GateHouse gobbles up more newspapers

Remember when GateHouse Media officials sent out memos cutting back on buying things like coffee and office supplies like, oh, paper, and the company’s stock went from an initial offering of about $20 a share to dropping like a rock to a penny and being delisted on the New York Stock Exchange? Apparently, they don’t either.

The once-bankrupt newspaper giant has reemerged as a Pac-Man-type conglomerate, devouring media properties up and down the coast that the sellers are all too willing to part with. GateHouse’s endgame is anybody’s guess but it’s clear the Rochester, New York-based company, which got its start by buying the former Community Newspaper chain from Boston Herald owner Pat Purcell and some of the more prominent regional dailies in Massachusetts, is looking to be the last man standing in the print business. For what it’s worth.

 

The latest acquisition for GateHouse, through its corporate overseer New Media Investment Group, is the Halifax Media Group, based in Florida. Among the 35 properties in the $280 million deal, which includes 24 dailies to add to their stable, is the Telegram & Gazette in Worcester, the third time that paper has changed hands in less than a year and a half. Boston  Globe owner John Henry, who bought the paper from the New York Times Company, flipped it to Halifax in a deal panned by locals who remembered his promise to sell to locals. Well, now it’s sort of happened in a roundabout way.

The sale is notable on a number of levels, not least of which is the acknowledgment by GateHouse CEO Kirk Davis, the former publisher of the Patriot Ledger and Brockton Enterprise who helped engineer the creation of GateHouse, of the journalistic bona fides of the new members of the family, including the Pulitzer pedigree of several of the southern papers in Alabama and Florida. In previous acquisition announcements, GateHouse officials often only cited the business benefits of the deals, a nod to investors in the publicly traded company.

The purchase expands the GateHouse footprint into the southeastern corner of the country, an area that had largely escaped their reach. With the new deal, which is expected to close in the early part of next year, the company now has a formidable presence in all four corners of the country as well as a healthy standing in the Midwest and central United States.

But unlike its early strategy of buying bulk, which included hundreds of weeklies and penny-savers, the last few years since emerging from bankruptcy have seen the company pick off daily newspapers in some very significant markets. In September, GateHouse bought the Providence Journal for $46 million and last year scooped up the Dow Jones Local Media Group that included eight dailies and 16 weeklies, including the Cape Cod Times and the Standard-Times of New Bedford, for $87 million. Since restructuring its debt last year, coinciding with the Dow Jones purchase, New Media will have written more than $430 million in checks when the Halifax deal closes.

Adding Halifax’s 635,000 daily circulation to its current 550,000 gives GateHouse a formidable daily circulation of 1.1 million newspapers. In addition, the 80 websites included in the purchase bring the total to more than 430 hyperlocal sites, with hundreds of millions of eyeballs every month. It’s also notable that GateHouse’s biggest presence, including with this purchase, is in regions that have a high concentration of older readers, such as New England and now the retirement communities in Florida and the Carolinas, target audiences who have remained among the most faithful of newspaper consumers.

But, when you lay out that much money, you have to cut costs, and GateHouse has been notorious for slashing employees and expenses. Some of the work at the T&G has already been done for them by John Henry and Halifax, but few will be surprised if there are more cuts on the way. GateHouse has a central copy editing and layout desk in Austin, Texas, that handles the bulk of editing, making some local copy editors redundant. Just ask those at ProJo.

Locally, the deal also has financial implications for the Globe and Boston Herald. When Henry sold the T&G to Halifax, he kept the paper’s printing plant in Millbury for himself for the time when he could sell the Globe‘s Morrissey Boulevard property and move the printing out that way. But part of the Globe‘s business is printing a number of area dailies, including the Herald, Ledger, T&G, and Enterprise. With the purchase of the relatively new printing presses of the ProJo as well as its own presses on the Cape and in Auburn, GateHouse may no longer be in need of the Globe‘s services.

It’s unclear what the printing contract the company inherited says about termination, but you can bet when GateHouse can save money by doing it in-house, they’ll find a way. They always do.

JACK SULLIVAN

BEACON HILL

Martha Coakley joins Emily Rooney to talk about her final days as attorney general, her loss to Governor-elect Charlie Baker, and what the future holds for her. She also joins Broadside’s Jim Braude for a similar conversation. By the way, Baker’s margin of victory over Coakley was the closest governor’s race in 50 years, NECN reports.

