Here’s a bit of national business-page news you won’t see in your local upstate daily paper: Gannett, which owns the News Journal, has become the target of a hostile takeover bid by Alden Global Capital, a notorious hedge fund that operates a journalistic chop shop. It’s the outfit that bought the Denver Post and laid off one-third of the newsroom employees. And now it’s looking to expand:
Consolidation (and the cost-cutting that comes with it) remains the dominant strategy in the daily newspaper industry. If revenue continues to drop at or even near double-digit levels, the consensus thinking is that radically reducing expenses through consolidation is about as good a card as anyone has to play. Eliminate or reduce corporate staffs, centralize everything that can be centralized, and maybe in some cases continue to make small investments in newer revenue streams.
The analyst on this story believes the end result of the maneuvering he describes might be a merger between Gannett and the Tribune Co., which recently rejected a buyout bid from McClatchy. Whatever ultimately happens will almost certainly prompt even more cuts at the News Journal.