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What Does It Mean When 2 Giant Newspaper Companies Merge?


It is no secret the newspaper industry is struggling. Small local papers close with regularity, and larger companies merge with other large media companies. The most recent media marriage - a merger between newspaper giant Gannett and another large publishing company, GateHouse. Now, mergers like these are often followed by drastic cost-cutting measures. NPR's David Folkenflik reports on how that could affect local news coverage.

DAVID FOLKENFLIK, BYLINE: You can look at this from either end of the telescope. Let's start with Angie Muhs. That's M-U-H-S Muhs, rhymes with news. Anyway, Angie Muhs knew she wanted to be a reporter from the time she was 12 years old.

ANGIE MUHS: I read this book called "Deadline" by Kathleen Begley - still remember the name of it. And it was about being a reporter, and it just sounded like the most wonderful thing in the world.

FOLKENFLIK: And Muhs punched all the tickets - a few freelance pieces as a high school senior for her hometown paper in Olney, Ill., journalism school at Northwestern, gigs at the Miami Herald, the Columbia State in South Carolina and the Portland Press Herald in Maine led to a job as the executive editor of the State Journal-Register in Springfield, Ill., for nearly five years. It's a state capital with a huge public university nearby and serves as a big health care hub.

MUHS: It's a population that's pretty educated and pretty savvy about local news. You know, people felt really possessive about their newspaper.

FOLKENFLIK: Yet earlier this year, Muhs told bosses she was quitting her job and leaving her dream profession of journalism. So what happened in those five years? She had taken over an already-depleted newsroom and found a continual demand for more cuts.

MUHS: When I came here, the newsroom had, if I remember correctly, 38 people or so. And by the time I left, that number was down to 16.

FOLKENFLIK: Muhs couldn't even assign someone to cover neighboring suburbs and, like everyone else, took on added responsibilities - too much, she thought. As more cuts loomed, she gave notice.

MUHS: Knowing that I was probably going to walk away, it seemed like if I did it at that point, you know, my salary savings might prevent other people from getting laid off.

FOLKENFLIK: Her choice may be unusual, but the conditions she describes is not uncommon at papers around the country. It's just that her former corporate bosses are known as particularly severe. The view at the other end of the telescope is held by her former corporate CEO, Mike Reed. He's now the chairman and CEO of the new Gannett Corporation.

MIKE REED: When you backtrack over a number of years, we have been labeled as an aggressive cost-cutter. And we have reduced costs pretty rapidly over the years. The thing I would point out that - it's easy to be negative. It's easy to be a hater. I don't know if all the criticism has actually been fair.

FOLKENFLIK: Reed has been in the business for decades.

REED: So if we don't provide unique, relevant, comprehensive local news to our consumers, we won't be relevant to them. And then we won't have a business.

FOLKENFLIK: Revenues are falling throughout the industry at a sharp clip, and Reed says the new Gannett must reform itself for a digital age. Yet many critics inside and outside the company tell NPR they question how much its owners are willing to invest into that transformation. They note Reed's biggest commitment is to cut annual costs by even more - another $300 million a year to help pay for the huge loan the company took out to acquire Gannett along with earlier debts. Journalists will tell you there's no way to do that without hitting the newsroom once more. Reed tells NPR he'll focus on eliminating duplication.

REED: I think this combination affords us an opportunity to reduce costs in areas that allow us to save jobs in the newsroom.

FOLKENFLIK: The industry analyst Ken Doctor reports that Gannett executives believe the figure may be even higher - in excess of $400 million a year - and that they anticipate layoffs of 12% of the remaining staff. Reed dismisses those figures but won't rule out added layoffs in the future; the prospect of job losses always hovering over local newsrooms.

David Folkenflik, NPR News, New York.


David Folkenflik
David Folkenflik was described by Geraldo Rivera of Fox News as "a really weak-kneed, backstabbing, sweaty-palmed reporter." Others have been kinder. The Columbia Journalism Review, for example, once gave him a "laurel" for reporting that immediately led the U.S. military to institute safety measures for journalists in Baghdad.