Last year, after you expressed your concerns during our phone conversation, we toned down our rhetoric and tried to reach a fair settlement in Springfield without intensifying our public campaign there. But that effort failed, conditions have now been imposed on our members and so here we are, ready to fight on their behalf through all lawful means.

We believe there is real economic value in labor peace. Now, unfortunately, it appears it will be our job to establish the economic cost of a labor dispute.


Since then, we have seen another example of what happens when a company takes its cost-cutting too far: The Lakeland Ledger will soon vote on whether to unionize. We are asking all of our members to support and others that could arise in the face of GateHouse’s draconian actions.

Why we must save the SJ-R

A great news-gathering operation is immersed in its community, providing a public service by chronicling key events and exploring critical issues. But layoffs have cut the State Journal-Register staff to a fraction of its former size. The company’s 8 1/2-year pay freeze has prompted quality journalists to move on to other jobs. The scope and depth of the newspaper’s coverage has suffered. Springfield deserves better from the SJ-R’s New York-based owner.


New Media Investment Group is the parent company of GateHouse Media, which operates the State Journal-Register and hundreds of other newspapers. Fortress Investment Group launched New Media, along with other private equity vehicles in businesses like sub-prime lending and golf course management. Fortress collects hefty management fees for overseeing them. According to the New York Times in a recent article, “Last year, Fortress received more than $200 million in revenue from these companies, about a 50 percent jump from the year before.”


Fortress entered the newspaper industry in 2005 by buying the Liberty Publishing Group. Re-branded as GateHouse Media, the company went on a spending/slashing spree. It bought newspaper after newspaper, cutting staff each time. Gatehouse landed the SJ-R in 2007 and began chopping reporters, editors and photographers. Over time the printing operation moved to Peoria, allowing the company to sell off the Springfield presses. The design desk eventually ended up in Austin, Texas. Despite the profitability of its pared-down properties, GateHouse fell into prepackaged bankruptcy in 2013 due to its excessive acquisitions debt.


Fortress doubled down on its newspaper bet, re-launching GateHouse as part of the larger New Media Investment Group. The new company emerged from bankruptcy, went public and vowed to spend up to $1 billion in new acquisitions. Yet the newsroom cuts and the wage freeze continued at the SJ-R. The company siphoned off profits to underwrite acquisitions and to pay hefty stock dividends — totaling $224.6 million after three years. It bought more newspapers, cut more jobs, added more cash flow, paid more dividends, bought more newspapers and so forth. The bigger the company gets, the more management fees Fortress collects. And if the company collapses again, Fortress will come out fine. It has already collected $45 million in management fees and incentive compensation on this gambit.


Newsroom employees voted 26-4 to join the United Media Guild and gain a collective voice in the operation. They love their craft and their community. They want keep experienced journalists in this newsroom, doing good work for the people of Springfield. They are fighting imposed conditions that would extend their wage freeze to nearly 12 years. They are fighting the employee churn that extends to upper management. Since unionizing, our members have worked for four different SJ-R publishers. Top GateHouse news executives Brad Dennison and David Arkin have moved on as well. They cared about journalism. But New Media isn’t about journalism, it’s all about cash flow, acquisitions, hefty management fees and big dividends (while they last) for Wall Street investors.

GateHouse extends wage freeze for SJ-R journalists

During our battle for a first contract in Springfield, Ill., GateHouse Media has absolutely, positively refused to negotiate raises.

The company took this hard line even though GateHouse emerged from bankruptcy flush with capital as part of its new parent company, New Media Investment Group.

The company took this draconian stance despite the positive cash flow generated at the State Journal-Register and the company overall.

GateHouse maintained its abusive pay freeze despite massive newsroom cuts that forced surviving journalists to shoulder greater workloads while trying to stem the eroding quality of the SJ-R.

Company negotiator Ali Zoibi even refused to offer bonuses tied to newsroom performance, though our members have done an outstanding job driving digital traffic and fulfilling other company initiatives under increasingly difficult conditions.

His “last, best and final” offer amounted to a pay cut for our members — many of whom had gone 8 1/2 years without a raise. Not surprisingly, our members voted down that offer.

So the company declared impasse and imposed conditions on our members, essentially extending its wage freeze for another three years. The imposition of these conditions could result in some members going 11 1/2 years without a raise.

That’s eleven and one-half years.

While these imposed conditions includes annual bonuses, the company is jacking up medical premiums from nearly 15 percent to 27 percent, depending on the employee’s plan. This will result in an imposed pay cut for many of our members.springfield3

Meanwhile GateHouse media is vacuuming cash out of Springfield to fund New Media Investment Group dividend payments and acquisitions. By buying more properties, the company is creating greater cash flow — and masking the damage that excessive cost-cutting has done to its existing properties. Readers and advertisers have grown weary of paying more for less.

