Gannett has been one of the most feared and intimidating newspaper tyrants since the early twentieth century. In Gannett’s lifetime, they been solely focused on what to do to see a profit, so they don’t think twice about the cuts they’re making or who these cruel, selfish decisions are affecting. It came out in early January of 2019 that MGN enterprises, or Digital First, who has the reputation of being even more cruel than Gannet, is working on buying out Gannett, which would allow MGN to take over the 75 daily newspaper Gannet owns, along with any and long of their radio stations or T.V. programs. When MGN took over the Denver Post, they brutally cut over 30 jobs without blinking an eye, and current news writers are worried about their fate as the takeover looms over their heads.
Even though it has been over a month since the announcement came out, MGN enterprises still has not come up with enough money to take over Gannett Co. The reason Digital First has suddenly decided to try and overpower Gannet is because Gannet has lost 40% of its total value since 2016. They have been sinking fast, and it is an obvious opportunity and prime time for MGN to take over this huge company that will bring them in the money that they’re searching for. Writers in Detroit are hoping that take over is unsuccessful, because they areworried MGN will begin to combine some of the papers together, like they did to the Detroit News, to save themselves the cost.
Since 1906, Gannett has been heavily involved in the media business. Frank Gannett, the founder of Gannett Co., and several of his colleagues bought the Elmira Gazette in New York, with only $3,000 in their savings (Boulton). Not long after that, they decided to buy another local paper from New York, and merge the two together to form the well-known Star-Gazette. Even today, Gannett has still looked at local newspaper and seen an opportunity to combine them into one, better paper. This did get the name of their company out there, but it wasn’t until 1912, when they bought the Ithaca Journal, that they started becoming recognized by more and more people.
Gannett officially went public in 1967, and that was only three years until they started growing rapidly due to their many acquisitions. Over the next decade, they would merge with many different companies, essentially doing anything to make a profit. During the 1970’s, Gannet had two extremely notable mergers: Federated Publications in 1971 and Speidel Newspaper in 1977, each earning Gannett a bigger profit than they had ever seen (Boulton).Over the past 50 years, they’ve learned how to trade some of what they own for what will end up bringing in more money, and brought them into the billion dollar company league.
While Gannett clearly became a very powerful and intimidating company, in the last 2 years they’ve lost much of the respect they’ve gained since they started in 1906. They’ve been making headlines for weeks; whether it’s about their plummeting stock prices, the company’s board and the decisions they’re making, or the battle against Digital First to keep the company. Out of all the moving parts of this story, the most important is the stock price because as it begins to decline, Digital First becomes more confident and eager to place an unbeatable bid on Gannett.
The problem with Digital First’s plan is that although Gannett should have already become weak enough to beat, Gannett is still being defended, having their representatives “describing them through its own machinery as heroic epics.” As long as their employees continue to openly support their methods, there will never be enough people against them, thereby lessening MGN’s chances at a takeover.
Gannet first became a target for Digital First in January of 2019. They realized that they could’ve made a small profit, around one dollar a share, if they had sold then. However they were told to wait it out, seeing as the longer they let Digital First make huge bids, the more profit they’ll see in the end. The stocks are by far the focus of every aspect of this takeover because they’ll indicate when it’s time to finally make the bid and begin to take charge of Gannett’s companies. Around the time of the announcement, on January 4, Gannett’s stock was hovering at about 8.5, and stayed below 9.0 until January 8, when it jumped to 9.2. Although this was an improvement from what they started with, it was announced that they needed to stay above 10 in order for Digital First to be unable to place a high enough bid, and they didn’t reach that goal until January 14, a full week later. Since then, Gannett’s stock has consistently stayed above 10, and even above 11 for a week in February. With that knowledge, Gannett seems to be safe from any plans Digital First has, at least for now.
The most recent information Gannett has released from their total revenue is from 2017. By December 31, 2017 Gannett Co. had achieved a revenue of just over 1 billion, from their digital assets alone. That basically means that by 2017, they had finally reached and surpassed 1 billion, but they didn’t earn that in one year. On the other hand, Digital First had earned 939 million in just one year, which raises them to the same level as the biggest shark in this industry, GateHouse.
This bid has turned heads in the political world as well. Chuck Schumer, a Senate Minority Leader, has openly expressed his opposition to MGN for cutting so many jobs, and how they refuse to release many of the important details of how they are going about taking over Gannett Co. Moreover, he’s worried that the pension funds for employees have been incorrectly managed for too long. Schumer has had enough with the lack of information released to the public, and has finally demanded that the president, Heath Freeman, needs to leak the plans for the pension funds, where and who that money is going to, and any information about possible layoffs for their staff in the future. Digital First responded to this claim and said that they are not the only ones who are being forced to lay people off, in fact everyone involved in the newspaper business is experiencing a decrease in revenue, and are being forced to make huge cuts (Wall Street Journal).
