Journal Sentinel Will Lose All Local Control
Gannett purchase will make it part of national chain, integrated into USA Today-centered operation.
Journal Media Group
Just months after it was created, and before it even gave birth to its first annual report, Journal Media Group [NYSE:JMG] announced it was being acquired for $280 million by Gannett, a nationwide publishing giant.
Judging from the statements by Journal management, you’d think the Milwaukee Journal Sentinel and our city would continue to have a strong role in the new corporate heirarchy. Don’t count on it.
That has not been the history of Gannett, the firm that brought us USA Today and is known for relentless cost-saving measures and homogenized news outlets The extent and severity of its layoffs (1,400 in 2009 alone, with more since) are legendary in an industry where layoffs are commonplace.
Still the management at 333 W. State Street sounds upbeat. Tim Stautberg, president and chief executive officer of Journal Media Group said, “Both Journal Media Group and Gannett are guided by a vision of strengthening lives and communities, and we’ll be better stewards in our local markets by sharing ideas, content and best practices among our new and larger family.” Whatever that means.
Although the paper’s story mentioned that Milwaukee will lose a corporate headquarters as a result of the purchase, Journal Sentinel publisher Betsy Brenner, in her statement, was emphatic that Milwaukee will not be subsumed into Gannett, but would be an independent outpost:
“We’re still here. We make our decisions and run our newsrooms out of Milwaukee, not anywhere else. We serve our advertisers and subscribers out of Milwaukee, not anywhere else. And we support causes that are important to our community from this building. So all of that, it’s not going to change.”
Stautberg added that “at the end of the day here in Milwaukee, it’s going to be Betsy Brenner, (Editor) George Stanley — the local leadership — that’s going to be making the decisions about how to operate and run this newspaper.”
This is highly unlikely, and it is doubtful that Stautberg would make the same confident statement to the company’s 14 other papers, all in much smaller markets [see list at end of story].
Chances are the Journal Sentinel and the others will soon resemble Gannett’s existing Wisconsin papers and websites in Sheboygan, Fond du Lac, Manitowoc, Appleton, Green Bay, Wisconsin Rapids, Stevens Point, Marshfield, Oshkosh and Wausau. They all look alike. They all look like USA Today.
Jim Romenesko, a Milwaukee native who is a nationally respected observer of journalism tells me:
“While some newspaper companies say they’re committed to print, Gannett execs have said they realize the end of print is probably near, and all efforts should be on digital. I expect the Journal Sentinel website will soon switch to the Gannett/USA Today template and constantly remind readers that the Milwaukee product is part of a national chain – no longer homegrown.”
In fact, Gannett, in an SEC filing today says as much: “JMG’s local brands will leverage Gannett’s content and national USA TODAY brand and have their content integrated onto Gannett’s Digital Platform.”
I think this means we can say goodbye to the Green Sheet again.
Big Bucks for Corporate Officers
Stautenberg has 94,301 restricted shares of Journal Media Group stock, and 55,779 shares he owns directly. In mergers, restricted stock often becomes immediately vested, so he likely has about 150,000 shares worth $12 each, or about $1.8 million, at zero out-of-pocket cost. Brenner has 38,323 restricted shares, and 45,245 fully vested shares, together worth about $1 million.
Marriage of Sports Departments Could Provide Synergy, Conflict, Loss of Jobs
Gannett also publishes Packers News, relying heavily on the reportage by the sports desk of the Green Bay Press Gazette. No professional sports team is located in a smaller city, so the Press Gazette’s sports department is likely larger than those in other similar sized cities. The other Gannett papers rely on the Gazette reporters and columnists for their Packers coverage it appears, judging from a random sampling of the bylines of the writers and columnists.
The Journal Sentinel produces Packers Plus, and has its own sports department covering the Packers. It will be interesting to see how the new corporate overlord will take to having a surfeit of football reporters on its staff, once the merger takes place. It is highly doubtful the paper will retain its stand-alone Packers staff. Something’s got to give.
Valuable Real Estate Included
So what does $280 million buy Gannett? The list of newspapers below is just a portion of Gannett’s new stake.
The Journal Media Group owns some significant real estate assets in Wisconsin and in the other states in which it does business. The value of the company’s real estate may represent a considerable portion of the purchase price, since the intangible and goodwill assets of news organizations are virtually worthless today.
A quick calculation shows the assessed value of Journal real estate in the Milwaukee area totals some $30 million. That’s more than ten per cent of the amount Gannett paid for the entire company.
The Journal Sentinel headquarters downtown is assessed at about $9 million. An adjacent property, home to Major Goolsby’s tavern is assessed at over $1 million. The Journal Sentinel printing plant in West Milwaukee, located on 41 acres, is valued at $20 million.
The downtown headquarters, which is nearly vacant and functionally obsolete, is considered to be a prime development site in Milwaukee, and had been mentioned as a possible location for the arena.
It is possible that the publishing company’s buildings in its other markets, including high-growth states like Texas, California and Florida, may also face some of the challenges of the Journal building and could be sold for development, possibly at a hefty premium to assessed valuation.
In addition to The Milwaukee Journal Sentinel, Journal Media Group owns:
- (Redding CA) Record-Searchlight
- Ventura County (CA) Star
- Naples (FL) Daily News
- Treasure Coast (FL) Newspapers
- The Evansville Courier & Press in Indiana
- The (Henderson KY) Gleane
- (Anderson SC) Independent Mail
- Knoxville (TN) News Sentinel
- The (Memphis TN) Commercial Appeal
- Abilene (TX) Reporter-News
- Corpus Christi (TX) Caller-Times
- San Angelo (TX) Standard-Times
- Wichita Falls (TX) Times Record News
- Kitsap (WA) Sun.