As a result of all this, the United Media Guild has no choice but to escalate its public campaign in Springfield. It will also join other NewsGuild locals across the country in a concerted corporate campaign against the vulture capitalists at GateHouse/New Media.

The harsh truth about GateHouse and other big media companies

The consolidation of the newspaper business continues. Gannett hasn’t given up on purchasing Tribune Co. as part of its ongoing expansion.

The money guys behind New Media Investment Group/GateHouse, Fortress Investment Group, remain in “buy” mode they can maximize the management fees they collect.

Prices have dropped for newspaper properties, making them more attractive targets. Companies like Gannett and New Media/GateHouse have centralized production facilities, so they can “gain efficiencies” with properties they acquire.

That is a nice way of saying “fire a lot of people to increase profits.”

The expressed New Media/GateHouse plan is to maximize cash flow at its properties, then use the money to pay dividends and to buy more properties, cut more costs, generate more cash flow, pay more dividends, buy more properties . . . you get the idea.

Revenues are sinking for newspaper properties and will continue to sink. New digital initiatives like New Media/GateHouse’s Propel Marketing generate some new revenues, but not nearly enough to offset all the decline.

And bleeding these properties for cash flow speeds causes newspaper and websites to   deteriorate, which accelerates the loss of readers, advertisers and, of course, revenues.

CBNC commentator Kevin O’Leary noted the ongoing consolidation of newspaper companies will not solve the core problems.

“The best analogy is two smaller ice cubes melt faster than one bigger block of ice,” he said during a report on Gannett’s bid for the Tribune Co. “These are both melting.

“This is a just long end game of cutting costs, banging together all the ice you can, consolidating, slashing costs The long trend is to zero.”

He did not see the wisdom in Gannett’s bid. “This sounds like a business plan that is handed to you when you finally descend into hell and you know you have to live there in perpetuity,” O’Leary said. “Who would want this challenge? I mean, it is brutal.

“I’d like to have a moment of silence for the money that’s going to die in this project because it deserves that respect.”

What would an honest description of a consolidation plan sound like?

“Sometimes you have to say, ‘Look, it’s going to go to zero eventually. I am going to milk as much cash as I can out of it on the way by combining all the zero candidates together and put them on life support, try to make the refrigerator a little colder so the ice melts a little slower and suck out every dollar out before you turn out the lights.

“Listen, let’s tell the truth. That’s what’s going to happen.”

New publisher, same problem at SJ-R

springfield3The churn continues at the State Journal-Register. Salespersons come and go. So do reporters, frustrated by the eternal wage freeze invoked by GateHouse Media.

Notable departures include Jamie Munks, Maggie Menderski, Dan Petrella, Tobias Wall and Molly Beck.

And this company even blows through publishers. Once upon a time those positions were among the most stable in the media industry. As the Illinois Times notes, the SJ-R employed just two publishers between 1968 and 2005.

But those days are long gone. Rosanne Cheeseman became the sixth SJ-R publisher under GateHouse Media ownership, replacing Clarissa Williams.

Back in 2013 since-departed GateHouse executive Brad Dennison hired Williams to replace interim publisher Michael Petrak, who filled in after Richard Johnson retired after less than a year on the job.

Johnston signed on in 2012 to replace Walt Lafferty, who came aboard in 2010 to replace Scott Bowers. Whew!

Springfield civic leaders need a scorecard to keep up with all the changes atop the SJ-R, an important institution that has eroded due to excessive cutting under GateHouse ownership.

Cheeseman takes over as the United Media Guild moves closer to triggering advertiser and reader boycotts of the SJ-R. GateHouse Media’s last contract proposal to the UMG amounted to a pay cut for many of our members in Springfield.

Veteran journalists at the paper have gone nearly nine years without a raise. This prompted them to organize, vote in the Guild 26-4, and embark on an aggressive public campaign.

Our members have engaged the public in a variety of ways, including informational picketing, leafleting major events, speaking to civic groups, soliciting support from organized labor, manning an informational booth at the Illinois State Fair, gathering support cards and running a radio advertising campaign.

More recently UMG business representative Shannon Duffy met with several of the major SJ-R advertisers face to face, some of them on multiple occasions. AFSCME, which has 35,000 members in the region, has been assisting our efforts.

