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USA Today owner Gannett merges with GateHouse Media

By Duncan Mil

August 6, 2019 - Two of America’s largest newspaper publishers – New Media/GateHouse and Gannett – are to merge in a deal worth about $1.38 billion. The new company will own one-in-six of all U.S. daily newspapers.

Gannett publishes 216 newspapers including USA Today, while GateHouse publishes 451 journals.

Gannett shareholders will own 49.5% of the new company, and New Media shareholders will own 50.5%, the press release announcing the merger said.

USA Today reported that the deal was worth about $1.38 billion, and will result in an estimated annual savings of approximately $275 to $300 million, the companies said in a press release. 

Since 2013, GateHouse has spent more than $1 billion on acquisitions, snapping up dozens of papers at significantly reduced valuations. 

Once the company assumes ownership of a newspaper, it tends to pursue the same cost reduction strategy, says the School of Media and Journalism at the University of North Carolina. It consolidates functions such as copy editing and page design in a remote location.

Additionally, speciality and veteran reporters are laid off and replaced by general assignment reporters. As a result, GateHouse-owned newsrooms are often half the size within a matter of months.

Sources
PUBLISHED: 06/08/2019; STORY: Graphic News; PICTURES: Associated Press
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