Worcester Business Journal

10 Worcester Business Journal | May 29, 2017 | wbjournal.com Central Massachusetts' newspaper of record, the Telegram & Gazette, is striving after layoffs and succession of new owners Maintaining vigilance Telegram paid subscribers F or a century, the Telegram & Gazette filled a four-story building overlooking Worcester City Hall with the typical bustle of a newsroom. First, the presses that churned out 125,000 copies a night closed in 1992, having relocated to Millbury. Then, by the time the newspaper left in 2012 to move across Worcester Common, the building was two-thirds empty. T&G now takes up two floors of the Mercantile Center tower, but its name adorns the top of two sides of the building. That's the newspaper today in many ways: reduced in scope but still very much a visible piece of the region. "We can all see what's happening at daily newspapers in this country, right?" said Michael Angelini, the chairman of the Worcester law firm Bowditch & Dewey, who tried brokering local own- ership for the paper when it was for sale several years ago. "We're lucky to have a local newspa- per, and I think we have to remember that in Worcester," Angelini said. The T&G has faced the same chal- lenges as practically any other newspa- per in the country: declining revenues from print subscriptions and advertisers, with online readership growing but not fast enough to offset those other declines. At a time of consolidation in the industry, it has seen many of its printing and editing jobs eliminated, and has closed regional bureaus. No newspaper may be immune from industry challenges, even locally owned or nonprofit outlets, said Rick Edmonds, a media business analyst with the Poynter Institute, which owns one such nonprofit itself, The Tampa Bay Times. "Journalists don't like to hear this, but when revenues go down as significantly BY GRANT WELKER Worcester Business Journal Digital Editor as they have," Edmonds said, "it's pretty hard ... to hold the news side harmless." Quick succession of owners The Telegram & Gazette has strug- gled with falling circulation to match its shrinking newsroom. In the last year, circulation fell in one year alone by 29 percent, to 33,154, according to annual filings by its parent company New Media Investment Group. The T&G isn't alone, of course. Weekday circulation in 2015 fell by an average of 7 percent nationwide, accord- ing to the Pew Research Center. But the Telegram has had to endure the tumultu- ous time for newspapers while also going through a succession of new owners. The paper was locally owned until 1986, when three families who shared ownership sold to the publisher of The San Francisco Chronicle. At the time, the T&G had a cash-flow margin of nearly 30 percent and almost 800 employees, more than six times today's number of 120. By 2000, the T&G was sold to The New York Times Co. – for $296 million. "Sale brings heady times to the T&G," a column headline read in the Worcester paper about the sale. The Times sold the T&G and The Boston Globe to Boston Red Sox owner John Henry in 2013 for a combined $70 million, but Henry appeared to have had little intention of keeping the Worcester paper long. Henry sold the T&G eight months later to Florida-based Halifax Media Group – "Gallows humor, angst fill newsroom at the T&G," a column head- line said this time – which itself only kept the paper for seven months before selling to GateHouse, which later became New Media. Now part of GateHouse The newspaper remains one of the largest in Massachusetts and continues covering a broad swath of the region. In February, the paper won more than 30 awards from the New England Newspaper & Press Association. The Telegram was just one of several major acquisitions in Massachusetts and Rhode Island in recent years by GateHouse. The company, which now has about 125 newspapers nationally, bought the Cape Cod Times, The Standard-Times of New Bedford and several weeklies in 2013 for $87 million, and The Providence Journal the follow- ing year for $46 million. Consolidation of so many area papers New Media profits and losses After emerging from bankruptcy in 2013, Telegram parent New Media has turned around its financial fortunes. Source: New Media Investment Group '10 '11 '12 '13 '14 '15 '16 -$26M -$22M -$30M $788M -$3.2M $67M $32M 0 -100 $100 $200 $300 The May 23rd issue of the Telegram & Gazette had its usual mix of international, national and local news. 0 20 40 60 80 100 120 140 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 Total paid distribution 126,527 40,095 Source: Telegram & Gazette Statement of Ownership, Management & Circulation, published annually in the paper every fall *Distribution numbers not available for 2000 and 2008; the 2015 figure is from New Media Investment Group annual report to the U.S. Securities & Exchange Commission The number of people who pay to have the Telegram & Gazette delivered to them on a daily basis has dropped steadily over the last 25 years.

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