Baker says he is not keen on the idea of big raises for top Beacon Hill leaders.

House Speaker Robert DeLeo is not going along with cuts to local aid proposed by the Patrick administration.

Scot Lehigh has quite a bit of fun with the Travels with Charlie saga of Baker’s secret mission to the Republican Governors Association meetings in Florida.

When it comes to education issues, Deval Patrick has been a reluctant reformer, writes CommonWealth‘s Michael Jonas.

Globe columnist Adrian Walker, cribbing from a recent CommonWealth report, backs a state plan to lease Daly Field along the Charles River to a group that includes Simmons College.

MUNICIPAL MATTERS

Lawrence Mayor Daniel Rivera unveils new software that will allow residents to easily file complaints against police officers, the Eagle-Tribune reports.

Globe columnist Larry Harmon says the Walsh administration should try to work out a deal for a private-financed soccer stadium along Frontage Road in Boston, a site the New England Revolution are eyeing.

CASINOS

Massachusetts casino operators push back on a proposal to allow gamblers to voluntarily set limits on their betting, WBUR reports.

Both Wynn Resorts and MGM Resorts announce plans to take on $1 billion in debt to finance their casino expansion in Massachusetts and elsewhere, the Associated Press reports.

Federal officials are investigating Wynn for possible money laundering violations.

In a New Jersey federal court, professional sports leagues hang their case against legalized sports betting on narrower arguments — a sign that the leagues may see betting as inevitable.

NATIONAL POLITICS/WASHINGTON

President Obama, moving past the gridlock that has prevented any legislative movement on immigration, unveiled details of an executive order that will protect 5 million undocumented immigrants from deportation. Bloomberg Politics sees the move as a bet that the demographics of presidential swing states will make the order politically impossible to reverse, while the Atlantic paints it as an impulse from the activist side of his brain, rather than the side that yearns for bipartisanship. The Wall Street Journal editorial page hates the move, because obviously. The National Review joins the chorus, saying impeachment may be out but how about censure?.

It’s back to Fox News for Scott Brown.

ELECTIONS

Nationally, unions are rethinking their strategy after a string of losses at the polls, Governing reports.

In The New Republic, Michael Kazin urges Sen. Sherrod Brown of Ohio to run for president, essentially making the case that he was Elizabeth Warren before Elizabeth Warren was.

Bloomberg Politics examines the complicated dance involved in turning Hillary Clinton‘s massive non-campaign operation into a functioning presidential campaign.

BUSINESS/ECONOMY

The US attorney’s office is considering whether to use federal law to try to block medical marijuana dispensaries from opening within 1,000 feet of schools, something that the Globe says would apply to six of the 15 facilities that have been provisionally approved.

There is lots of interest in the Greater Boston Chamber of Commerce presidency, writes Shirley Leung. And who wouldn’t want to make half a million dollars a year to host early-morning networking breakfasts that involve a bit of chatter over coffee and soggy Danish pastries, she says.

A federal judge rules that local ordinances in Lynn and Worcester requiring banks to go to mediation with homeowners who are behind on mortgage payments can continue, the Item reports.

The master developer of the mixed-use Southfield project at the former South Weymouth naval air base says it will pay the overdue tax bill but refuses to say when or why it’s late.

The Gloucester Times profiles Paul Vitale, a fisherman who is contemplating a change in profession in the wake of the cod fishing ban.

EDUCATION

The Civil Rights division of the federal Department of Education opened and closed three investigations of sexual assaults at UMass Dartmouth over the last 12 years, determining school officials acted appropriately in handling each case.

The Salem School Committee votes to explore giving schools more autonomy, the Salem News reports.

The University of California approves a steep tuition hike, Time reports.

Meet the Author

Jack Sullivan

Senior Investigative Reporter, CommonWealth

About Jack Sullivan

Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe.

He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment.

Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members.

At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce.

About Jack Sullivan

Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe.

He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment.

Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members.

At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce.

HEALTH CARE

Doctors at South Shore Hospital say there’s been a marked increase in apparent heroin overdoses, including three this week alone, that indicates a batch of unusually potent heroin or a mixture that includes potentially lethal substances.

California’s managed care program for poor elderly people isn’t working very well, Governing reports.

ENERGY/ENVIRONMENT

Unprecedented numbers of turtles, including a giant loggerhead, have been stranded on Cape beaches this fall.

For everyone outside, Buffalo, here is the 411 on lake-effect snow.