The US company eyeing a takeover of Newsquest’s parent company has failed to mention the UK regional publisher in its plans.
MNG Enterprises, which also trades as Media News Group and Digital First Media, said it would look to “consolidate” production hubs, reduce overheads and put a “strategic focus on economic realities” at Gannett.
- March 25, 2019
- February 4, 2019
- January 14, 2019
MNG, which publishes some 200 US regional newspapers, is continuing to pursue Gannett despite its bid to pay $12 a share having been unanimously rejected by the USA Today publisher’s board.
New York Senator Charles Schumer wrote to MNG in February raising concerns over its “history of acquiring newspapers, cutting staff, and then selling off real estate and other assets to generate a profit”.
Schumer said MNG’s response, which he published in full, was “more spin than substance” and failed to answer questions about investment or make commitments to safeguard newsroom jobs.
In his reply, MNG chairman of the board Joseph Fuchs wrote: “Consistent with our experience running local newspapers efficiently and effectively so they can remain viable, our proposed acquisition of Gannett would include a strategic focus on economic realities.
“With respect to real estate, strategic steps might include, where feasible, consolidating print sites, editorial production hubs, advertising production hubs, and financial services…
“At this stage, MNG has not identified where such consolidation might be necessary or feasible or how any proceeds from asset sales would be utilised, but the goal would be to rightsize overhead costs so that each and every newspaper can maintain healthy reporting, covering the communities they currently serve.”
Fuchs also argued that MNG’s business model is “not based on closing publications” but on getting them “to a place where they can operate profitably and sustainably”.
MNG holds a 7.5 per cent stake in Gannett and is now attempting a hostile takeover of the company, having nominated six candidates affiliated to either itself or its hedge fund owner Alden Global Capital to take a seat on Gannett’s board at its annual meeting on 16 May.
Schumer said he had now written again to MNG to say its response left him “concerned that the newspapers that may be impacted by this potential acquisition… will face devastating cuts by an indifferent media conglomerate that is backed by an even more indifferent hedge fund seeking to generate a profit”.
Gannett bought Newsquest, which publishes some 200 regional titles in the UK including daily the Carlisle News and Star, in 1999.
Newsquest journalists in the UK last week expressed fears of becoming “collateral damage” in the battle between Gannett and MNG, which is also known Media News Group.
Newsquest is the UK’s second largest regional publisher and has been expanding its portfolio in the past year. It owns the Herald titles in Scotland and the Carlisle News and Star in Cumbria.
In a statement published by the National Union of Journalists on Thursday, Newsquest group mother of the chapel Federica Bedendo said: “Our members are already under an incredible amount of pressure – we work in understaffed newsrooms and paid poverty wages. And we, the underpaid and undervalued staff, seem to be the only ones who care about the quality of the products we produce and the communities we represent.
“To hear this toing and froing between Gannett and MNG without a single mention of Newsquest and what might happen to it after the AGM leaves us with very little confidence for our future.
“Even Gannett thinks MNG is bad news for local papers. The last thing we need is uncertainty for jobs and the future of local journalism.”
NUJ northern and Midlands senior organiser Chris Morley added that the companies’ future plans for Newsquest was the “massive empty space in the war of words”.
“This is especially true of the MNG side that has expended a good deal of time trashing Gannett directors’ stewardship of the company but its narrative ominously ignores the UK business that provides ten per cent of total group income and supports more than 800 journalists in this country,” he said.
Gannett has urged its shareholders to vote against MNG’s board nominees, saying: “Gannett believes that if MNG’s nominees were to be elected to the Gannett board, it would effectively transfer control of the board to MNG and Alden – without any control premium – at which point MNG and Alden would be able to advance a self-serving agenda at yet another American news media company.”
The News Guild Communications Workers of America also wrote to shareholders asking them to vote against MNG’s nominees, saying: “We believe that the fate of other news media companies acquired by Alden and its subsidiaries makes clear that these directors have little to offer in terms of innovation or problem solving, and would rely on draconian cuts in staff and product quality in an effort to generate short term profits.”
Picture: Reuters/Larry Downing