Dean Starkman: March of the Undead Newspapers

Friday, November 15, 2013


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At this point, the New England newspaper scene is starting to resemble one long George Romero movie.

Yes, plenty of newspapers are up walking around, reporting the news, posting stories to the Web, plopping onto front porches. But the trouble is, only some of them are displaying signs of actual brain activity in their headquarters and a pulse in their newsrooms. The rest increasingly resemble a parade of zombies staggering mindlessly in circles.

And, as in a zombie movie, it’s hard to tell the living from the undead until you get up close and see the telltale vacancy in the eyes. In the case of newspapers, you don’t need to be a vampire hunter to figure it out. The giveaway: are they investing in journalism or are they cutting it?

One Example

Take Gatehouse Media Inc., which owns 78 dailies (and 235 weeklies, 91 free “shoppers,” 350 websites, and more) around the country, including some of Southeastern New England’s most venerable titles: The Quincy Patriot Ledger, the Norwich Bulletin, the Taunton Daily Gazette, the Fall River Herald News, and more.

Just this week, the U.S. bankruptcy court in Delaware approved a plan Gatehouse had submitted to restructure $1.2 billion in debt and reorganize as part of a pre-packaged bankruptcy. One might fairly ask how a company with a far-flung collection of assets in a shrinking industry accumulated so much debt to begin with, but let’s leave that aside. The question now is whether it can prosper going forward: stabilize revenue declines, win new readers, build morale in the newsroom, and reinvest for the future. Initial evidence is not heartening.

In September, for instance, an affiliate of Gatehouse’s parent company bought the Cape Cod Times, the New Bedford Standard Times, and Portsmouth Herald, in New Hampshire, and other assets from Rupert Murdoch’s News Corp., and gave them to Gatehouse to manage. At the time, Dan Kennedy, a leading journalism academic at Northeastern, presciently wondered out loud when whether layoffs at the papers would then follow.

Sure enough, as night follows day, cuts followed. Eight staffers were laid off at the South Coast Media Group, which is dominated by the Standard Times, and 17 were laid off at the Cape Cod Media Group, with 12 jobs eliminated in the Cape Cod Times newsroom. And so forth. The Cape Cod group’s president and publisher, Peter Meyer, put the best face on it in an email to employees, saying the cuts had been spread across department “to preserve award-winning journalism.” He also absolved the new buyers of blame:

Not Their Fault

"It is important to know that new ownership is not at fault for today’s actions. Any buyer would have taken similar action based on financial realities. This was a painful but necessary step to position the Cape Cod Media Group for future success.”

In fact, it is simply not true that any buyer would have done the same thing. Other local papers around the country are going in precisely the opposite direction upon acquiring newspapers: bulking up the newsroom, betting on quality, and reemphasizing print. As I’ve written, Freedom Communications, since it was acquired by greeting-card mogul (yes, there is such a thing) Aaron Kushner, has been on what the Columbia Journalism Review in May called “one of the biggest hiring sprees in newspaper history,” boosting the editorial staff by more than two-thirds in less than a year. He started by adding 140 journalists, plus another 100 in sales.

Is it working? The company says it is hitting its targets but the truth is, we don’t know. At last sighting, its bravura purchase of the Providence Journal’s sister paper in Riverside, California, was on the rocks .

But what we do know is that it has a coherent plan in place that focuses on the product, the journalism, the thing a newspaper actually sells.

Same goes for the Boston Globe, and one hopes, its sister paper in Worcester, where John Henry may not have a plan, at least one that he’s discussing, but he is at least clearly and obviously focused on the right things: The paper itself. You don’t have to take Henry’s words at face value to realize that his move, like Kushner’s, is not an exercise in mere financial engineering.


But financial engineering is at the center of Gatehouse’s recent moves. The company is, after all, controlled by Fortress Investment Group, a publicly traded Wall Street investment giant that owns everything from railways to insurance companies. Gatehouse was a financial play from the get-go. Fortress bought the newspaper company, originally Liberty Group Publishing, in 2005 and then took it public the next year. The move was poorly timed, given that the newspaper industry was about to go to hell in a handbasket. Tellingly, a 2008 Wall Street Journal story described the company’s strategy this way:

"When Fortress led the initial public offering in October 2006, it bet it could do with GateHouse what it had done with other portfolio companies: take a firm with reliable cash flows but limited growth prospects, add millions of dollars in debt and pay investors a rich dividend using the company's steady stream of cash flow."

Take a firm with reliable cash flows, add millions in debt, pay investors using a steady stream of cash flow that should have instead been invested in the papers themselves while its industry is undergoing massive transformation… and you are asking for trouble. How did all work out? Well, put it this way, bankruptcy is rarely a good sign.

