Britain’s second-largest newspaper chain is also in the crosshairs
By Julie Reynolds
There’s been a lot of media coverage about what might happen to America’s local news if vulture hedge fund Alden Global Capital, owner of the Digital First Media newspaper chain, takes over Gannett to become the largest newspaper chain in the country.
But even as US news workers join together to fight back, there’s been scant mention of the threat to Gannett’s other great newspaper entity, Newsquest, the second-largest regional chain in the UK.
Gannett acquired ownership of Newsquest in 1999. Together with its US papers, which include USA Today, Gannett’s combined circulation makes it the second-largest newspaper chain in the world after NewsCorps, according to Ken Doctor at Harvard’s Nieman Lab.
Newsquest publishes more than 200 “news brands,” including 19 dailies and the weekly Berrow’s Worcester Journal, “the oldest continuously published newspaper in the world.”
It also has a dark reputation for following Gannett’s stateside pattern of steep cuts to staff and resources.
“We certainly fear the ruthless and brutal reputation of DFM/Alden in the US newspaper industry, but we are finding it hard to cheer for Gannett,” says Chris Morley, a senior organizer for the National Union of Journalists. “It appears the UK management have been given a free rein to run its journalists here into the ground and on poverty pay. Staffing in each center is at minimum one-fifth of what it was before the big financial crash in 2008. The stream of redundancies has been remorseless and lack of investment appalling.”
One senior Newsquest reporter with more than 10 years’ experience describes a bleak picture for newspaper journalists in the UK. Like many other reporters, she says she’s been targeted and threatened on Twitter by “anonymous bullies,” and has had to make police reports with no help from her bosses. “Often it can feel as if ‘no one is sticking up for us’ and we are advised to simply block or ignore these trolls,” she told DFMworkers in an email.
She said new reporters there are increasingly “sent off to work from home or remotely with few safeguarding checks or formal policy,” after starting on salaries that are lower than those of unskilled workers.
“The prospect of a pay raise is something most of us gave up on long ago,” she says. “While we fully appreciate that the industry is struggling, in terms of print circulation and revenue, this does not excuse the unfair and often neglectful working conditions many of us now face on a daily basis.”
And many Newsquest reporters echoed similar sentiments in comments made to the NUJ as part of the union’s work.
“Colleagues work their backsides off to get papers out every day,” one news worker wrote. “It is their professionalism which has kept the papers coming out at a time when we are ridiculously overworked, substantially underpaid and desperately need more staff.”
Despite this dreary scenario, there is growing alarm among Newsquest journalists that the threat of an Alden takeover of Gannett could make work life even worse. As the journalists’ union told UK-based Press Gazette, Gannett is now “being pursued by the most predatory of vulture capitalist corporate raiders who are far distant from the needs and responsibilities of a modern media company.”
The Times (London) reported that Gannett’s steep cost cutting “pales in comparison to the capability of MNG Enterprises, a subsidiary of Alden Global Capital.” (Alden recently rebranded its Digital First papers as MediaNews Group, or MNG.)
There’s also speculation that an Alden-controlled Newsquest might unleash a slew of UK mergers, possibly starting with Britain’s Johnston Press, which is also hedge-fund controlled.
As British journalist Marcus Stead tweeted : “Gannett has been horrendous for Newsquest titles, and it now looks as though Gannett itself will be taken over by MNG Enterprises, who are known for ruthless cost-cutting. These are dark days for once-great titles like the South Wales Argus, Barry & District News, Penarth Times.”
Opposition mounts in the states
Meanwhile, US unions are continuing their opposition to an Alden takeover of Gannett. They’ve reached out to Larry Fink, CEO of Blackrock Inc., the largest institutional investor in Gannett with just under 15 percent of the company’s outstanding shares.
In a May 9 open letter to Fink, the NewsGuild and Teamsters urged Blackrock to reject Alden’s three-person board slate, to be voted on this Thursday (May 16) at Gannett’s annual shareholders’ meeting.
Noting that the three Alden candidates’ have “presided over a business failure” as board members of the Fred’s Pharmacy chain, the letter said Alden’s track record with Fred’s and the now-liquidating Payless ShoeSource chain shows that Alden’s slate is “not a strong recommendation for responsibility on the board of Gannett.”
Fred’s shares tanked to 53 cents on Monday, making Alden’s original $158 million investment now worth a mere $4.9 million. That $158 million, by the way, was directly siphoned from Digital First/MNG newspapers.
But bolstering share prices has never been Alden’s end game when it comes to handling distressed businesses. Instead, it employs a chop-shop strategy of dismantling the companies for parts, as is now happening with Fred’s.
One investor who has been investigating Alden’s business record told DFMworkers that the hedge fund has twice tried and failed to sell off all of Fred’s substantial real estate holdings.
And in what appears to be another example of self-dealing, both Fred’s and Payless have gutted staff and moved offices to a building in Dallas owned by Alden founder Randall Smith.
Added to this is federal scrutiny into still more Alden self-dealing, in an investigation that’s ongoing.
“Last month the Department of Labor announced that it was investigating Alden for channeling Digital First retirement assets into its own investment vehicles,” the unions’ letter to Blackrock noted.
The letter concludes with a call for “shareholders, managers and employees of our newspaper companies (to unite) in the creation of long-term, sustainable value.”
“This purpose,” the unions said, “is entirely lacking in the actions of MNG/Alden.”