This past week Gannett, which owns the USA Today network of newspapers including twenty of the top 100 by circulation as well as a number of small newspapers, and GateHouse Media have announced their merger. The combined company would have more than 260 daily papers in the U.S. along with more than 300 weeklies with a circulation of 8.7 million. After a merger, that circulation total would be 7 million readers more than the second largest newspaper group, McClatchy.
Gannett and GateHouse estimate $275 million to $300 million in cost annual savings following the deal, including more than $115 million from "newspaper operations" and more than $70 million from corporate functions and procurement, according to a company presentation. Touting these savings as beneficial to shareholders has meant in the past that thousands of journalists and other employees are laid off.
GateHouse Media is owned by publicly traded New Media Investment Group, which is managed by investment firm Fortress Investment Group. Fortress, in turn, is owned by Japanese tech giant SoftBank. New Media operates in more than 600 markets in 39 states, New Media is taking out a $1.8 billion loan from private equity firm Apollo Global Management (AGM), one of the world’s largest alternative investment managers.
This year, Apollo Global Management has been in talks with Nexstar Media Group to buy their organization for over $1 billion. AGM also acquired Cox Media Group 14 television stations and set up newly-formed Terrier Media to oontrol them. Terrier will also concurrently acquire Northwest Broadcasting, giving the company 25 television stations. Cox announced that its 60 radio stations, as well as national advertising businesses CoxReps and Gamut, would also be acquired by the new company.
On June 10, 2019, AGM announced that it would acquire Shutterfly for $2.7 billion, as well as its competitor Snapfish in a separate transaction valued at around $300 million. Apollo plans to merge both companies into a single entity, with Snapfish parent company District Photo as a minority stakeholder.
However, a potential opponent to the Gannett-GateHouse merger is MNG Enterprises, controlled by hedge fund Alden Global Capital. MNG, which recently failed in a hostile takeover attempt of Gannett, acquired a 9.4% stake (5.7 million shares) in publicly-traded New Media on Thursday and signaled plans to potentially oppose the merger or propose alternatives, according to a public filing Friday.
The color in these media mergers is not blue or red, but green and the bias is for shareholder profit. Shareholders of millions of shares and owners are global assest management groups, hedge funds, investment groups, and a Japanese tech giant.
