There were two pieces of bad news on the state’s media front today — one substantive, the other more symbolic.
The latter is the departure of Rob Mitchell from the Rutland Herald and Barre Montpelier Times Argus. The former is the fully-consummated merger of Burlington Free Press owner Gannett with GateHouse, forming the largest (by far) newspaper chain in the country. The combined entity, now saddled with $1.8 billion in debt and facing continued declines in circulation and ad revenue, is set to go on a cost-cutting spree that could eliminate more than 10 percent of its workforce.
Mitchell had continued to serve as general manager of the papers after their 2016 sale to Pennsylvania-based Sample Newspapers. His resignation marks the end of more than 80 years of Mitchell family involvement in the two papers.
If he’s being in any way forced out by the new owners, he’d doubtless keep that to himself. He did say that “I started to realize that I wasn’t growing in this role anymore,” which could be taken to mean that he didn’t see a future under outside ownership.
The Mitchells’ tenure wasn’t perfect, but they were at least local owners answerable to their own communities. Sample, whose properties include a few dailies and a lot of weeklies and free shoppers, has no such ties. So far, its tenure has not seen noticeable cuts — but neither has there been any tangible sign of strengthening the Herald and Times Argus, which have been bare-bones operations for years.
The Gannett/GateHouse deal creates a true industry monster that will control 18 percent of America’s dailies. Ken Doctor, news industry analyst who writes the Newsonomics column for the Nieman Foundation, expects that one in eight G/G employees will be out of a job by the end of 2020. And that’s on top of a fresh round of layoffs expected to come even before the GateHouse bloodletting begins.
Most of the cuts, at least initially, will be in non-newsroom operations, where corporate synergies are most readily realized. But don’t doubt for a second that a lot of reporters will be out of work as well. The finances of the merger have worsened substantially since it was announced in July. GateHouse stock prices have taken a substantial hit and other chains have taken their lumps as well. (McClatchy, now the nation’s second-largest newspapaer chain, is desperately seeking a merger partner and is negotiating a “distressed termination” of its pension plan with the federal Pension Benefit Guaranty Corporation.) Doctor’s estimate of the cost-cutting target has doubled — from $200 million to $400 million, and perhaps even higher.
The new Gannett faces a gauntlet of challenges, plus a new $1.8 billion loan that’s financing the merger. That loan carries a hefty interest rate of 11.5 percent, which means Gannett will be trying to pay it down as quickly as possible.
So don’t expect a newsroom reinvestment of those back-office savings.
Bad news all around, but nothing new for an industry that has struggled to reinvent itself for the digital age. In the absence of positive strategies for reversing their downward spiral, newspaper chains seem certain to rely on their One Weird Trick for balancing the books — cutting, cutting and more cutting.