NEW YORK (AP) — A hedge fund-backed bid to buy Gannett Co., the publisher of USA Today and several other major dailies, is renewing fears of consolidation and job losses — as well as a decline in the quantity and quality of news coverage — in the already battered newspaper industry.
MNG Enterprises, better known as Digital First Media, offered $1.36 billion on Monday for Gannett, saying in a letter that it can run the company more profitably via tight cost controls and consolidation of operations such as printing and administration.
Gannett said its board will review the proposal.
Investors gave the deal a vote of confidence, immediately pushing Gannett stock up more than 20 percent to almost $12, the amount Digital First is offering.
The proposed deal is the latest indication newspapers aren’t done suffering from the punishing effects of the internet. Over the past decade, U.S. papers have struggled as giants like Google and Facebook siphoned off readers and advertising dollars.
Many publications have already made dramatic cuts in their newsroom staffs and scaled back coverage. Even then, acquirers still often swoop in and make even deeper cuts. In July, for example, Tribune Publishing, then known as Tronc, cut half of the New York Daily News’ newsroom staff, including the editor in chief.
The takeover bid is “very bad news for anybody who works for a Gannett paper or reads a Gannett paper,” said Dan Kennedy, a journalism professor at Northeastern University in Boston. “Gannett is a publicly traded company, of course, and it runs its properties pretty lean, but nevertheless they have a reputation for offering a certain degree of quality.”
Digital First is one of the biggest U.S. newspaper chains, with about 200 papers and other publications, including the Denver Post and the Boston Herald. Its biggest shareholder is Alden Global Capital, a New York hedge fund that invests in distressed companies.
Gannett publishes more than 100 papers around the country, including USA Today; the Detroit Free Press; the Record in New Jersey; the Tennessean in Nashville; the Milwaukee Journal Sentinel; the El Paso Times; the Des Moines Register; and the Arizona Republic.
Overall, estimated U.S. daily newspaper circulation, print and digital combined, fell 11 percent to 31 million in 2017, according to the Pew Research Center. As recently as 2000, weekday subscriptions totaled 55.8 million.
USA Today’s daily circulation was 3.1 million in 2017, down from 3.6 million in 2016, a count that includes print and digital readers.