Is Gannett close to acquiring Milwaukee Journal Sentinel?

[old_tony]

Just six months after the paper was absorbed in a merger with Scripps, reports say Gannett about to acquire the new conglomerate.

http://www.bizjournals.com/milwauke...sentinel-near-deal-to-be-sold-to-gannett.html

That can't be good.

 

[JayFarrar]

That means Gannett would own all the papers in Wisconsin, or most of them and also most of the papers in Tennessee as they would run up I-40 from Memphis to Knoxville with all points in between.
The only large Tennessee paper that wouldn't be Gannett is Chattanooga.

 

[spadjo martin]

Buyouts/layoffs sure to follow.

 

[DanOregon]

How do you think they figured out the financing on this deal?
» Gannett’s Chief People Officer would like to see more people volunteer to leave Gannett JIMROMENESKO.COM

 

[steveu]

Buyouts/layoffs sure to follow.

Some parts of the JS are bare bones. I know the copy jobs will likely go to the design hubs. Don't know much else.

Wow. Just wow.

 

[old_tony]

Some parts of the JS are bare bones. I know the copy jobs will likely go to the design hubs. Don't know much else.

Wow. Just wow.

Thinking this through, since the JS might be one of the bigger Gannett papers, would they make Milwaukee one of their copy/design hubs?

 

[Baron Scicluna]

AP reporting it's done, for $280 million.

The third through fifth grafs of the AP story are telling:

"Industry experts say the publications are a natural fit for Gannett's strategy of maximizing short-term profits through managing the decline of publications in less competitive markets.

Gannett's "prevailing strategy is economy of scale," which involves reducing local costs and consolidating or regionalizing many operations, analyst Ken Doctor said.

"Undoubltely, there will be some (layoffs) in any areas that can be centralized," including technology, newsrooms, human resources, finance and some advertising, he said."

 

[spadjo martin]

What about duplication of beats within the different properties? Doubt they would let that happen.

 

[old_tony]

What about duplication of beats within the different properties? Doubt they would let that happen.

McGinn makes a lot of money compared to the rest of them. Laying him off probably saves as much as laying two or three others. Bob is one of my very favorite people in the business. I really fear this once-great property becoming a part of the Gannett Gestapo.

 

[nickp]

so goes another of Wisconsin's great newspapers gutted in time thanks to Gannett

 

[DanOregon]

Figure the pro sports beats will be slashed in TN and WI as well.

 

[Baron Scicluna]

Hey, on the bright side, Milwaukee and Memphis have a high percentage of African-Americans. Think of the mainstreaming possibilities!

 

[DanOregon]

This isn't a good deal for workers, but a real good deal for Gannett. They'll be able to reduce costs, maximize market foothold and probably sell off the non-clusterable properties to pay this deal off in about five years if the $30 mil per year profit from the JMC is accurate. Hell, the real estate alone is probably worth more than $280 million.

 

[HejiraHenry]

"Managing the decline." Ugh.

 

[Matt Stephens]

That means Gannett would own all the papers in Wisconsin, or most of them and also most of the papers in Tennessee as they would run up I-40 from Memphis to Knoxville with all points in between.
The only large Tennessee paper that wouldn't be Gannett is Chattanooga.

Madison is Lee.

 

[Bronco77]

The Journal Media papers have a copy editing/design hub in Corpus Christi, Texas, that was established about five years ago when Scripps owned the papers. Wonder what will happen there -- will it become another Gannett studio, or will it close?

In my neck of the woods, Gannett now will own four papers whose circulation areas are adjacent to each other and even overlap a bit -- Fort Myers and Naples on the west coast of Florida, and Treasure Coast Newspapers (Stuart, Port St. Lucie, Vero Beach) and Florida Today (Brevard County) on the east coast. I'd expect quite a bit of consolidation, with staffing taking a hit.

 

[mb]

As someone on a JMG copy/design desk ... how does this work? Are all the designers dead? What about copy editors? Dead, too?

 

[studthug12]

Designers are off site. I work in the Central WI hub and design studio is in Des Moines. Copy editors, you sir are funny. Nope, they are called producers now and there aren't very funny of them. Basically the design studio in Des Moines is laying out pages and producers are webbing and working on internet and giving final OK on pages. Basically page proofing or can ask them to use different photo, etc. Pretty bare bones in Central too. Walk in and maybe 5 desks are filled in news/sports area.

 

[LanceyHoward]

This isn't a good deal for workers, but a real good deal for Gannett. They'll be able to reduce costs, maximize market foothold and probably sell off the non-clusterable properties to pay this deal off in about five years if the $30 mil per year profit from the JMC is accurate. Hell, the real estate alone is probably worth more than $280 million.

I glanced at the corporate reports of the Journal and Gannett appears to be paying five times EBIDTA.

When the LA Times bought San Diego last spring they only fired nine of the approximately 175 editorial staffers (though I suspect that more have recently or soon will be fired in San Diego as part of the Tribune cutbacks.) But 40% of the rest of the San Diego staff, 169 in total, were fired within a week. I suspect Gannett will not be so gentle with editorial in this acquisition but will benchmark the 40% reduction in non-editorial (though admittedly much of this was from combining printing which may not always be possible). I don't know what the San Diego paper had been cash flowing but the Trib paid 85 million. If you assume they paid five times EBITDA like Gannett did for the Journal, or 17 million, and the Tribune company can save 10 million more annually in costs then EBITA rises to about 27 million, which is one/third of the purchase price.

If Gannett gains experience in centralization and can achieve significant savings which enables them to start to buy more and more papers at three or four times post-consolidation cash flow they will take over the newspaper world.

 

[Fredrick]

This isn't a good deal for workers, but a real good deal for Gannett.

Really? Gannett is one of those companies that lives to make employees' lives hell before they lay them off. To all the Gannett managers on here who have implemented Gannett policies on "unsuspecting" reporters/copy editors/sports editors (I mean sports writing coaches) how do you live with yourselves? Please explain.