The Journal Star will not enhance coverage of the Peoria City Council, Dunlap schools, East Peoria police or the Illinois Legislature in Springfield following the merger of Gannett and PJS owner GateHouse Media.
In fact, it has been widely reported the merger means thousands more layoffs at the 260 dailies controlled by the new company. The 300 weekly papers will likely see cuts as well.
The merger, financed by a $1.8 billion loan from private equity firm Apollo Global Management at 11.5%, will create more “ghost newspapers” that operate digital marketing sales efforts and host special events planned for profit.
The new company will be called Gannett. Poynter Institute for Media Studies reports the new operating CEO does not have a background in news. His background is operating a specialized wedding site.
According to Poynter, Gannett brings a well-developed national sales team to the new company. GateHouse brings a well-developed event business like the high school sports awards dinner the Journal Star hosts and charges family members to attend.
The combined companies were expected to announce newsroom cuts in early 2020 but that has been pushed up to early December, according to Poynter.
Despite these facts, executives at the merged company contend this deal will “enhance quality journalism.”
Billionaire investor Leon Cooperman told the Boston Business Journal “nobody believes any of the numbers coming out” from the company regarding the merger and projected earnings.
Cooperman was especially critical of Fortress Investments Group that has managed New Media/GateHouse since 2013. Fortress is currently owned by Tokyo based SoftBank.
“I was in the hedge fund business for 26 years. I only got paid when I made money for investors. The kind of money that Fortress is walking away here . . . they’re going to walk away with hundreds of millions of dollars. It’s just morally wrong and they shouldn’t even take the money, given what they’ve done here.”