The consolidation of the media shows no sign of slowing down, and the latest piece of the puzzle involves the two biggest players in the newspaper industry: Gannett and Gatehouse Media.
The deal, funded by private equity, in the long run will likely be good news for the bankers and shareholders involved, but bad news for journalism itself, with the combined company (which will keep the name Gannett) needing to deliver hundreds of millions in savings annually to make the deal successful.
On the ground, that will translate to fewer journalists on the job and more shared content between publications at the new company, which will now boast of operating more than 260 daily newspapers and 300 weekly newspapers.
Officially, Gatehouse Media (the second-largest newspaper company in the U.S.) will acquire Gannett, the No. 1 company, in a $1.38 billion cash-and-stock deal.
To make the deal work for shareholders, the first few years after the merger will likely be spent increasing “synergies” and “efficiencies” between the two companies. This would include everything from sharing corporate services like finance and HR, to limiting print production of newspapers, to regionalizing newsroom staffs and duties. Naturally, jobs would be cut in all those areas along the way.
For the world of public relations, the increased regionalization of duties will mean fewer traditional targets when conducting media outreach, meaning PR firms will need to be more out-of-the-box when imagining new ways to promote their clients, and will have to focus their efforts even more so on digital and online promotion, developing new lanes of exposure.
For the news-reading public, they are likely to see less diversity in the news they read, with more news shared between outlets, and a further drain on local reporting staffs.
Looking ahead, this is not likely to be the end of media consolidation. The remaining companies in the industry (McClatchy, Media News Group, Tribune, etc.) will be looking very closely at how this deal works, and are likely to form partnerships of their own to keep up with the new behemoth Gannett has become.
Buckle up, because the ride is just getting started.