Industries

Gannett Takes A Stand, Rejects Buyout

NEW YORK — Gannett is a media company that owns USA Today along with several other media outlets. The company’s mission statement makes it clear that they value communities. Recently, they took a stand for their own business community when approached by Digital First Media. Digital First Media is known for its policy of cutting jobs and market-driven tactics. They refer to themselves as a leader in local, multi-platform news.

Clash of The Titans

Both media companies are hugely successful. Last year, Gannett made seven-hundred and thirty-eight million dollars in their second quarter. They own eight-hundred non-daily publications in addition to owning USA Today. They also own twenty-one television stations in the United States.

Digital First Media is in a different business from Gannett. They are a hedge fund which invests in newspapers and media companies. They have been severely criticized for their practices. A UNC study describes it this way:

“At the most extreme, their strategies have led to the closure of hundreds of local papers and diminished the important civic role of newspapers in providing reliable news and information that helps residents of a community make important decisions about governance and quality of life issues.

Their second quarter profits in 2018 were almost one-hundred sixty million dollars. One example of the cost-cutting measures they use to maximize profit is the laying off of one-hundred and seven workers from a facility in Colorado Springs. After the editor at Daily Camera, a newspaper in Boulder, CO, published a piece critical of the company they fired him. The editor, David Krieger, had this to say about his firing:

“The grounds for firing me I would have understood in the traditional sense was the claim that I disparaged my employer. I certainly did that, although it was in defense of my immediate employer, the Camera, that I disparaged its private equity owners. But this is one of those cases where the very essence of what we are about comes into play. When do we serve our readers, and our obligation to tell them what’s going on? When do we stand up for telling them the truth? When do we quit covering for the unaccountable hedge fund we work for?”

A Game of Newsrooms

The clash between Gannet and Digital First Media has perhaps been inevitable. On January 15th, Digital First Media made the first move in what is sure to be a long struggle. They submitted a proposal to buy out Gannett for twelve dollars per share. Already owning seven point five percent of the company, they apparently desire more. Critics have accused them of reinvesting cash from local news stations into their under-performing assets.

Gannett’s board of directors soundly rejected Digital First Media’s attempt at a takeover. J. Jefferey Louis, chairman at Gannett, stated that:

“Our board of directors is confident that Gannett has significant value creation potential. Our vision and pursuit of our digital transformation, combined with our USA Today Network strategy, enables us to serve more directly and efficiently the persistent demand of our audiences and customers to engage with their communities.”

This clearly signaled Gannett’s intention to resist any attempts at being bought out.

 

 

 

 

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