The UMG isn’t eager to inflict economic damage on the SJ-R — some of which could be permanent — but if GateHouse insists on maintaining its wage freeze, we will have no choice to prove that labor peace has major economic value.

Boycotts could cost GateHouse Media hundreds of thousands in the near term and perhaps millions in the long haul. Regaining lost readers and advertisers can be expensive and, in some cases, impossible.

And odds are we’ll see more churn, more salespersons, reporters and, yes, even publishers heading out the door.

What’s not to like about the SJ-R’s parent company

We’re hearing lots of happy talk out of New York about New Media Investment Group, the parent company of GateHouse Media and the State Journal-Register.

The company has plowed forth on a buying spree, becoming one of the few big players left in the newspaper industry. On his fourth quarter earnings call with analysts, New Media CEO Michael Reed said the company could spend up another $360 million on acquisitions this year.

Even after giving a glowing earning report and paying another healthy dividend, though, New Media stock dipped to $15.26 per share Friday — well below its 52-week high of $25.62 and about one-third of the long-term price some analysts predicted the stock should reach.

What’s up with that? Writing for Poynter.org, Rick Edmonds observed:

Some commentators have doubted whether New Media’s strategy will work as well at bigger papers it bought in Columbus and Providence as it has with earlier additions of smaller papers.

In the conference call with analysts, Reed argued that the market undervalues New Media. The newspaper sector, he said, is “out-of-favor and fragmented,” and that leads to New Media being “misunderstood.”

But is it really misunderstood? Or is the market wary of a newspaper company that buys and plunders properties, seeking maximum quarter-to-quarter cash flow while risking accelerated erosion of readership and advertising revenues? At some point, doesn’t the company have to grow the bottom line?

New Media puffed up its fourth quarter numbers with a $54 million cash infusion from flipping the Las Vegas Review-Journal to casino magnate Sheldon Adelson, who bought the newspaper to pursue a personal agenda.

That was a nice windfall for the company, but raised serious questions about its commitment to credible journalism. First it tried to get reporters at the Review-Journal to do Adelson’s bidding by investigating Las Vegas judges. Then GateHouse executive David Arkin tried to get journalists at its Sarasota newspaper to investigate the judges.

New Media has since scaled back its management agreement in Las Vegas and backed away from the mess, but not before its egregious ethical lapses drew extensive national coverage in both the industry and the mainstream media. The controversy triggered rumblings of an unhealthy rift between Reed and Kirk Davis, the New Media COO and GateHouse CEO.

It’s no wonder the company feels compelled to assemble its editors for an April meeting in Chicago for a journalism refresher course. Clearly upper management needs it.

Of course, New Media/GateHouse management is creating even greater concerns of interest. Let’s run down the list:

Core product deterioration. New Media/GateHouse has cut newsroom operations to a fraction of their former size. Even after emerging from bankruptcy flush with cash, it continued running off veteran reporters, photographers and editors and hiring entry level replacements — often at less than a living wage. The constant cutting and churning keeps diminishing the “strong and trusted local brands” the company touts to investors. Outsourcing copy editing functions to its Austin design center has further diminished content quality, since ever-changing workforce there is far removed from the communities New Media/GateHouse newspapers serve. In many cases editors have little knowledge of the people, places and issues in the stories they process. As a result, more obvious errors end up in print.

Gouging subscribers. While circulation is plummeting at many properties, the company offset that decline by raising subscription and newsstand prices and making subscribers pay extra for “premium sections” that are essentially advertorial fluff.

Employee abuse. Even while spiraling into bankruptcy in its earlier incarnation, GateHouse Media maintained reasonable relationships with its unions. After its rebirth as the cash-flush New Media Investment Group, the company has established a more strident tone toward its employees, many of whom have endured wage freezes of eight or more years. The company is steadfastly refusing to offer raises during its ongoing negotiations with various unions. At the SJ-R, for instance, the loss of just one key advertiser would cost the company far more money than settling with United Media Guild on a fair contract for its members. That market is well aware of the UMG’s years-long fight for a first contract, thanks to a radio commercial blitz, outreach to community and labor leaders, public demonstrations and direct meetings with some of the SJ-R’s biggest advertisers. But the company simply doesn’t care about public perception. It is too busy vacuuming every last nickel and dime out of cities like Springfield.

Vulture capitalism. John Levin, chairman and chief executive of Levin Capital Strategies L.P.,  called for more independent directors for the companies spun out of Newcastle Investment Corp. to reduce the obvious conflicts of interest. The external management structure of these spin-offs reward the money guys backing the enterprise, Wes Edens and the Fortress Investment Group LLC, while putting shareholders in some peril. Levin notes that Fortress gets paid to build size, not to necessarily create better performance. As Levin noted about another Fortress property, New Senior Investment Group, perhaps a buyer will come along and save the company for the long haul. The same could occur for New Media. Readers of newspapers like the SJ-R could only hope so.

