PJS business strategy

Several recent reports on Journal Star corporate owner GateHouse Media (New Media Investment Group) explain the company’s aggressive newspaper acquisition strategy as a marketing plan to beef up revenues while cutting journalism.

Ken Doctor writes in Nieman Lab, Nieman Foundation at Harvard, that the corporate strategy is buying more papers, cutting newsroom staff and generating millions in management fees. The victims of this strategy are newsroom journalists and the communities they serve.

He spoke with Melissa Nelson, director of collective bargaining for the NewsGuild-Communication Workers of America, the union representing Journal Star newsroom employees.

Nelson said, “All of the papers the Guild represents that are owned by GateHouse have not had wages increased in 8 to 10 years.”

Nelson said in Illinois, the company “added to the financial misery. GateHouse made a contract proposal for retroactive medical and dental increases or a corresponding pay reduction, if the employee so chooses. The math adds up to about a $9,000 cut” for some employees.

The United Media Guild, the local unit of the NewsGuild, has reported that key executives in Fortress Investment Group, owner of GateHouse, have earned more than $60 million in the past few years in management fees and incentives during the same period staff cuts and salary freezes are implemented in newsrooms.

GateHouse CEO Kirk Davis earned $1.4 million in salary and benefits in 2016, yet his company fired journalists at the newly purchased Columbia Daily Tribune, a Columbia, Mo., family owned paper for 110 years, claiming the terminations were necessary for the financial health of the paper.

The Columbia Daily Tribune’s new publisher wrote a now widely-circulated column drawing an analogy between pruning dead wood from a 350-year-old bur oak tree and laying off veteran newsroom journalists, some allegedly by text messages.

Shannon Duffy, business representative with United Media Guild, said the union was successful in pushing through a shareholder proposal at GateHouse’s 11-minute annual meeting in New York on May 25. Currently, the terms of board members at Fortress are staggered, and the Guild proposal called for uniform terms.

Duffy said staggered terms make it more difficult for shareholders to successfully demand change. The Guild proposal passed with 30 million votes favoring and 7 million opposed. The proposal was nonbinding, but the vote means the proposal must be on the agenda at the corporation’s next annual meeting.

In addition to the Journal Star, United Media Guild represents newsroom journalists at the Springfield State Journal-Register, Rockford Register Star, Pekin Daily Times and Freeport Journal Standard. No journalists at those papers have received pay raises in at least eight years.

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