Gannett Grab
Sorry, folks, no monologue jokes this week. Instead, FOTW is checking back in with Senate Minority Leader Chuck Schumer (D-NY), who continues to engage with Alden Global Media, the media-gobbling hedge fund angling to acquire, or otherwise determine, the fate of The Commercial Appeal‘s corporate owner, Gannett Co.
As the Flyer reported in the March cover story “Going to Pieces,” Schumer sent a sternly worded letter to Alden, expressing concern about what might happen if the company, infamous for slashing its way to double-digit profits with no regard for communities, acquired another newspaper chain.
He’d already weighed in on the Senate floor, noting that Gannett was a troubled example of newspaper consolidation, plagued by layoffs and delocalization. Hedge fund-backed owners like MNG/Digital First depend on deep layoffs and cost-cutting, including the outsourcing of back office, sales, and certain editorial duties to central hubs, far removed from the places where news is gathered and where the paper is circulated and primarily read. They sell a newspaper’s real estate holdings and sell or shutter poorly performing properties with nothing left to squeeze.
In response to Schumer, the Alden-owned MNG enterprises said it would “right-size overhead costs,” more or less as predicted. MNG Chairman R. Joseph Fuchs wrote, “With respect to real estate, strategic steps might include, where feasible, consolidating print sites, editorial production hubs, advertising production hubs, and financial services.”
The response was deemed unsatisfactory and triggered a second letter from Schumer announcing intentions to involve the Department of Justice and the Pension Benefit Guaranty Corp., in a process of exploring potential regulatory issues.