However, even though the stock is the most crucial factor in this takeover, the people involved have a lot at risk, whether it’s the investors, shareholders, Gannett employees, or people who work for the papers that Gannett owns. The shareholders need to know how the stock is holding up because they have real money at risk, and need to make a choice before they lose their money. The employees at Gannett will all most likely be terminated Digital First takes over, because whoever works for MGN will come in and take the jobs of all the Gannett employees.
With regard to the employees of the local papers, they seem to have mixed reactions about the situation. A reporter at the Argus Leader in South Dakota , which is owned by Gannett, commented on the situation between Gannett and Digital First explaining: “Everyone knew the name and what it means for a paper”, implying that Digital First has a bad reputation in the news world and workers know what could happen to them. Many other journalists agreed with this reporter, and are hoping that Gannet can hold its own against MGN Enterprises. On the flip side of that, there was another journalist who works at the El Paso Times, also owned by Gannett, who stated “It definitely has people’s attention and there is a bit of unease, but it doesn’t feel more intense than the worry of what Gannett has planned for us.” For people who agree with the journalist from the El Paso Times, it seems like there is no good option for the local papers.
There are many employees at risk in this takeover because Gannett owns so many papers, and one of the most well-known is “USA Today”. They have been constantly putting out stories about the status of Gannett and Digital First, because they want to keep their subscribers updated on what is going on. Moreover, they know what’s at stake for them, so they’ve been more focused on releasing content that helps them gain subscribers and influence. Regarding the profit and popularity of “USA today”, while there is a decline in how many paper copies they are able to sell, they’ve seen just as much of an incline in their digital revenue. In this day and age, that’s to be expected because most people prefer to read their news online rather than subscribe for a physical paper. According to Journalism.org, 38% of Americans would rather read their news through social media or on a news app, and the only factor more popular than an online subscription is to watch the news on T.V., which is what 57% of Americans prefer.
“USA Today” released an article about Gannett, informing their audience about how on February 20 of 2019, while they’re digital statistics are above what was expected, their overall revenue has faced a steep decline. With Gannett’s declining revenue, MGN has now stated that they are worried about the “health and direction of the business” of Gannett Co.According to Forbes, they are also claiming the Gannett should rethink rejecting MGN’s offer because soon they will lose all the value they have, and they’ll be worth a fraction of what Digital First is willing to pay now.
Employees of “USA Today” and other Gannett owned papers are holding their breaths as they watch the struggle between Gannett and MGN enterprises. In late January of 2019, the publisher of “USA Today” rejected the offer that MGN made, 12 dollars a share, and that started the new fight for total control of the publisher of almost one hundred papers that Gannett currently owns (Wall Street Journal). Since then, Digital First has not made another bid, as they may just be waiting for another opening, before they attack again.
While these local papers are watching to see who will come out on top, Gannett or Digital First, it seems like they are going to lose either way. Dan Kennedy from “WGBH News”, reported that working under Digital First has caused complete destruction at many local papers, including the Denver Post: “newsrooms have literally been closed, with journalists forced to fend for themselves.” He goes on to state that both Gannett and Digital First look for the quickest way to find profits, and have never focused on any long term plan to support the local papers they’re in charge of. Going back to the closed newsrooms, the only goal for MGN Enterprises and Gannett is to take as much money from these dying newspapers, then shut them down and move onto another one.
For now, Gannett’s stock is well above what Digital First will make a bid for, but anothercontroversial factor regarding this takeover is how well Digital First’s companies perform compared to Gannett’s. By specifically looking at “Detroit Free Press” and the “Mercury News”, they can show how well the stories are written and displayed, along with advertisements for each paper. The “Mercury News” is owned by MGN Enterprises and is based in San Fransisco, while the “Detroit Free Press” is owned by Gannett and based in Detroit.
Regarding the sports page, the “Mercury News” and the “Detroit Free Press” follow many of the sports team in their region, and constantly upload breaking stories about specific players, how they look for the upcoming season, and any possible trouble within the team. However, in order to conduct a fair comparison between a Gannett owned paper and one owned by Digital First, I’ll be looking at any stories that the “Detroit Free Press” has for its baseball team, the Tigers, and what “Mercury News” is writing about the Giants. It’s a well-known fact that Gannett and Digital First both own many successful papers, but they’re also known for brutally slashing the paper’s budget, and that cut will show in how each company is able to present their online stories.