GateHouse Media still demanding wage freeze at SJ-R

GateHouse Media is still refusing to offer raises to hard-working journalists at the State Journal-Register. Its last contract offer did not include pay increases, so, not surprisingly, the Springfield unit of the United Media Guild rejected it unanimously.

Negotiations are on hold while the Springfield unit of the United Media Guild gathers additional public support

Writing for the Illinois Times, here is how reporter Bruce Rushton described the contract rejection:

Newsroom employees at the State Journal-Register tonight rejected a final contract offer from GateHouse Media, the company that owns Springfield’s daily newspaper.

The vote was unanimous, according to Shannon Duffy, administrative officer for the United Media Guild, which represents newsroom workers. There are approximately 25 workers in the bargaining unit.

Reporters and other newsroom employees have gone without raises since GateHouse purchased the paper eight years ago, and pay increases had been a sticking point in contract negotiations between the company and the union. Employees voted to form a union in 2012.

Management offered $600 annual bonuses for the life of a three-year deal, Duffy said, but that was contingent on an open shop, meaning that employees would not be compelled to join the union or pay union dues. Management and the union had tentatively agreed to a number of working conditions, including rules governing transfers and promotions, leaves of absence, holidays and rules governing discharge and discipline, according to the union.

Clarissa Williams, SJ-R publisher, declined comment.

Union leadership had recommended that the bargaining unit reject management’s latest proposal, which Duffy said was a “last, best and final offer.”

“It (the offer) would not create a better workplace,” union leaders wrote in a Jan. 27 memo to union members. “It would simply codify the one you are trying to change. GateHouse has been buying up properties like it is the Golden Arches of journalism. That doesn’t mean newsroom staffers should be tied to a McDonald’s pay scale.”

The McDonald’s comparison was an obvious reference to the plight of Dean Olsen, an SJ-R reporter and union organizer who took a job at the fast-food chain to make ends meet. Olsen’s moonlighting at McDonald’s, first reported by Illinois Times, received national attention on websites and blogs devoted to journalism.

“How crazy is it that just as the $15 an hour minimum wage movement is building steam for fast food workers, GateHouse insists on a minimum rate of $13 an hour for fulltime journalists and $11 for part-timers?” union leadership wrote in the memo. “Will there be fries with that?”

Union leaders in the memo said that GateHouse was too quick to present a final offer.

“(F)or some reason, this company seems to have given up trying to work out differences on the remaining issues,” union leadership wrote. “Instead, it presented – in our view very prematurely – a final offer, insisting that it get its way on all unresolved issues.”

Although the offer presented by management was a final one, Duffy said that another negotiating session is scheduled for Feb. 11. Presuming no accord is reached, management could declare an impasse and install all or part of the conditions in the final contract offer, Duffy and Olsen said. The union could appeal a declaration of impasse to the National Labor Relations Board, asking for a ruling that no impasse exists, they said. If the NLRB rules that there is no impasse exists, negotiations would continue, they said.

“The ball truly is in their court right now,” Duffy said. “We remain committed to getting a contract.”

If an impasse is declared and the company installs provisions in its final offer that have been rejected by employees, options for the union range from going out on strike to organizing a boycott of subscribers or advertisers or both, Duffy said.

“It gets really interesting from this point forward,” he said.

SJ-R journalists continue their contract fight

Our Springfield unit is pressing on for a first contract at the State Journal-Register. After years of negotiating, the GateHouse Media is still offering what amounts to a pay cut for those of our members using company health care.

Before our last bargaining session, SJ-R newsroom employees took to the street in front of their building to express their solidarity and commitment.

GateHouse commits Unfair Labor Practices, must post NLRB ruling

When our members in the State Journal-Register newsroom joined their public supporters for informational picketing outside of the newspaper building, a member of the GateHouse management team videotaped this protest.

Such surveillance can intimate union members and discourage them from exercising their rights under the National Labor Relations Act. For that reason, such surveillance is prohibited under the act.

So the United Media Guild filed another Unfair Labor Practice charge against GateHouse Media, this time at the SJ-R. The NLRB found merit in our claim and GateHouse declined to appeal the ruling.

The company will display copies of the ruling in the workplace.


Earlier we filed two separate charges at the Rockford Register Star after the company clearly violated the National Labor Relations Act. We negotiated a favorable outcome to those charges.