Gannett CEO: 'Protecting journalism is the right thing to do'
Posted November 19, 2019 4:11 p.m. EST
CNN — New Gannett is here.
The merger between US newspaper giants Gannett and GateHouse closed on Tuesday, ushering in an era of cost-cutting, including layoffs, for the new entity composed of hundreds of local newsrooms. The combined company is retaining the Gannett name.
Media advocates have feared the merger's repercussions to local newsrooms since the deal was announced in August. NewsGuild, which represents more than 20,000 journalists, released a study earlier this month that argued "local papers will likely disappear, jobs will be slashed, and journalism will suffer" because of the merger. The Brookings Institution's Clara Hendrickson wrote this week the deal could "deepen America's local news crisis."
The companies said in August that annual cost savings would be about $300 million per year. But it's unclear where the cuts might fall. Gannett employs about 24,000 employees, including 2,500 "frontline" journalists. The new entity's leadership told CNN Business they plan to invest more in journalism and reporters across their markets.
"This idea of protecting journalism is the right thing to do; it's also good business, because the digital businesses we want to build in the future are built on the trust and the engagement from the consumer side, from the readers, the subscribers," Gannett Media Corp. CEO Paul Bascobert told CNN Business.
Yet newsrooms under both Gannett and GateHouse have been shrinking. Gannett cut one-fifth of its staff over the last two years, The Washington Post reported. Mike Reed, CEO of the parent company Gannett Co., Inc., told CNN Business he believes the cuts in newsrooms would have been deeper without the merger.
"Both companies are both public, and you can see what's happening to revenues. When you put these companies together and you're able to eliminate all the duplication costs, next year, in 2020, we're saving a ton of newsroom jobs," Reed said.
While Reed said Gannett's goal is not to lay off journalists, he did acknowledge "some duplication" in newsrooms that operate in the same markets.
"We have a ton of papers in Florida. Gannett has a ton of papers in Florida, so do you have duplicate coverage of the governor or the capitol? Do you have duplicate coverage in Ohio, of Ohio State football? But even with those types of situations, we could redeploy those journalists into other things," Reed said.
Bascobert's vision for Gannett's future includes more collaboration across newsrooms. He cited a recent USA Today Network investigation on immigration, involving dozens of staffers, as an example of such collaboration and said more stories could be discovered and told through big data.
"Whether it's education levels, water quality levels, infant mortality rates, these are interesting trends that as an individual market it's a little hard to index sometimes, but as a national platform in 250 markets, we actually have the ability to pull this data and start to look at patterns," Bascobert said.
Bascobert also plans to create more digital projects. For example, the York Daily Record, a Gannett-owned daily newspaper serving York, Pennsylvania, runs a Facebook Page called "Fixing York," with more than 16,000 members. The newspaper recently launched a "test" of a similar project on Gannett's own platform.
"It's fine it's happening on Facebook, but that's not a platform built for local conversations to be properly curated, searched, indexed," Bascobert said.
He said Gannett is investing in "growth engines," which includes circulation and its digital marketing services business. Gannett also plans to invest in a lead generation business, creating a marketplace that connects buyers and sellers in local communities. Bascobert likened the business to traditional classifieds, for example, connecting homeowners with plumbers. He oversaw a similar operation when he was president of XO Group, which owns wedding website The Knot.
"Today consumers are going off to some national platforms somewhere in California or somewhere else to connect to the person who lives six blocks away from them to say, 'Would you cut my lawn?' It seems crazy that we can't, as the local brand of consequence, bring those two people together. They're already on our platforms," Bascobert said.
Last month, Gannett disputed rumors of plans to discontinue USA Today's print edition after a Poynter report cited sources who said moving away from print is part of the deal. Bascobert told CNN Business all print editions, including USA Today and its other daily and weekly papers, are profitable. But that doesn't mean it will always be that way.
"Print is frankly funding a lot of our investments in building for our future businesses. Print is declining, right? You can look at the numbers that it's declining, and so the idea is while it's [still] generating all this amazing cash flow, build businesses for the future," Bascobert said.