Local News in America: A deeply worrying plight. Democracy suffers. Yet leaders are reversing trends, community by community
Andy McLeod
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Local News in America:
A deeply worrying plight. Democracy suffers.
Yet leaders are reversing trends, community by community
By Andy McLeod
April 2023
A nation of “news deserts” created by a publisher?
Recently, while traveling in New York, I purchased the local newspaper, as I do often. In the Poughkeepsie Journal, the oldest paper in the state (1785), I found one story – a single bylined article – authored by a local correspondent, and it was on the sports page. Every bit of content in that day’s edition came from the Associated Press or a news service far away from the Hudson River Valley.
The Journal is one of more than 100 dailies and almost 1,000 weeklies owned by the Gannett company. And the Journal is sadly representative of Gannett’s appalling local business model for newspapers – maximizing advertising revenue, scrimping on local reporting and news gathering, and reaping huge profits. The communities are depleted, and they ache.
Below are two recent columns by the former editor of the Boston Globe Brian McGrory. They are searing indictments of Gannett’s CEO and, more importantly, the company’s destructive ownerships of its many newspapers.
And reason for hope
In the meantime, further south, this week marks the "Virginia Local News Summit" in Richmond. This first-ever statewide conclave is gathering reporters, editors, community leaders, foundation funders, and others to both, yes, shine a bright light on the plight of local newspapers but ALSO highlight the small, but real advances in local journalism, such as the growth of independent news nonprofits.
In advance of the summit, the two leading local news outlets – Foothills Forum and the Rappahannock News -- teamed up to produce a three-part series on the state of local news in the Commonwealth – and those creating new journalistic pathways. It’s GOOD READING!
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Gannett’s CEO is getting rich by gutting a newspaper near you
Mike Reed didn’t cause the collapse of the newspaper business,
But has managed to accelerate it
By Brian McGrory, Globe Columnist
The Boston Globe
March 23, 2023
I’m standing outside what used to be the newsroom of The Patriot Ledger in an office park in Quincy, wondering if Mike Reed has ever heard of the Ledger, or even Quincy.
I make a mental note to ask him.
Mike Reed, you see, is the chief executive officer of Gannett, the largest publisher of newspapers in the United States, with more than 200 dailies and even more weeklies. Good guy, people say, so let’s go with that. His corporate bio doesn’t list any hobbies, but maybe he walks rescue dogs at his local no-kill animal shelter on Sundays.
To be clear, Mike Reed didn’t cause the seismic collapse of the newspaper industry. No, larger forces had everything to do with that. But Mike Reed has inflicted brutal and probably irreversible damage on already struggling news organizations all across this country. Mike may well lead the league in bad decisions, every one of them made with the confidence of someone who never gets anything wrong.
More debt? Mike’s your guy. Distant, unresponsive ownership? Where’s Mike? Fewer journalists? Nobody’s better at sending them to the unemployment line than Mike.
Mike Reed used to be the CEO of GateHouse Media, which had the proud distinction of not being the worst of the private equity-driven raiders that were buying newspapers, gutting them for profits, then leaving them as scant shells of what they once were. In 2019, Reed set his sights on Gannett, another massive newspaper consolidator, albeit one with a prouder history. GateHouse bought
Gannett took its name and made Mike Reed the CEO.
At the time, Reed said the combined companies would save some $300 million in “efficiencies.” Pressed by a New York Times reporter in 2019 for some estimate of how many newsrooms cuts the chain could anticipate, Reed replied, “I can’t give you an exact number, but almost nothing.”
Good one, Mike. Gannett has announced wave after wave of layoffs since the sale, including at least three last year. It forced employees to take furloughs and other assorted pay cuts, paused the company 401(k) match, consolidated and closed papers, and froze hundreds of open jobs. Joshua Benton, the director of the Nieman Journalism Lab, wrote a lengthy story on the implosion of Gannett’s circulation this month in which he said the employee count was cut in half since the 2019 sale.
There’s more. Gannett stock has plunged about 70 percent under Reed’s leadership. The company is groaning under more than a billion dollars in debt from the sale, debt that had an initial interest rate north of 11 percent. Did Reed buy Gannett with a Discover card?
