Worcester Business Journal

8 Worcester Business Journal | March 19, 2018 | wbjournal.com BY ZACHARY COMEAU Worcester Business Journal Staff Writer The NY corporation known for cost cut- ting and profits has in- creased its control over the region's news content Newspaper giant of Central Mass. C hances are now very high daily community news coming out of Central Massachusetts will be from a publication owned by a large media corporation, with a strong commitment to the bottom line. With the exception of the Gardner News, six of the seven daily newspa- pers in the region are owned by multi- publication companies from outside Massachusetts, and in late February the company owning the most and largest of those newspapers – New York-based GateHouse Media, which owns the Worcester Telegram & Gazette, MetroWest Daily News and Milford Daily News – bought out five weekly newspapers and one monthly magazine in the region. GateHouse's $1.2-million purchase of Millbury-based Holden Landmark Corp. – which operates Worcester Magazine, the Holden Landmark, bay- stateparent magazine, the Grafton News, the Millbury-Sutton Chronicle and the Leominster Champion – puts more local news under the control of an organization in acquisition-and-cost- cutting mode since it emerged from bankruptcy four years ago. "It's a good opportunity for us to really begin to look at how we're utiliz- ing our precious resources and report- ing in the field," said Telegram Publisher Paul Provost. Buy and cut GateHouse's parent company, New Media Investment Group, operates 142 daily newspapers, 326 weekly newspa- pers and 569 locally focused websites. In 2014, GateHouse filed for Chapter 11 bankruptcy, and out of that emerged New Media. The firm has since spent more than $900 million on acquisitions and increased its dividend 37 percent. The company recorded a profit of at least $31.6 million in two of the last three years, and increased revenue from $1.2 billion in 2015 to $1.25 billion in 2016 to $1.34 billion in 2017. Those increasing revenues and profits have come as New Media has cut costs, including by trimming personnel. Last year, it cut operating costs not related to its acquisitions by $42 mil- lion, including a $22.5-million decrease in compensation. That trend was true for 2016, when it cut operating costs unrelated to acquisitions by $24.3 mil- lion, including a $10.2-million cut in compensation. This cost cutting is a relatively com- mon practice among large media com- panies. Virginia-based Gannett Co., which publishes USA Today and more than 100 daily newspaper throughout the county, had more than $3.1 billion in 2017 revenue and has reported sever- ance costs of $152.8 million since 2015. At the Telegram, the newsroom staff is about 120 employees, down from its heyday of 800 in the mid-1980s, although that reduction has come as the media industry has adjusted to the long- term loss of advertising and subscrip- tion revenues revenues and under vari- ous corporate owners, including The New York Times Co., Florida-based Halifax Media Group and GateHouse. Mark Henderson, a former digital editor at the Telegram, was laid off after the paper's acquisition by Halifax, which bought the paper in 2014 from Boston Red Sox Owner John Henry, only to sell its papers to New Media later that year for $280 million. Chains like GateHouse and Denver- based Digital First Media – the owners of the Fitchburg Sentinel & Enterprise, Lowell Sun and the Boston Herald – have found their niche by driving mar- gin from their properties and returning value to shareholders, Henderson said. "Basically, [GateHouse] is at the top of their game in doing that," he said. GateHouse is executing its gameplan, but that may not be best for local com- munity news, with Henderson saying, "I don't think there's enough investment going on on the content side." A $1.2M alternative purchase GateHouse's purchase of Holden Landmark gives the company control over another voice in the region: weekly community newspapers and – in the case of Worcester Magazine – a publica- tion founded as the alternative to daily newspapers like the Telegram. The Landmark purchase is unique, though, because its publications were already owned by a GateHouse executive. Kirk Davis, GateHouse Media's CEO and COO of New Media, owned the small cluster of papers as a side venture. The acquisition "definitely strength- ens [GateHouse's] position in Central Mass.," Provost said. After years of Telegram reporters competing against reporters of a compa- ny owned by Davis, all can collaborate under one proverbial roof, Provost said. The goal, he said, is to preserve those publications, but to also improve upon them. How and if those papers will share editorial content has been yet been decided. Worcester Magazine's distinct voice adds a different layer to GateHouse's publication portfolio, Davis said. "The key to being successful is to be distinctive in what products you offer," he said. "That's been a good formula for the Worcester Magazine, as it has been for community newspapers." Davis said all Landmark staff would be hired by GateHouse initially, "but how things evolve in months and years GateHouse Media's holdings in Central Mass. include three daily, five weeklies and one monthly magazine.

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