As for the future, the company’s announced plan going forward is complicated, indeed. As noted, Gatehouse now manages papers recently bought by an affiliate of Fortress, called Newcastle Investment Corp. As the Journal reported, the plan is to combine the two companies’ assets into a new company, called New Media, and take it public in an initial public offering. It is safe to say that this particular IPO will not resemble the frenzy surrounding, say, Twitter’s.

What happens from there is anybody’s guess but an independent publicly traded newspaper company has a tough slough ahead of it, not matter how well-run.

But there is at least some consolation in all this: it is good, for instance, that Newcastle is getting out of the newspaper business. Newcastle is a real-estate investment trust that specializes in “senior housing.” For a newspaper company, the symbolism there alone is all just a morale-killer.

But then, one supposes, it could have been worse. It could have been hospice.


Related Slideshow: Rhode Island’s Changing Media Landscape

Radio, print, television and digital - the faces in Rhode Islands's media has changed drastically over the past months... Let's take a look at some of the biggest moves:

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Bob Kerr

The long time Providence Journal columnist Bob Kerr was sent packing by the new ownership group.

The unceremonious dismissal ended the tenure of the Projo's only true news columnist. 

Kerr was talented and often controversial. 

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Howard Sutton

The long-time publisher was Belo's man in Providence. Howard Sutton was the man that implemented the changes that Dallas wanted to try and make the company more efficient and more profitable.

The results were dismal. Maybe no newspaper in the country lost a higher precentage of ad revenue than the Projo over the past decade.

He was the face of the paper in the community. 

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Andrew Gobiel

Andrew Gobeil has been named campaign manager for Republican candidate for Attorney General Dawson Hodgson.
Gobeil began his media career covering politics as a teenager for a Cape Cod radio station. He has served as one of the youngest NPR affiliate news directors in the country, Washington editor and national correspondent for a television station group, and managing editor and host of a statewide public affairs program.  
Gobeil was the morning co-anchor at Providence’s ABC-TV affiliate and co-host of a morning news program on WPRO radio.  He is currently working on a non-fiction book about the journalism business. 
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Rick Daniels

Rick Daniels has joined GoLocal24 as Chief Operating Officer.

Daniels is the former President of the Boston Globe. He also served as CEO of Gatehouse Media for New England and led a consortium of investors who attempted to purchase the Boston Globe from the New York Times Company in 2013.

Daniels then went on to play a key role at Empirical Media Advisors based in New York, focused mainly on Tribune Publishing, where Emprical’s co-founder and CEO, Jack Griffin, recently took the role of CEO.

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Fred Campagna

Fred Campagna has joined FOX25 in Boston.

Before Campagna began working at FOX25, he served as the Chief On-Air Meteorologist at ABC6 for fourteen years.

After leaving ABC6 in July 2012, Campagna launched his own digital weather platform, Right Weather.


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Karen Meyers

WLNE-TV has fired anchor Karen Meyers. She had been with the station since 2011.

Meyers had anchored the 6 p.m. and 11 p.m. news with John DeLuca. Sources say station management opted not to renew her contract and decided to go in another direction.

Before Meyers joined ABC6, she was a reporter/anchor with New England Cable News and was a reporter in Washington, DC.

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Felice Freyer

According to RIPR reporter Ian Donnis, Providence Journal's Health Reporter is leaving.  Felice Freyer has been the sole reporter covering Rhode Island's largest businss sector.

Freyer leaves for the Boston Globe.

Her departure follows Phil Marcelo who recently left the Projo for AP in Boston.

Editor's note: An earlier version incorrectly had RIPR reporter Scott MacKay as breaking the story.

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Flo Jonic

Veteran radio reporter Flo Jonic recently was fired by RINPR after she filed complaints against the station  for gender-based pay discrimination.

Jonic is a 30 year veteran of New England news radio.

In her charge filed in February, Jonic wrote, "I believe that I have been discriminated against based on my sex by my employer," and referred to the difference in her pay and that of RIPR reporter Ian Donnis.

"Currently, [reporter] Ian Donnis earns at least $75,000 a year, while I make $51,000 per year. We perform the same duties, and I have 32 more years experience than he does," wrote Jonic in her complaint.

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Phil Marcelo

After a seven year stint reporting for the Providence Journal's state house bureau, Phil Marcelo left the paper to take a reporting gig with the Boston office of the Associated Press.

Hailing from Long Island, New York, Marcelo came to ProJo in 2006, and covered everything from regional news, to Providence City Hall and the Statehouse. Marcelo's departure was first reported by WRNI's Ian Donnis.

