Gatehouse Media May Follow Democrat-Gazette's Lead in Staff Cuts

Gatehouse Media May Follow Democrat-Gazette's Lead in Staff Cuts

The gloom in Arkansas’ daily newspapers only deepened last month as the Arkansas Democrat-Gazette cut the equivalent of 12 to 15 jobs, including the regular paychecks of big-name columnists Frank Fellone and Linda Haymes.

Meanwhile, the parent company of GateHouse Media, which owns dailies in Pine Bluff, Fort Smith, Arkadelphia, Stuttgart and Hope, also signaled an appetite for more cuts.

The Democrat-Gazette reductions, which came on the heels of eight layoffs in January, also included a reduction in hours for some employees. President and General Manager Lynn Hamilton said the reason was no mystery. To stay profitable, the paper had to cut costs. It’s an industrywide phenomenon, as Arkansas Times Editor Lindsey Millar noted in announcing his new nonprofit initiative, the Arkansas Nonprofit News Network.

“The internet has upended traditional publishing models,” Millar wrote in December. “In the last 20 years, as revenues have declined, the newspaper workforce has shrunk by about 20,000 positions,” 40 percent of the workforce.

Even papers like The New York Times, which got a substantial boost in readership after President Donald Trump’s election, are eliminating print jobs to make room for journalists with experience in videography and computer code-writing. Just last week, Warren Buffett suggested that of all the daily papers in America, only the Times and the Wall Street Journal have an “assured future.”

Fellone, who spent 38 years at the Democrat-Gazette, looked back fondly, saying he was always treated fairly and professionally. But he couldn’t hide a wistfulness, suggesting maybe “it was time to cut off the worn-out old codger, me.” Fellone’s column, Drivetime Mahatma, and Haymes’ Paper Trails are expected to continue on a contract basis, but some longtime readers sensed the end of an era.

Hamilton noted that beyond the layoffs, the Democrat-Gazette has not been filling some vacancies left by willing departures. Losses have hit the business reporting staff hard. Jessica Seaman was a casualty of January’s cuts, and fellow reporter Chris Bahn left for a job here at Arkansas Business Publishing Group. Claire Williams, a young talent out of the University of North Carolina, took a post with S&P Global Market Intelligence.

“I knew we wouldn’t be able to keep her,” said Democrat-Gazette Business Editor Rachel O’Neal, who scrambled by claiming veteran reporter Noel Oman for the business staff and reclaiming Stephen Steed out of retirement. She was also working to hire another reporter.

The sports staff was dealt a blow when college reporter Troy Schulte announced on Twitter that his last day with the paper would be Feb. 27. His posts said the job “has been great, as has the interaction with everyone here, but time for something outside of sports/newspapers/journalism.” Schulte has gone to work for Garver LLC., the engineering services firm based in North Little Rock.

Readers did notice well over a dozen full-page ads in a fattened-up Feb. 28 edition of the Democrat-Gazette, which Hamilton said resulted from the second year of a “Leap Day” event offering special rates to advertisers on the last day of February. No other ad discount promotions are now planned, Hamilton said.

Gatehouse Cuts Looming
Gatehouse employees in Fort Smith, Pine Bluff and beyond have heard unwelcome rumblings as the newspaper group’s parent company, the New Media Investment Group, based in New York, signaled in a regulatory filing that it will cut $27 million in expenses in 2017.

As David Harris wrote in the Boston Business Journal, those cuts are coming even as publicly traded New Media sets aside $200 million in cash and equivalents to snap up more small newspapers in distress.

Profits were down by half to $32 million in 2016, the company reported, and while cost reductions don’t automatically mean staff cuts, New Media said it foresees savings in “synergies from our latest acquisitions.”

On top of all that, New Media is run by an affiliate of Fortress Investment Group, which itself is being acquired by the SoftBank Group of Japan for $3.3 billion in cash. That merger was announced Feb. 14.

What all this means for the rank and file at Gatehouse remains unclear, but for newspaper employees who already feel their operations have been cut to the bone, the vibe isn’t good.