So, you, like me, might wonder what a company pays a CEO who has inflicted this kind of generational damage on journalists, on a particularly fraught industry, on many millions of would-be readers and the communities where they live, and on shareholders. The answer, courtesy of the most recent proxy: $7.7 million in 2021.
Let’s pause there. Does anyone really think Gannett couldn’t convince Mike Reed, a former CFO, to cause this kind of mayhem for $2 million a year, or maybe $1 million, instead of eight? Does anyone think that Reed deserves to be paid more than the CEO of The New York Times Co., which he is?
I took a quick look at the Gannett board of directors, thinking there’d be someone who might talk some sense. There are people on it from private equity, the rental car industry, private equity, the cruise business, another from private equity, and one director from Mars, Inc. who formerly held the title of, and I quote, “President, Chocolate.” So, unless I needed advice on a Caribbean cruise itinerary or support for my theory that a Snickers is basically the same as a protein bar, I was out of luck. One question: Would it be crazy to have a board member with some expertise in journalism for a company that produces, well, journalism?
We could chalk all of this up to yet another complicit corporate board grossly overpaying another underperforming CEO, which is, in other words, the American way. But there is something else at play here: We are at a perilous moment in our civic life. You’ve heard it before, and I’ll say it again: Democracy is under threat. Quality information is in short supply. Misinformation and disinformation are all over your social media feeds. Lies have become the currency of a certain kind of officeholder at every level, right down to your local school committee.
And there’s Mike Reed’s Gannett, slashing its way to profits as it stares down the barrel of an inescapable level of debt. Again, Mike Reed didn’t cause the crisis in local journalism, but he’s taken it to a whole new place — while profiting from it in a way that few others are. A nod here to local media analyst Dan Kennedy for raising the subject of Reed’s exorbitant pay last year.
The Patriot Ledger, which had a couple of hundred journalists at its peak, now has four news reporters. Four. When I worked there out of college, we had three people covering the town of Plymouth, and it was hailed as one of the best suburban papers in America. It’s hardly the only remnant. There’s The Cape Cod Times, the Providence Journal, the Brockton Enterprise, the MetroWest Daily News, the Worcester Telegram & Gazette — none better for Gannett’s stewardship. And so many reporter-less weeklies all over Massachusetts and beyond.
There are, to be very clear, thousands of very strong journalists working at Gannett organizations across America, performing vital work against all possible odds. Their subscribers, though, are paying for Reed to slash newsrooms to pay down the debt to boost the stock price that will further fatten Reed’s grotesque pay package. It’s really that basic.
I reached out to Gannett to request an interview with Reed. I got a nice note back from Lark-Marie Antón, the chief communications officer, saying that they’re seeing “improving revenue trends in Q1,” expect to “repay at least another $120 million” in debt this year, and that they’re “focused on delivering remarkable work every day.” Mike Reed, she said, was not available.
That’s too bad. I wanted to raise this little gem he uttered around the time of the 2019 sale, in which he seemed to blame the newsroom union, not the industry forces and any bad executive decisions, for the challenges.
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“I frankly think the Guild’s a big problem,” he said. “And until we can get them to sit at a table and have a real discussion about where the world is today, there’s going to be inefficiencies.”
That’s Mike Reed. He looks across the vast carnage of his work and sees a lot of unemployed journalists who are to blame.
Brian McGrory is a Globe columnist. He can be reached at brian.mcgrory@globe.com.
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Gannett’s CEO called to say, ‘the cuts are behind us.’
Is that a commitment, Mike Reed?
By Brian McGrory Globe Columnist
The Boston Globe
April 12, 2023
My phone rang the other day, and it was the chief executive officer of Gannett on the other end of the line — and not, as it happens, to say thank you.
Gannett is the largest publisher of newspapers in the United States, with daily and weekly papers across Massachusetts and the nation, most of them a remnant of what they were a decade ago.
The CEO is Mike Reed.
