Gatehouse buying Halifax

Wasn't too long ago that some of the Florida papers headed to Gatehouse were owned by the New York Times. Talk about a downward ownership trajectory.

 

As someone who works for one of the papers being bought, I have more than a passing interest here. We were cut back a bunch during the NYT era too. We heard all the bad things about Halifax. Not much has changed during their tenure, with the main thing being we kept our jobs. I can only think positive, go to work each day and hope for the best.

 

Yep. In the same boat with you.

It's easy to sit back and guess as to what is going to happen but when you're directly affected by it, well you definitely know more than anyone else outside the situation.

 

Well, my thoughts are with you guys. I've been through two ownership changes (one of which dragged on for almost a year before the sale went through) at places I've worked, and all you can do is focus on the tasks at hand.

 

My thoughts as well are with the former Halifax papers. I talked with one this year about a digital editor position and found the organization to be a first-rate class act.

 

In spite of the non-competes?

 

I would really like to know the multiple of the sales prices to EBITDA. Ken Doctor wrote that private party transactions are taking place at a multiple of four. That was the multiple used when the New York Times sold the properties to Halifax.

The reason for the low multiples are that revenues are declining and what you make this year will probably be less than what you make next year. But at those multiples someone like Gatehouse can rationally say that newspapers are dying. But they can have a strategy of cutting the hell out of costs for the next few years. If they can maintain cash flow at something approaching 2014 rates they can pull enough money out of the paper to recoup their investment. And if they close individual papers there may well be some headquarters real estate they can sell of on the way out the door for a good price.

But it will be a horrible place to work as the costs are cut annually.

 

Halifax pulled those off the table due to employee backlash. And believe me, there was a lot of backlash.

I'm not sure if brand new employees had to sign them though, but I know existing employees did not.

 

Seems like a company that would try a thing like that, unless they have a legitimate business interest, such as sales, isn't a first-class act.

 

As a new employee, yes, I did have to sign one.


My question: Will the change in ownership make those non-compete clauses null and void?

 

I can only speak of the experiences in dealing with the paper. I'll out the paper and the sports editor and say it was Tuscaloosa and Tommy Deas.

 

i feel for you, heel, and all you others. halifax wasn't as bad as feared after they caved on the noncompetes, but they were no nyt. glad i'm not still around for the gatehouse era.