SEC Filing Suggests GateHouse Media May Cut Up to 40 at ProJo

Jul 30, 2014

A US Securities and Exchange Commission filing outlining GateHouse Media's purchase of the Providence Journal suggests GateHouse may cut up to 40 jobs once the deal for Rhode Island's statewide daily closes later this year.

The Providence Journal was sold to GateHouse Media earlier this month.
Credit Molly Malinowski / RIPR

The filing indicates GateHouse will not assume the CBAs -- collective bargaining agreements -- negotiated by Journal management, raising questions about the staying power of the Providence Newspaper Guild, which has represented newsroom and some other workers on Fountain Street for more than a half-century.

The filing also states: "Effective as of the Closing Day, the Buyer shall offer employment to all Business Employees other than the Excluded Employees in its sole discretion on terms and conditions determined by the Buyer .... the Buyer shall advise the Seller of up to forty (40) Business employees to which the Buyer will not be making offers of employment."

Put in plainer language, this means GateHouse's affiliated LMG Rhode Island Holdings will be able to determine which ProJo employees it wants to retain and which, after years of repeated buyouts and layoffs at the paper, it may let go.

GateHouse's $46 million purchase of the Journal from Dallas-based A.H. Belo is expected to be concluded by the end of September. The deal did not include the newspaper building at 75 Fountain Street or the Journal's pension plan.

The Providence Newspaper Guild has publicly taken a wait-and-see approach to the sale of the Journal. The Guild weathered a bitter 1973 strike at the newspaper and endured an almost four-year contract stalemate with Belo that ended in 2003. Management-union relations improved after that, not long before the worsening problems of the newspaper industry triggered cycles of cuts at the ProJo.

GateHouse CEO Kirk Davis used a full-page ad published in the Journal following the sale to say in part, "We enter your market committed to supporting a journalistically proud, sustainable, agile and innovative organization, and we are committed to upholding the high standards and unquestioned integrity that you have come to expect from The Providence Journal."

Meanwhile, Boston Business Journal managing editor Jon Chesto offered this view to Ted Nesi about GateHouse's approach to cost-cutting and newsroom management:

"I do think that they are always looking for synergies, how they can save money here or there. I wouldn’t say that they’re going to say, ‘Let’s cut left and right without thinking.’ They tend to make strategic cuts. Say if GateHouse had bought the Telegram & Gazette in Worcester – I don’t think they would have cut a quarter of the newsroom in one fell swoop like what just happened with Halifax.

"They do run tight ships, and that does tend to affect the quality. The papers are all a little smaller than they were. But you could almost say that, I would say, about most newspaper companies now. The Boston Globe under John Henry is a very unusual exception to the rule, and I’m sure under Jeff Bezos at The Washington Post that that’ll probably be stabilized to some extent, because you have owners who have the money and the patience to try out different things ...."