Report: Job Slashing Hedge Fund Looking to Buy The Tennessean as Part of Gannett Purchase

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The Wall Street Journal and Market Watch are reporting that Digital First Media, a hedge fund backed media company renowned for purchasing newspapers and gutting the operations through firings and drastic cost cutting, is preparing a bid to purchase Gannett, which owns The Tennessean, along with about 100 other newspapers around the country.

Market Watch reported on Sunday:

A hedge-fund-backed media group known for buying up struggling local papers and cutting costs is planning to make an offer for USA Today publisher Gannett Co., according to people familiar with the matter.

MNG Enterprises Inc., one of the largest newspaper chains in the country, has quietly built a 7.5% position in Gannett’s stock and plans to publicly urge the McLean, Va., publisher to put itself up for sale, the people said.

MNG, better known as Digital First Media, will also offer to buy Gannett GCI, +0.52% for $12 a share, they said, which would represent a 23% premium over Friday’s closing price of $9.75. The shares, which fell steeply last year, have been rising lately.

Closely held Digital First is known for its contentious history with the newspaper industry in part because of its penchant for slashing costs. It has over the past few years made multiple approaches to Gannett about a deal but has been rebuffed, the people said. At least one approach was made in the past month or so. It isn’t clear whether Gannett will be receptive now. Digital First Media’s largest shareholder is Alden Global Capital LLC, a New York hedge fund that focuses on investing in distressed companies.

The Tennessean has already sold its downtown headquarters building, laying off a number of employees along the way.

As The Tennessee Star reported in December:

Gannett is examining the possibility of making cuts across its company — and that includes possible layoffs at The Tennessean and several other papers around Tennessee.

The Nashville Scene reported on the pending cuts.

Maribel Wadsworth, president of USA TODAY Network and publisher of USA TODAY, told employees during a company-wide conference call Tuesday that digital revenue is not replacing decreasing print revenues, and some budget tightening will be coming in the new year.

“Going forward, we will be a smaller company,” she said, noting that monetization has not been strong on mobile devices and that Gannett properties need to “deepen engagement” with mobile readers.

The Memphis Flyer said it is hard to determine whether The Commercial Appeal in Memphis can stand more reductions in force.

In November, a company-wide buyout offer targeted employees over 55 with more than 15-years experience. The deadline to take Gannett’s offer of 30-35-weeks pay, and a possible bonus of up to $5,520 is Dec. 10, the Flyer said.

Wadsworth told employees that the company cannot continue many of the products it produces, putting focus on non-daily print publications, according to the Scene. In Middle Tennessee, Gannett publishes weekly or twice-weekly content in Dickson, Robertson, Sumner and Williamson counties. Nationwide, she said, the company has reduced the amount of underperforming content.

In August 2017, Gannett announced the closure of the Nashville Design Studio, as The Star reported:

Gannett on Tuesday announced plans to shut down its Nashville Design Studio housed at The Tennessean, a closure that will affect up to 88 jobs.

The design work will now be done in Des Moines, Iowa; Louisville, Kentucky; and Phoenix, Arizona. The transition is set to be complete Oct. 1. There will be some opportunities for Nashville employees to work remotely, but Gannett did not say how many employees would have that chance.

The Tennessean has been planning to relocate its offices and recently selected a buyer for its property in downtown Nashville. Laura Hollingsworth, the publication’s president, told Nashville Business Journal it is too early to say how the closure of the design studio will affect moving plans, which are still in the early stages. Last year, Hollingsworth said The Tennesseean would need room for 291 employees wherever it finds a new home.

The Nashville Design Studio has handled design and page editing for various Gannett publications in Tennessee and around the country. Gannett owns a number of newspapers in Tennessee in addition to The Tennesseean. They include the Commercial Appeal in Memphis, the Knoxville News Sentinel, the Jackson Sun, the Daily News Journal in Murfreesboro and the Leaf Chronicle in Clarksville, as well as other smaller outlets.

Some are relatively recent acquisitions. However, as Gannett ownership has increased, so have cuts and consolidation moves that have resulted in job losses.

“At this rate, The Tennessee Star will soon have more assets in the state of Tennessee than Gannett,” quipped Christina Botteri, managing editor of The Star.

A little more than one year later, Botteri’s quip was clearly a foreshadowing of things to come.

 

 

 

 

 

 

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2 Thoughts to “Report: Job Slashing Hedge Fund Looking to Buy The Tennessean as Part of Gannett Purchase”

  1. […] As The Tennessee Star reported last week, Digital First Media is preparing a bid to purchase Gannett. […]

  2. Austin

    Maybe this will finally end the yellow plastic wrapped litter that is thrown on my driveway once a week.

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