As many of you probably know, the Milwaukee Journal Sentinel was involved in another ‘merger’. This time it’s most current owner group, Gannett (which also owned USA Today) merged with New Media Investment Group. And of course as is the nature of these mergers the new company will be sleeker and more efficient my reducing cost redundancies (i.e. employees), $300 – 400 million worth.
And Bruce Murphy over at UrbanMilwaukee reports on some of the earliest local casualties:
The departures at the Journal Sentinel include some big names, which were first reported at the Business Journal. They include columnist Jim Stingl, food editor and writer Nancy Stohs, business reporters Rick Romell and Paul Gores, general assignment reporter Jesse Garza, environmental reporter Lee Bergquist and night news editor Bob Friday.full disclosure: Bob Friday is a personal friend.
So already, MJS is a leaner machine but a lean that will be readily apparent on the frontlines and the print edition of the paper almost immediately. Since the main news section is already down to 14 pages (and four of them are full page ads for hearing aids), I don’t know who’s left to write content for them.
There will be more cuts coming…but this isn’t the only reason I fear for the paper’s continued good health.
There’s this little cherry hidden in one of the articles about the merger:
Gannett’s current CEO, Bascobert, will retain that title as head of the new company’s operating subsidiary, also to be called Gannett. He has said he’s confident of hitting the savings target.
It’s crucial because, at an interest rate of 11.5%, the Apollo loan could become onerous if not paid off quickly, said Tim Hynes, head of North American research for debt analysis service Debtwire.emphasis mine
11.5% interest…in an era of some of the lowest interest rates in my lifetime…when an average home buyer can get a 30 year mortgage at under 4%…these high flyer investors can’t do better?
I don’t hold out much hope for a company fighting the downward trend in advertising revenues and even faster declines in paid subscriptions that they will reduce costs to pay 11.5% usury without gutting their actual product to the range of uselessness.
My only thought is how much time do they have left?