Reed’s on a tough run, his bloated pay package aside. He was the CEO of GateHouse Media, led it in and out of bankruptcy, bought Gannett in 2019, and became CEO of the larger company. Then the real trouble began.
To buy Gannett, Reed took on another billion-plus dollar in debt. He’s chopped the workforce by nearly 50 percent in the past three years, broken a vow to cut “almost nothing” from his newsrooms, watched morale plummet, senior talent flee, and the stock price plunge more than 70 percent. How bad is it? Since a February earnings call in which Reed talked about making “significant progress” and issued an upbeat forecast for 2023, the stock dropped another 50
Nobody, it seems, believes Mike Reed.
If Gannett produced, say, corrugated boxes, nobody would care about this debacle except its employees and creditors. But Gannett is supposed to produce journalism at a time when democracy is under threat, disinformation and misinformation are flooding the transom, and clear, reliable information is in short supply.
RELATED: ‘It’s devastating.’ As Boston-area weeklies close, towns ponder civic life without local news.
Reed placed his call a few days after I pointed out in an earlier column that he was getting notably rich — his pay package in 2021 totaled more than $7.7 million — to essentially gut newspapers, leaving some of them, as the Los Angeles Times pointed out last week, with no — and by no, I mean zero — reporters.
Give Reed credit. He arrived on the call bearing news — news in the form of another vow.
“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.”
Let’s take this as good news, even if we see extra innings. The CEO of Gannett, who has always acted like the sword is mightier than the pen, has said that the cuts that have come to characterize his rapidly shrinking organization are nearly over.
Again, Reed did not cause the crisis in local news. He is not responsible for the profoundly broken business model that is playing havoc with virtually every news organization in the United States and beyond. He at least says the right things about wanting to address it.
But his actions have accelerated the decline for Gannett papers. And he has profited handsomely as thousands of his employees have been sent to the unemployment line.
Reed said he feels the pain but that the pain is necessary to make things better. “I’ve dedicated my 35-year career to this industry,” he said. “I’m deeply committed to the industry. I love the industry … At the end of the day, I’m a pretty normal guy who is trying really hard to make sure there’s a business model.”
He explained that to ultimately turn Gannett around, he needs to bring it down to an affordable size. Once it’s there, turning a profit, adding digital subscribers, bringing in digital ads, growing its business around digital marketing, it will invest in more journalists, he said. At least that’s the plan.
“We’re focused on investing in growth,” he said. “There are markets that we’re ready to make the investment now. Our audience is growing, and our subscriber base is growing.”
Reed underscored that Gannett has made far fewer cuts in its newsrooms than on the business side, and he is right about that.
But just as I want to empathize, even sympathize, with Reed, I keep coming back to the same place, which is that his own actions have made a hard situation nearly impossible for Gannett to overcome. He burdened his company with well north of a billion dollars in debt. Because of that, hundreds of millions of dollars have already poured out of the company to private equity partners and Gannett executives.
With few exceptions, successful news organizations have one factor in common — a local, debt-free owner who understands and values the importance of local journalism. In all due respect to Reed, Gannett offers none of the above.
For the record, Reed’s pay package, which was $7.7 million in 2021, dropped to $3.4 million last year, a fact first reported by the Boston Business Journal last week. While the direction is right, it remains a lot of money for an executive who is mostly failing in plain sight.
I asked Reed if he regretted buying Gannett when he headed GateHouse Media and taking on all that debt. “No,” he said. “The Gannett transaction was what both companies needed to transform the business.”
“The decisions we’ve had to make are very hard,” he said, adding, ”I understand why people don’t see eye to eye with me. Part of that is the nature of the bullets that a CEO has to take for having a future for the next 50 to 100 years.”
Gannett will be reporting executive compensation for 2022 in the coming weeks. The prediction here is that Mike Reed, unlike the rest of his company, will have done just fine.
Let’s end near where we began: Mike Reed says the cuts are over, or at least nearly over, and that investment is next. Let’s assume that the CEO of the largest publisher of newspapers will finally be good for his word.
Brian McGrory is a Globe columnist. He can be reached at brian.mcgrory@globe.com.
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