Political Contributions Tracker
Displaying political contributions between people mentioned in this story. Learn more.
- November 3, 2015 - Tom Barrett received $400 from Julilly Kohler
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What an odd statement: “…so he likely has about 150,000 shares worth $12 each, or about $1.8 million, at zero out-of-pocket cost.” It’s not an option, it’s compensation. You don’t advertise a job as being “$50,000 annual salary with zero out-of-pocket cost.”
Anyway, to the average media consumer… as long as the news and reporters are local, quality, and as unbiased as possible, formats and management compensation don’t really register on our list of things to worry about.
How will the MJS’s sponsorships of numerous local events be affected?
It’s almost like AG has no concept that some workplaces offer stock options that do indeed cost money instead of just handing over the shares outright.
I suppose it wouldn’t be good journalism if it didn’t ruffle feathers… even if AG is exceptionally thin skinned.
Tim… what does me pointing out that it wasn’t a stock option have to do with having thick or thin skin?
Regardless… you did see that I pointed out that he was given stock directly as compensation, not stock options… right? Apparently not.
The article pointed out that he was given the stock as compensation, you just whined about the article mentioning it.
No, I pointed out that it was odd that the article said his compensation cost him zero dollars. I’m guessing you don’t pay your employer to get pay and benefits either. Just a hunch.
Rather redundant, wouldn’t you say? It wasn’t a huge deal, just pointing out an odd thing to say. Although, now that it has taken up 5 comments makes it a big deal I guess…
Expect big changes. The paper will become smaller, both in sheetsize and thickness. Less articles, less local content. Any national story will be pulled directly from USA today. Overall quality will continue to slide in articles and likely in the online experience. JSOnline is one of the better online news sites but will be absorbed by Garnett’s hideous website platform.
Such is the state of newspapers these days.
Cancel your subscription as I did more than 3-years ago. It is a sad demise of what was once quality reporting, local reporters and themes, and a strong commitment to the community and people. MJS has been in a downward slide for decades and long ago lost their soul in being a true sentinel in support of freedom, rights, honesty, trustworthiness, and justice and sticking up for common working people and those without a voice.
Seek, support, and promote alternate source like Urban Milwaukee and others.
Great news for Milwaukee. Finally some national support to bolster the otherwise failing urinal sentinel.
Good luck to those left at the Milwaukee Journal Sentinel! I had to move to Indianapolis to stay employed, and then I had to call my pals at the M J/S and apologize for all the years I ragged on the paper. It might have been marginal compared to what it was in the past, and marginal compared to papers in a few other cities I’ve lived in, but compared to the Gannett Indianapolis Star, the M J/S was practically the NYT! Be prepared to see stories covered with the same depth that radio covers information: 30 seconds the first ‘breaking’ day, and then no follow-up. Be prepared to have the paper inundated with tons of short copy on entertainment items keyed towards 20-somethings. In fact, be prepared to have your senior staff fired and replaced with 20-something ‘beer’ reporters. Meanwhile everyone that had relationships with city hall and the police that they might have garnered ‘secret’ info to develop stories from, will be gone.
People who’ve worked at Gannett tell me it works this way: They will kill all ancillary positions: photo editing, copy desk, etc. Their plan will be to move that to regional centers (like here in Indy), to get done (poorly), by people that don’t know anything about the city you live in. People over 50 will be offered ‘buyouts’, but when you don’t take the buyout, everyone will be forced to reapply for their jobs. Anyone over 50 won’t get hired on the reapplication, so if you don’t take the buyout, you’re screwed. This is how they skit the rampant ‘ageism’ charge that comes every time they do this; altho they have yet to be challenged by a smart lawyer. This methodology is virtually institutionalized as away to fire seniors, so it seems funny no one would ever challenge it? maybe the older reporters have been told they’re screwed so many times, they’ve started to believe they have no recourse.
Gannetts focus on a generation that does NOT want to read the paper, seems ridiculous, and I’ll bet they lose subscribers in every market. The content changes to become “milleneal-centric”, but milleneals don’t read the paper; so if kills the subsrcibers that want to read the paper, without replacing them. In addition, and ask any sub-30 (lord knows I have here in Indy), the on-line edition that they look at as saving their business, sucks, and sucks big-time. My sub-30’s won’t go to it at all. Too many ad pop-ups, boxes that keep you from reading anything until you click through, etc. etc. If you were going to design a web-site to show how people can be driven away reading it, Gannett would be king!
The trend in buying newspapers is the same that has happened in buying up other manufacturing and production companies. Get bigger, eliminate skilled employees, off shore labor and product making, and sell back here. This works with cars, trucks, chicken nuggets, toys, newspapers, drugs, etc. The business casinos and Wal-Marts of the world will continue this practice till all quality and life is sucked dry. It is a virtual dead end.
It seems few companies and investors want to actually build something of quality and staying power. There are exceptions like craft beer for now but they may get bought up at some point by the giants to eliminate their competition. Wisconsin is last in the nation in business startups and that is not likely to change for now.
This ongoing practice and cycle will not change until their is nothing left to suck from this husk (us), and our economy collapses upon itself and we have to start all over. There is an alternative path with tax policies that reward local production and invention, consumption of local materials, services, and labor, and people have quality jobs that support future investment, education, continuous improvement, and sustainable practices that include efficiency and renewable energy as a major component. Too big to fail is too big and should not exist – they no longer serve the interests of human beings, only their existence and profit.