By Dan Kennedy
Boston Globe columnist Brian McGrory wrote Wednesday that he’d heard from Gannett chair and chief executive Mike Reed after his recent piece detailing the devastating cuts that the country’s largest newspaper chain had endured. Reed told McGrory that the worst was over and that happy days were almost here again. McGrory wrote:
“My full intention is to do more journalism, not less,” Reed said. “We’re so close to that inflection point that the major cuts are behind us.” Moments later, for emphasis: “The cuts are behind us.”
Is that a commitment, Mike?
He hesitated. I swear I could hear the loud warning beeps from a truck backing up. “What I’m saying is we’re near the end of the process on the reduction side,” he replied. Then this: “I wouldn’t say that I don’t know there’ll be one more cut.” And finally: “We’re in the ninth inning of the game.”
It sounded so familiar. I’ve written about Gannett and its predecessor company, GateHouse Media, many, many times over the years. For instance, after I wrote for GBH News in June 2019 that GateHouse seemed to be imploding, Reed contacted me to push back. He wouldn’t put any of our phone conversation on the record, but he didn’t need to. Because it’s been the same old song for a very long time.
How long? Let’s go back to August 2008, when GateHouse’s stock price was taking such a pounding that it could not longer be traded on the floor of the New York Stock Exchange. In a conference call with investors, according to the Rochester Business Journal, Reed was full of assurances that the worst was over. “Our results, while below our estimates, are holding up quite well, and our capital assets put us in a position of strength going forward,” he said. And: “We believe our assets will continue to produce strong cash flows and when the economic cycle improves we are positioned in our small markets to grow.”
If that’s not enough déjà vu for you, consider that, around the same time, the website 24/7 Wall St. named Reed “The Most Overpaid CEO Of The Day,” noting that he was being paid a salary of $500,000 to preside over a company whose stock price was down 90%. As readers of Media Nation know, Reed was just getting started. He received $7.7 million in total compensation in 2021, and was rewarded with another $3.4 million in 2022. Meanwhile, Gannett newspapers are being shut down and journalists laid off by the score.
In October 2008, I wrote a piece for CommonWealth magazine about GateHouse’s operations in Eastern Massachusetts — around 100 community newspapers, mostly weeklies, that it had acquired from Boston Herald owner Pat Purcell, who had in turn purchased them from Fidelity Capital a few years earlier. The theme of the day, inevitably, was newsroom cuts. But Kirk Davis, then the president and publisher of GateHouse Media New England, was, to invoke an old cliché, cautiously optimistic:
“We feel that community newspapers have a very viable future and, juxtaposed against the trend overall, are performing very well,” says Davis, arguing that small, community newspapers have a competitive advantage over major metros because their locally focused content is not available elsewhere. “I believe in it, and I believe it’s going to stay strong.”
Five years later, the company sought Chapter 11 bankruptcy protection so that it could restructure $1.2 billion of the debt it had taken on in assembling its newspaper chain.
The cutting continued after GateHouse emerged from bankruptcy, sometimes slowly, sometimes quickly, but always with the same downward momentum. In late 2019, GateHouse merged with Gannett, a longtime publisher that was also notorious for running its papers on the cheap. The new Gannett was saddled with $1.1 billion in debt, and a lot of that has been financed by cutting the workforce in half, as Axios reported recently. Davis left shortly after the merger, but Reed continues to decimate newsrooms, just as he continues to insist that better days are just around the corner, as he told the trade publication Editor & Publisher last November.
The problem with Gannett, as always, is that better days for Reed never translate to better days for his newspapers, his journalists or the communities they serve. McGrory’s skepticism is warranted.