Last year, Journal Communications, the state’s largest media company, “merged” (the scare quotes are there for a reason) with the E.W. Scripps Co., with Journal’s broadcast properties, including Milwaukee’s and Green Bay’s NBC stations and the mighty WTMJ radio going with Scripps, and Scripps’ print publications going into the new Journal Media Group, including the Milwaukee Journal Sentinel.
As a former Journal employee in its employee-owned days and its publicly traded days (the former was vastly preferable to the latter), I wrote that it was obvious that Wisconsin and the print side got the raw end of the deal.
As proof that however bad things may be, things can get worse, the Journal Sentinel reports a strange celebration of National Newspaper Week:
Gannett Co. Inc. said Wednesday it plans to buy Journal Media Group — the parent company of the Milwaukee Journal Sentinel — for about $280 million in cash.
The deal, which is expected to close in the first quarter of 2016 if it receives regulatory and shareholder approval, adds Wisconsin’s biggest newspaper to Gannett, which already owns newspapers in Green Bay, the Fox Valley and other important markets in the state.
“This transaction marks a critical next step in the transformation of our industry as we build local media brands that matter at a time when operational scale is a competitive advantage,” Tim Stautberg, president and chief executive officer of Journal Media Group, said in a statement. “Both Journal Media Group and Gannett are guided by a vision of strengthening lives and communities, and we’ll be better stewards in our local markets by sharing ideas, content and best practices among our new and larger family.”
The agreement is part of an era of further consolidation in the U.S. newspaper industry, as newly pure-play newspaper companies take steps to meet the competitive threat of scaled digital news and advertising businesses, the companies said in a statement.
When the deal is completed, Gannett, the parent company of USA Today, The Arizona Republic and The Indianapolis Star, will be in 106 U.S. markets and have a digital audience of more than 100 million unique visitors each month.
In addition to the Journal Sentinel, Journal Media Group owns papers in more than a dozen other markets, including in Memphis and Knoxville, Tenn., where Gannett owns the Nashville newspaper, and in Naples and Treasure Coast in Florida, where Gannett owns the Fort Myers paper.
In a letter to employees, Stautberg said it is too early to determine the potential impact of the transaction on jobs or day-to-day operations in Journal Media Group markets.
The companies estimated in a joint news release that the deal will yield an estimated $10 million in immediate savings and the potential for $25 million more over the next two years. That is anticipated through the consolidation of a variety of functions, including corporate operations, printing and distribution, the companies said.
The transaction has been approved by the boards of directors of both Gannett and Journal Media Group. Under the terms, Journal Media Group shareholders will receive cash of $12 per share, representing a premium of 44.6% over the $8.30 closing price of Journal Media Group stock Wednesday.
“The publications of both Gannett and Journal Media Group have a rich history, a commitment to journalism and a dedication to informing and being active members of the communities we serve,” Bob Dickey, president and chief executive officer of Gannett, said in a statement.
Dickey continued: “Our merger will combine the best of each of our organizations to create a journalism-led, investor-focused company which will provide substantial value to the shareholders of both companies. This transaction is an excellent first step in the industry consolidation strategy we have communicated to our shareholders.” …
Both companies underwent major transitions in the past year. Journal Media Group was created in April after The E.W. Scripps Company and Journal Communications merged their local television operations and spun off their respective newspaper assets into an independent, publicly-traded company based in Milwaukee.
Gannett, based in McLean, Va., returned to its own roots as a newspaper company on June 29, when it completed its own split, creating separate companies focused on local newspapers and local television. Its local television and national digital operations, including Cars.com, are now part of Tegna, also based in McLean.
Although the acquisition will cost Milwaukee a corporate headquarters, Journal Sentinel Publisher Elizabeth Brenner said the newspaper will remain local in its approach.
“Look back on when Journal Media Group started. All of the news decisions, the editorial decisions, the community support — everything we do isn’t going to change,” Brenner said. “We’re still here. We make our decisions and run our newsrooms out of Milwaukee, not anywhere else. We serve our advertisers and subscribers out of Milwaukee, not anywhere else. And we support causes that are important to our community from this building. So all of that, it’s not going to change. It didn’t change when Journal Media Group started up. It’s not going to change now.”
That line “Everything we do isn’t going to change” reads like whistling in the dark, and a statement Brenner (who wrote me a nice email after my enforced departure from Journal) really can’t make with credibility this far away from the closing. (As for “strengthening lives and communities,” whatever happened to reporting the news without fear or favor?) Gannett owns the daily newspapers of Green Bay, Appleton, Oshkosh, Fond du Lac, Sheboygan, Manitowoc, Wausau, Stevens Point, Wisconsin Rapids and Marshfield now. And now Gannett will run the biggest newspaper in the state.