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Julie Tremmel

Formerly a nightly news reporter for WJAR, Tremmel was fired from the "Team You Trust" after two clips, one of her performing on-air handstands, and the other offering tips on what to do during a bear attack, went viral.

The video became an internet sensation, but long-time Channel 10 newsman Jim Taricani called Tremmel’s antics “a smudge on our station's reputation.”

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Jim Taricani

A long-time staple of Channel 10’s news team, Taricani announced plans to retire after over three decades with the station. 

Taricani has won 5 regional Emmy awards, an Edward R. Murrow award for investigative journalism and a Prestigious Yankee Quill Award from the New England Newspaper Association.

He was convicted to six months in prison in 2004 for refusing to reveal a source, and is the youngest person ever to be inducted into the Rhode Island Hall of Fame.

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John DePetro

WPRO talk show host has come under fire for comments he made on air regarding women. Leading union organizations have called for DePetro to be fired. 

Most recently, he has been on announced suspension.

DePetro apologized for his comments.

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Helen Glover

Former star of the reality show Survivor, turned talk radio show host is out. Helen Glover departs and is replaced by radio Veteran Ron St. Pierre, who only months earlier was let go by 630 WPRO. St. Pierre is a radio Hall-of-Famer and former top sports anchor on WPRI-12.
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Mike Stanton

Mike Stanton, the remaining reporter from the Providence Journal's once storied investigative team, is leaving Fountain Street for a teaching job at the University of Connecticut.
Stanton, who was part of the team that won the Providence Journal's last Pulitzer and is the author of the "Prince of Providence," the Buddy Cianci expose, departs leaving the Projo without an investigative reporter. 
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Dean Starkman

GoLocal named Pulitzer Prize-winning investigative reporter Dean Starkman as a contributor and editor-at-large.
"Dean Starkman has a tremendous track record in financial, media, and investigative reporting. His work at the Wall Street Journal as a reporter and as an editor and writer at Columbia Journalism Review (CJR), coupled with ground-breaking investigations of public corruption for The Providence Journal, is unsurpassed in the region," said Josh Fenton, Co-Founder and CEO at GoLocal24, the parent company to
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Karen Bordeleau

Karen Bordeleau takes over for Tom Heslin as Executive Editor for the Providence Journal.
Before joining the newspaper in 1996, she worked at the Kent County Times and the Woonsocket Call. 
She is a graduate of Northeastern University and a Rhode Island native.
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Bob Whitcomb

Bob Whitcomb has been the editor of the editorial page of the Providence Journal since 1992 and Vice President since 1997. 
His book, "Cape Wind" unveiled the business and political story behind Jim Gordon's effort to build a wind farm off of Cape Cod.
Prior to being a powerful voice at the Providence Journal, Whitcomb served as Financial Editor at International Herald Tribune.
He is slated to leave later this year according to RI NPR.
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Tom Heslin

Managing Editor of the Providence Journal, Tom Heslin, is retiring. 
Heslin who has been a journalistic leader of the Journal since the 1990's, led the paper's team the one their last Pulitzer Prize in the early 1990's and had to implement a series of staff cuts during the past decade.
Widely respected by journalists, Heslin has recently suffered from health issues.
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Tara Granahan

The former co-host to the morning drive show is now Buddy Cianci's sidekick and co-host on the 3:00 pm to 6:00 pm drive time show on WPRO AM.
Granahan has had a host of assignments at WPRO and is the only woman on air at WPROAM. 
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Connie Grosch

She was the star photographer for the Providence Journal for better than a decade.
Her State House/Political photos made her one of the most influential members of the Providence Journal staff. 
In late 2012, the Providence Journal let her go as part of the latest cost cutting ordered by the home office in Dallas.
In January, she was named press secretary to U.S. Congressman David Cicilline (D-1). She just announced she was leaving the Congressman's staff to return to photography.
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Gene Valicenti

The co-host of Channel 10's 6:00 pm news is now doing double as the host for WPRO's 6:00 am to 10:00 am morning show.
Previously, Valicenti lost his 11:00 pm slot on WJAR.
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Jennifer Jordan

One of the top Providence Journal reporters is leaving not only Fountain Street, but also journalism. 
She was one of the guild members with the least longevity - more than 10 years.
She leaves for Boston-based Opportunity Nation - a not-for-profit.
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Ron St. Pierre

The new guy at WHJJ - he takes over the morning show from the departed Helen Glover.
For decades, Ron St. Pierre has been a key player in the media industry in both local television and radio.
St. Pierre handled sports at WPRI TV, hosted morning drive at WPRO AM, and most recently, was Buddy Cianci's co-host in the afternoon.
(Photo: Alan Levine, Flickr)

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