GateHouse spends big, but not on its journalists

Last year GateHouse Media faced bankruptcy. Today it operates prosperously under the New Media Investment Group umbrella as part of an ever-expanding empire.

Recently New Media announced its $8 million purchase of the Victorville Daily Press and the Barstow Desert Dispatch, two daily newspapers in California. That deal also included several affiliated weeklies.

The Boston Business Journal suggests that New Media will use revolving credit and its projected cash flow of $50 million to $70 million per year to make similar purchases.

“While I’m pleased we’ll have expansion opportunities, please know that I am focused, enthusiastically I might add, on strengthening what we own today,” GateHouse CEO Kirk Davis wrote in a Feb. 20 memo to staff. “I once worked for a newspaper entrepreneur who constantly reminded me that ‘bigger isn’t better; better is better.’”

That sounds great, but meanwhile Guild members at UMG units in Pekin, Springfield and Rockford continue working under perpetual wage freezes. (Our Peoria unit accepted a pay scale freeze on a recent contract extension, but it maintained status quo for its copy desk and step increases for new hires.)

The core print product in all four cities deteriorated dramatically on the GateHouse/New Media watch and the corresponding digital operations remain undermanned.

If Davis is true to his word – that he is committed to making existing properties stronger – how can he continue diminishing his newsrooms by running off seasoned journalists? It is really good business to keep giving consumers less while charging more?

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