The issue is not that Gannett is the biggest media company in the U.S. The issue is the mediocrity, or worse, of Gannett’s Wisconsin newspapers, to which the Journal Sentinel most likely will be dragged down. That is, unless you think printing pages of the previous day’s USA Today (those would be the USA Yesterday pages, I guess) strikes you as superior journalism. Most Gannett newspapers aren’t like USA Today, or the Arizona Daily Republic, or the Des Moines Register, or the Indianapolis Star. Most are at best like The Post~Crescent in Appleton, which has a decades-long history of typographical errors, wrongheaded editorial stances, poor editorial decisions, and previous employment of a sportswriter who loudly proclaimed the Packers would never win the Super Bowl the year the Packers won the Super Bowl.
There used to be a debate, back before The Post~Crescent was acquired by Gannett (it previously was owned by Thomson Newspapers, which makes Gannett look like the Wall Street Journal in comparison), as to whether The Post~Crescent was a worse newspaper (the opinion of Fox Cities residents) or the Green Bay Press-Gazette was worse (the opinion of Green Bay residents).
But don’t believe my dire observations of Gannett. Ask a reader of the Oshkosh Northwestern, Fond du Lac Reporter, Manitowoc Herald Times Reporter or Sheboygan Press. They are run by one editor who is apparently under orders to not employ enough news or sports reporters to actually cover local news and sports. I’m all for eliminating the suits, but you need actual bodies to cover the news, and more bodies than Gannett is willing to employ.
This is not limited to Gannett. Earlier this year the Wisconsin State Journal in Madison, the newspaper I grew up reading, laid off three reporters people purchased the newspaper to read. (The State Journal resolutely refused to hire me, which I’m told by a departed State Journal-ist — get it? — was good for me.) The State Journal’s cuts appear to be less about the State Journal’s finances (if you can’t make money in the Madison media, you really need to find a new line of business) and more about the finances of its owner, Lee Enterprises, which has been in financial trouble for years due to overexpansion. (Lee really needs to sell the State Journal, and not to Gannett.)
Meanwhile, the Dubuque Telegraph Herald began printing its newspaper in Cedar Rapids, Iowa, last week. Cedar Rapids is not a suburb of Dubuque (nor is Waterloo, whose Courier is also printed at the Gazette), so I have been told that the deadline for stories inside the Telegraph Herald is now 2 p.m., and the deadline for front page and sports stories is 9 p.m. As you might imagine, this eliminates most government meetings, all weeknight sports, and a lot of weekend sports from the newspaper. (I believe that at least all six Northeast Wisconsin Gannett newspapers print in Appleton now.)
If it strikes you as strange that a daily newspaper would do things to handicap its ability to cover the news on a daily basis (as in the things that happen today appearing in tomorrow’s newspaper), you’re not alone. The big winner here is the weekly newspaper that covers an area that is not part of the primary coverage area (or not anymore) of a daily newspaper. Weeklies are doing better than dailies because weeklies don’t generally have print competition. No one has figured out how to deliver the news of a community newspaper (including such events as births, school news, engagements, weddings, deaths, criminal court listings and local sports) better than print. At least not yet.
This all was foreshadowed for the farsighted when Journal Communications abandoned its legacy of employee ownership and went public in between my terms as a Journal employee. (And, the first time, employee-owner.) Something like this had been rumored for years, because Journal was seen as being big enough to be acquired but not big enough to acquire, but impossible to pull off because the employee-owners (as well as the Grant family, which kept a minority interest) would probably not approve a sale. The employee-owners were gotten rid of by going public, which raised stockholder money so Journal could purchase more broadcast properties. Scripps shareholders ended up benefitting from that, and now Gannett shareholders will benefit, if not Journal Sentinel readers and advertisers. And as I discovered, while stock is good to own, a publicly traded company is not a good place to work, given the panic that takes place every time there is an earnings report that can be perceived as negative.
There will be some Wisconsinites who will be perfectly fine with this because they hate the Journal Sentinel and its liberal political slant and cheerleading for the John Doe investigations against Gov. Scott Walker and conservatives. At the risk of channeling my inner Chris Cillizza, they should be careful what they wish for. USA Today is not a politically conservative newspaper, nor is the Des Moines Register. The Journal Sentinel does a lot of reporting, including in sports, that has no political slant, including sports. (The JS employs Bob McGinn, the best current Packer writer; if I were McGinn I would be updating my resume immediately.) The chances a competing non-liberal Milwaukee newspaper will be published are slightly greater than absolute zero.
As I’ve written here before, the splitting of print from broadcast strikes me as a mistake, though something other media companies are doing. It’s a mistake because I see print and broadcast in the process of merging into one single information source, with different delivery vehicles, thanks to the Internet — print if you want it, audio if you want it, video if you want it, available 24/7. Splitting off print and broadcast properties goes in the wrong direction.
And as I wrote here before, this is yet another example of a Wisconsin company leaving the state by acquisition. As an employee it is good to work as far away from corporate headquarters as possible, but a company’s interest in corporate contributions to their community drops like a rock the farther you get away from the corporate offices. Journal was a huge presence as a corporate citizen in the Milwaukee area in its employee-ownership days; it probably dropped after the company went public, and it will drop near zero with the decisions being made in Virginia instead of Wisconsin.